OFFERING MEMORANDUM

CONFIDENTIAL

US$600,000,000

UNITED MICROELECTRONICS CORPORATION

(incorporated as a company limited by shares in Taiwan, the Republic of China)

CURRENCY LINKED ZERO COUPON CONVERTIBLE BONDS DUE 2020

United Microelectronics Corporation (United Microelectronics or we) is offering US$600,000,000 aggregate principal amount of Currency
Linked Zero Coupon Convertible Bonds due May 18, 2020 (the Bonds, which shall include, unless the context requires otherwise, any further
Bonds issued in accordance with the Indenture). On or after June 28, 2015, which is the 41st calendar day after the Bonds are issued, and up to and
including May 8, 2020, which is the 10th calendar day prior to May 18, 2020 (the Maturity Date), and except during certain closed periods (as
described herein), each Bond, at the option of the holder, will be convertible into the common shares (Shares) of United Microelectronics, which
are listed on the Taiwan Stock Exchange Corporation (the TWSE). The initial conversion price of the Bonds will be NT$17.50 per Share (the
Conversion Price), subject to adjustments in the circumstances described under Terms and Conditions of the BondsConversion (the
Conversion Price after such adjustments, the Last Adjusted Conversion Price).
Unless previously redeemed, repurchased and canceled, or converted, we will redeem the Bonds at the Settlement Equivalent (as defined below)
of 98.76% of the principal amount on the Maturity Date. We may redeem the Bonds, in whole or in part, at the Settlement Equivalent of the Early
Redemption Amount (as defined below) if, at any time on or after May 18, 2018, the closing price of the Shares on the TWSE on each trading day (as
defined below) for 20 out of 30 consecutive days on which the TWSE is open for business (each such day, an Trading Day), the last of which
occurs not more than five Trading Days prior to the date of the redemption notice, shall have been at least 125% of the Conversion Price or the Last
Adjusted Conversion Price, as applicable, on each such day. Notwithstanding the foregoing, we may redeem the Bonds then outstanding in whole
(but not in part) at the Settlement Equivalent of the Early Redemption Amount if more than 90% of the principal amount of the Bonds originally
issued have been redeemed, repurchased and canceled, or converted. At any time, we may also redeem the Bonds in whole (but not in part) at the
Settlement Equivalent of the Early Redemption Amount in the event of certain changes relating to taxation in the Republic of China. Each holder of
the Bonds (a Bondholder) has the right, at such Bondholders option, to require us to repurchase such Bondholders Bonds in whole or in part on
May 18, 2018 at the Settlement Equivalent of 99.25% of their principal amount. Each Bondholder also has the right, at such Bondholders option, to
require us to repurchase all (but not part) of such Bondholders Bonds at the Settlement Equivalent of the Early Redemption Amount if we undergo a
change of control, or if the Shares officially cease to be listed or admitted for trading on the TWSE. For a more detailed description of the Bonds, see
Terms and Conditions of the Bonds beginning on page 14. On May 11, 2015, the closing price per Share listed on the TWSE was NT$14.00.

Investing in the Bonds involves risks. See Risk Factors beginning on page 11.
ISSUE PRICE 100%
Under current ROC law, regulations and policies, except under very limited circumstances, PRC persons are not permitted to hold the Shares or
to register as shareholders of our company. Under the Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area
Investors promulgated by the ROC Executive Yuan on April 30, 2009 and amended on October 6, 2010, only qualified domestic institutional
investors, or QDIIs, and limited persons who meet the qualification requirements set forth therein, or Qualified PRC Investors, are permitted to own
certain securities of ROC listed companies provided that their shareholdings and the industries in which they are allowed to invest are subject to
certain restrictions set forth in the regulations and the applicable rulings mentioned above. In addition, a Qualified PRC Investor will be required to
apply for a separate approval if its investment, individually or in aggregate, amounts to or exceeds 10% of the shares of a ROC listed company.
The offering of the Bonds has not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities
Act), and the Bonds are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act
(Regulation S). The issuance of the Shares upon conversion of the Bonds has not been, and will not be, registered under the Securities Act. For a
period of 40 days after the Closing Date (as defined below), the Bonds may be convertible into Shares only by persons located outside the United
States who are not U.S. persons. For a description of these and certain further restrictions on offers and sales of the Bonds and the Shares issuable
upon conversion of the Bonds, and the distribution of this Offering Memorandum, see Transfer Restrictions and Plan of Distribution.
Bonds will be represented by beneficial interests in a global certificate (the Global Bond) in registered form, which will be registered in the
name of a nominee for, and shall be deposited on or about the Closing Date with, a common depositary for Euroclear Bank S.A./N.V., as operator of
the Euroclear System (Euroclear) and Clearstream Banking, socite anonyme (Clearstream). Interests in the Global Bond will be subject to
certain restrictions on transfer for a period of 40 days after the Closing Date.
Beneficial interests in the Global Bond will be shown in, and transfers thereof will be effected only through, records maintained by Euroclear,
Clearstream and their participants. Except as described herein, certificates for the Bonds will not be issued in exchange for interests in the Global
Bond.
We have received approval in-principle for the listing and quotation of the Bonds on the Singapore Exchange Securities Trading Limited
(SGX-ST). The SGX-ST assumes no responsibility for the correctness of any statement made, opinion expressed or reports contained herein.
Approval in-principle for the listing and quotation of the Bonds on the SGX-ST is not to be taken as an indication of the merits of United
Microelectronics or the Bonds.
The Initial Purchasers expect to deliver the Bonds to purchasers on May 18, 2015 (the Closing Date).

Joint Bookrunners

Lead Manager

May 11, 2015

TABLE OF CONTENTS
Page

Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ii

Presentation of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ii

Certain Cautionary Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ii

Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

iv

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

iv

Enforceability of Judgments in the Republic of China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Summary Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

Terms and Conditions of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14

The Global Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46

Certain Roc Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48

Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51

Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52

The Securities Market of Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

53

Foreign Investment and Exchange Controls in Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57

ROC Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60

Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62

Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67

Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68

INCORPORATION BY REFERENCE
The following documents relating to United Microelectronics are incorporated by reference herein:
(i) Annual Report on Form 20-F for the year ended December 31, 2014 dated and filed with the United States
Securities and Exchange Commission (the SEC) on April 21, 2015 (including the consolidated balance sheets
as of December 31, 2013 and 2014, the related consolidated statements of comprehensive income, changes in
equity and cash flows for each of the three years ended December 31, 2014 and the notes thereto), referred to in
this Offering Memorandum as the Year 2014 Annual Report and (ii) Report of Foreign Issuer on Form 6-K
dated and furnished to the SEC on May 4, 2015 (including the unaudited condensed consolidated balance sheets
as of March 31, 2014 and 2015 and unaudited condensed consolidated statements of comprehensive income and
cash flows for the three months ended March 31, 2014 and 2015), referred to in this Offering Memorandum as
the First Quarter of 2015 Report. The documents referred to in the preceding sentence will be delivered to and
be obtainable free of charge from the Transfer Agent in Singapore specified on the back cover of this Offering
Memorandum.

PRESENTATION OF INFORMATION
We have prepared this Offering Memorandum using a number of conventions, which you should consider
when reading the information contained herein. The references to United Microelectronics, we, us, our
and our company in this Offering Memorandum refer to United Microelectronics Corporation and its
consolidated subsidiaries, unless the context suggests otherwise. All references to Shares are to our common
shares, par value NT$10 per share. All references to ADSs are to our American Depositary Shares, which are
evidenced by American Depositary Receipts, also referred to as ADRs. Each ADS represents the right to
receive five of our Shares. All references to Bonds are to our Zero Coupon Convertible Bonds due 2020,
convertible into our Shares. All references to Taiwan and ROC are to Taiwan, the Republic of China. All
references to PRC and China are to the Peoples Republic of China excluding Hong Kong, Macau and
Taiwan. All references to ROC GAAP means generally accepted accounting principles in the Republic of
China and US GAAP means the generally accepted accounting principles in the United States. All references
to ROC FSC or FSC are to the Financial Supervisory Commission of the ROC unless otherwise indicated,
and all references to TWSE are to the Taiwan Stock Exchange.
All references in this Offering Memorandum to NT$ and NT dollars are to New Taiwan dollars; all
references to $, US$ and U.S. dollars are to United States dollars; and all references to S$ are to
Singapore dollars. For convenience only, certain NT dollar amounts have been translated into U.S. dollars using
NT$31.24 = US$1.00, the noon buying rate of the Federal Reserve Bank of New York on March 31, 2015. Such
translations should not be construed as representations that the NT dollar or amounts have been, could have been,
or could be converted to U.S. dollars at these or any other rate or at all.
In this Offering Memorandum, where information has been presented in thousands or millions of units,
amounts may have been rounded up or down. Accordingly, totals of columns or rows of numbers in tables may
not be equal to the apparent total of the individual items and actual numbers may differ from those contained
herein due to rounding.

CERTAIN CAUTIONARY STATEMENTS

We have made all reasonable inquiries and confirmed that (i) this Offering Memorandum contains all
information with respect to us, the Bonds and the Shares issuable upon the conversion of the Bonds which is
material in the context of the issue and offering of the Bonds, (ii) the statements contained in this Offering
Memorandum relating to us are in every material respect true and accurate and not misleading, and (iii) the
opinions and intentions expressed in this Offering Memorandum with regard to us are honestly held, have been
ii

reached after considering all relevant circumstances and are based on reasonable assumptions. There are no other
facts in relation to us, the Bonds or the Shares issuable upon conversion of the Bonds, the omission of which
would, in the context of the issue and offering of the Bonds, make this Offering Memorandum, as a whole,
misleading in any material respect, and all reasonable enquiries have been made by us to ascertain such facts and
to verify the accuracy of all such information and statements. We accept responsibility accordingly.
Notwithstanding the foregoing, certain market and industry data used in this Offering Memorandum were
obtained from publicly available information and industry publications, and we accept responsibility only for the
accurate extraction of information from such sources. Statements contained in this Offering Memorandum as to
the contents of any contract or other document referred to in this Offering Memorandum may not set forth all of
the terms and conditions of such contracts or other documents.
No person has been or is authorized to give any information or to make any representation concerning us,
the Bonds or the Shares issuable upon conversion of the Bonds, other than as contained herein and, if given or
made, any such other information or representation should not be relied upon as having been authorized by us or
the initial purchasers (the Initial Purchasers) under the purchase agreement on the date hereof. Neither the
delivery of this Offering Memorandum nor any offering, sale or delivery made in connection with the issue of the
Bonds shall, under any circumstance, constitute a representation that there has been no change or development
reasonably like to involve a change in our affairs since the date hereof or create any implication that the
information contained herein is correct as of any date subsequent to the date hereof. This Offering Memorandum
does not constitute an offer of, or any invitation by or on behalf of us or the Initial Purchasers to subscribe for or
purchase, any of the Bonds or the Shares issuable upon conversion of the Bonds, and may not be used for the
purpose of an offer to, or a solicitation by, anyone in any jurisdiction or in any circumstances in which such offer
or solicitation is not authorized or is unlawful.
No representation or warranty, express or implied, is made or given by the Initial Purchasers as to the
accuracy, completeness or sufficiency of the information contained in this Offering Memorandum, and nothing
contained in this Offering Memorandum is, or shall be relied upon as, a promise, representation or warranty by
the Initial Purchasers. This Offering Memorandum is not intended to provide the basis of any credit or other
evaluation and nor should it be considered as a recommendation by either us or the Initial Purchasers that any
recipient of this Offering Memorandum should purchase the Bonds. Each potential purchaser of the Bonds
should determine for itself the relevance of the information contained in this Offering Memorandum, and its
purchase of the Bonds should be based upon such investigations as it deems necessary.
The distribution of this Offering Memorandum and the offering of the Bonds in certain jurisdictions may be
restricted by law. Persons into whose possession this Offering Memorandum comes are required by us and the
Initial Purchasers to inform themselves about and to observe any such restrictions. No action is being taken to
permit a public offering of the Bonds or the Shares issuable upon conversion of the Bonds or the distribution of
this Offering Memorandum in any jurisdiction where action would be required for such purposes. For a
description of certain further restrictions on offers, sales and resales of the Bonds and distribution of this Offering
Memorandum, see Plan of Distribution.
In making an investment decision, investors must rely on their own examination of us and the terms of the
Offering, including the merits and risks involved. See Risk Factors for a discussion of certain factors to be
considered in connection with an investment in the Bonds. Each person receiving this Offering Memorandum
acknowledges that such person has not relied on the Initial Purchasers or any person affiliated with the Initial
Purchasers in connection with its investigation of the accuracy of such information or its investment decision.
This Offering Memorandum has been prepared on the basis that any purchaser of Bonds is a person or entity
having such knowledge and experience of financial matters to be capable of evaluating the merits and risks of
such purchase. Before making any investment decision with respect to the Bonds, prospective investors should
consult their own counsel, accountants or other advisers and carefully review and consider such an investment
decision in light of the foregoing.
iii

Unless expressly stated otherwise, all financial data as of and for the fiscal years ended December 31, 2012,
2013 and 2014 included in this Offering Memorandum are presented on an audited consolidated basis in
accordance with IFRSs. Also, unless expressly stated otherwise, all financial data for the three months ended
March 31, 2014 and 2015 included in this Offering Memorandum are presented on an unaudited consolidated
basis. The unaudited consolidated financial data for the three months ended March 31, 2015 are not necessarily
indicative of the results that may be expected for the year ending December 31, 2015.
THE BONDS HAVE NOT BEEN RECOMMENDED BY ANY UNITED STATES FEDERAL OR STATE
OR FOREIGN SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT REVIEWED OR PASSED ON THE ACCURACY OR
ADEQUACY OF THIS OFFERING MEMORANDUM, AND ANY REPRESENTATION TO THE
CONTRARY MAY BE A CRIMINAL OFFENSE.

AVAILABLE INFORMATION
We are subject to the information requirements applicable to foreign private issuers under the U.S.
Securities Exchange Act of 1934, as amended (the Exchange Act), and in accordance therewith file reports and
other information with the SEC. We are required under the Exchange Act to file with the SEC annual reports on
Form 20-F and periodic reports on Form 6-K. You may read and copy any information filed with the SEC at the
SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You can also request copies of the
documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our SEC
filings are also available to the public from the SECs website at www.sec.gov. The information contained in the
SEC website is not a part of this Offering Memorandum.

FORWARD-LOOKING STATEMENTS
This Offering Memorandum contains forward-looking statements. These 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 the companies, including, among
other things:

our dependence on frequent introduction of new products, services and technologies based on the latest
developments;

the intensely competitive semiconductor, communications, consumer electronics and PC industries and
markets;

risks associated with our international business activities;

our dependence on key personnel;

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

general economic and political conditions, including those related to the semiconductor,
communications, consumer electronics and PC industries;

possible disruptions in commercial activities caused by natural and human induced disasters, including
terrorist activities and armed conflicts, that may reduce end-user purchases relative to expectations and
orders;
iv

fluctuations in foreign currency exchange rates; and

those other risks identified in the Risk Factors section beginning on page 11 of this Offering
Memorandum.

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 Offering
Memorandum 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 Offering Memorandum might not
occur and our actual results could differ materially from those anticipated in these forward-looking statements.

ENFORCEABILITY OF JUDGMENTS IN THE REPUBLIC OF CHINA

We are a company limited by shares and incorporated under the Company Act of the Republic of China (the
Company Act). Substantially all of our directors and executive officers and certain other parties named herein
are residents of the Republic of China and a substantial portion of our assets and the assets of such persons are
located in the Republic of China. As a result, it may not be possible for investors to effect service of process
upon us or such persons outside of the Republic of China, or to enforce against any of them judgments obtained
in courts outside of the Republic of China, including those predicated upon the civil liability provisions of the
securities laws of the United States or any State or territory within the United States.
We have been advised that any final judgment obtained against us or such persons in any court other than
the courts of the Republic of China in respect of any legal suit or proceeding arising out of or relating to the
Bonds or the Shares issuable upon the conversion of the Bonds will not be enforced by the courts of the Republic
of China if any of the following situations shall apply to such final judgment: (i) the court rendering the judgment
does not have jurisdiction over the subject matter according to the laws of the Republic of China; (ii) the
judgment or the court procedure based on which such judgment was rendered is contrary to public order or good
morals of the Republic of China; (iii) 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 Republic of China;
and (iv) judgments of the courts of the Republic of China are not recognized and enforceable in the court
rendering the judgment on a reciprocal basis. Moreover, a party seeking to enforce a foreign judgment in the
Republic of China would, except under limited circumstances, be required to obtain foreign exchange approval
from the Central Bank of the Republic of China (Taiwan) (the CBC) for the remittance out of the Republic of
China of any amounts recovered in respect of such judgment denominated in a currency other than NT dollars.

SUMMARY
You should read the following summary together with the more detailed information regarding us, the
Bonds, our Shares and our financial statements and notes to those statements appearing elsewhere, or
incorporated by reference, in this Offering Memorandum.

Business Overview
We are one of the worlds 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 50.6%, 28.8%, 16.3% and 4.3%, respectively, in 2014.
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, 28, 14 and 10
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 todays 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.
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 functionsmanufacturing 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 2014, our companys top ten customers accounted for
54.6% 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.

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 to:

operate as a customer-driven foundry;

build up customer-focused partnership business model;

continue to focus on high growth applications and customers and actively explore new market
opportunities;

maintain our leading position in mass-producible semiconductor technology and selectively pursue
strategic investments in new technologies; and

maintain scale and capacity capabilities to meet customer requirements, with a focus on 12-inch wafer
facilities for future expansion.

Corporate and Other Information

We were incorporated in 1980 as a company limited by shares pursuant to the Company Act. Our Common
Shares were listed on the TWSE in July 1985. Our principal executive office is located at No. 3 Li-Hsin Road II,

Hsinchu Science Park, Hsinchu City, Taiwan, Republic of China. According to Article 2 of our articles of
incorporation, our primary business objective is the fabrication of integrated circuits for others.
As of March 31, 2015, our authorized share capital was NT$260 billion (US$8.3 billion), divided into
26 billion Shares, of which approximately 12.8 billion Shares were issued and approximately 12.5 billion Shares
were outstanding. All Shares presently issued are fully paid and in registered form. Horizon Securities Co., Ltd.
is the registrar of our Shares.

SUMMARY FINANCIAL DATA

The summary balance sheet data as of December 31, 2013 and 2014 and the summary statements of
comprehensive income and cash flow data for the years ended December 31, 2012, 2013 and 2014 have been
derived from our audited consolidated financial statements and notes included in the Year 2014 Annual Report
and incorporated by reference into this Offering Memorandum. The summary balance sheet financial data as of
December 31, 2012 have been derived from our audited consolidated financial statements and notes included in
our Annual Report on Form 20-F for the year ended December 31, 2013, which is not incorporated by reference
into this Offering Memorandum. The summary balance sheet data as of March 31, 2014 and 2015 and the
summary statements of comprehensive income and cash flow data for the three months ended March 31, 2014
and 2015 have been derived from our unaudited condensed consolidated financial statements and notes included
in the First Quarter of 2015 Report and are incorporated by reference into this Offering Memorandum.
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 ROC GAAP with
reconciliations to US GAAP. The summary financial data set forth below for the years ended and as of
December 31, 2013 and 2014 should be read in conjunction with Item 5. Operating and Financial Review and
Prospects included in the Year 2014 Annual Report and the audited consolidated financial statements and the
notes to those statements that are incorporated by reference into this Offering Memorandum.

The summary financial data set forth below for the three months ended and as of March 31, 2014 and 2015
should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to
those statements included in the First Quarter of 2015 Report and are incorporated by reference into this Offering
Memorandum.
Three Months Ended
March 31,
2014
2015
(Unaudited)
NT$
NT$
NT$
NT$
NT$
(in millions, except per share and per ADS data)

Years Ended December 31,

2012
2013
2014

Consolidated Statements of Comprehensive Income

Data
Net operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,675 123,812 140,012 31,694 37,650
Operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96,365) (100,249) (108,159) (25,793) (28,495)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net other operating income and expenses . . . . . . . . . . . . . .

19,310
(15,697)
(2,791)

23,563
(19,406)
(125)

31,853
(21,238)
(539)

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-operating income and expenses . . . . . . . . . . . . . . . . . .

822
5,473

4,032
10,309

10,076
3,496

941
351

4,099
255

Income from continuing operations before income tax . . . .

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,295
(2,146)

14,341
(2,257)

13,572
(3,125)

1,292
(181)

4,354
(442)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . .

4,149
(6,381)

12,084
198

10,447
6,069

1,111
4,130

3,912
(107)

Total comprehensive income (loss) . . . . . . . . . . . . . . . . . . .

(2,232)

12,282

16,516

5,241

3,805

6,094
(1,945)

12,609
(525)

11,109
(662)

1,180
(69)

3,980
(68)

(281)
(1,951)

12,796
(514)

17,035
(519)

5,261
(20)

3,910
(105)

Net income attributable to:

Stockholders of the parent . . . . . . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income (loss) attributable to:
Stockholders of the parent . . . . . . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . .
Earnings per share: (1)
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common shares used in earnings per share calculation:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings per ADS equivalent:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,901
5,016
56

9,155
4,914
(142)

0.49
0.46

1.02
0.96

0.90
0.89

0.09
0.09

0.32
0.31

12,464
13,289

12,346
13,150

12,334
12,719

12,480
13,158

12,526
12,660

2.44
2.32

5.11
4.82

4.50
4.44

0.45
0.45

1.60
1.55

2012

As of December 31,
2013
2014

NT$

Consolidated Balance Sheets Data

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital stock (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends declared per share (4) . . . . . . . . . . . . . . . . . . . . . . .

281,214
79,526
201,688
129,521
0.50

As of March 31,
2014
2015
(Unaudited)
NT$
NT$
NT$
NT$
(in millions, except per share data)

293,914
84,270
209,644
126,946
0.40

310,648
90,309
220,339
127,303
0.50

301,627 321,065
83,852
91,803
217,775 229,262
127,029 127,510
N/A
N/A

(1) Earnings per share is calculated by dividing net income by the weighted average number of common 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.

THE OFFERING
Phrases used in this summary and not otherwise defined shall have the meanings given to them in Terms
and Conditions of the Bonds.
Issuer

United Microelectronics Corporation (the Company).

Issue

US$600,000,000 aggregate principal amount of Currency Linked

Zero Coupon Convertible Bonds due 2020, convertible into the
Companys Shares of the Company.

Denomination

US$200,000 and integral multiples thereof.

Status

The Bonds constitute direct, unconditional, unsubordinated and,

subject to the negative pledge set forth below, unsecured obligations
of the Company and shall at all times rank pari passu and without any
preference or priority among themselves and, subject to the negative
pledge set forth below, with all other present and future direct,
unconditional, unsubordinated and unsecured obligations of the
Company, except as may be required by mandatory provisions of law.
In addition, the Shares issuable upon conversion of the Bonds will
rank pari passu with all of our Shares outstanding as of the date of
conversion of the Bonds.

Interest

No interest will accrue on the Bonds.

Closing Date

May 18, 2015

Negative Pledge

So long as any of the Bonds remain outstanding, the Company may

not create or permit to subsist any mortgage, charge, pledge, lien or
other form of encumbrance or security interest on the Companys
property, assets or revenues, present or future, in respect of any
Relevant Debt or to secure any guarantee or indemnity in respect
thereof without granting equivalent security for the Bonds. Relevant
Debt means any present or future indebtedness in the form of, or
represented by, bonds, notes, debentures, loan stock or other similar
securities which are: (1) by their terms payable, or confer a right to
receive payments, in any currency other than NT dollars or are
denominated in NT dollars and more than 50% of the aggregate
principal amount thereof is initially distributed outside of the ROC by
or with the Companys authorization, and (2) for the time being, or
are capable of being, quoted, listed, or ordinarily dealt in on any stock
exchange, over the counter or other securities market, but excluding
any such indebtedness which has a stated maturity of not exceeding
one year.

Conversion Period

Unless previously redeemed, repurchased and canceled or converted

and except during the Closed Period or suspension period (if any), the
Bonds may be converted at any time starting from June 28, 2015,
which is the 41st calendar day after the Bonds are issued, up to and
including May 8, 2020, which is the 10th calendar day prior to the
Maturity Date.

Closed Periods or a Closed Period currently include: (1) any

period beginning on the fifteenth (15th) trading day prior to the period
during which the Company has to close its stock transfer books for
distribution of shares dividends, cash dividends or for subscription of
new shares in a capital increase for cash and ending on the record date
for the distribution of the relevant dividends, rights and benefits;
(2) any period beginning on (x) the sixtieth (60th) day before a general
shareholders meeting of the Company, (y) the thirtieth (30th) day
before a special shareholders meeting of the Company and (z) the
fifth (5th) days before the record date of the Company for
determination of shareholders entitle to receive dividends, bonuses or
other benefits, and ending on such meeting date or record date; (3) the
period beginning on the record date of capital decrease of the
Company and ending on the preceding day immediately prior to the
trading of shares reissued after the capital decrease; and (4) any other
periods stipulated by the ROC laws and regulations or rules of TWSE
applicable from time to time during which the Conversion Right is
suspended, the Company cannot issue new Shares or the Company
shall close its stock transfer books.
The Company has agreed to use its best efforts to ensure that all
Closed Periods during any 365-day period shall not be in the
aggregate more than 120 calendar days. However, the Company
cannot provide any assurance that all Closed Periods during any
365-day period will not be more than 120 calendar days.
Conversion Price

The initial Conversion Price will be NT$17.50 per Share. The

applicable Conversion Price will be subject to adjustment for, among
other things, subdivision or consolidation of Shares, bonus issues,
rights issues, distributions of cash, stock dividends or other dilutive
events.

Final Redemption

Unless previously redeemed, repurchased and canceled or converted

in the circumstances referred to in the Indenture, the Bonds will be
redeemed at the Settlement Equivalent of 98.76% of their principal
amount on the Maturity Date.

Maturity Date

May 18, 2020.

Redemption at the Option of the

Company

The Company may redeem all or a portion (being US$200,000 in

principal amount or an integral multiple thereof) of the Bonds at any
time on or after May 18, 2018, subject to giving no less than 30 nor
more than 60 days advance notice, at the Settlement Equivalent of
the Early Redemption Amount, provided that the Market Price (as
defined below) on each trading day for 20 out of 30 consecutive
Trading Days, the last of which occurs not more than five Trading
Days prior to the date of the redemption notice, shall have been at
least 125% of the Conversion Price or the Last Adjusted Conversion
Price, as applicable, on each such day.

Notwithstanding the forgoing, the Company may redeem the Bonds,

in whole but not in part, at any time, on not less than 30 nor more
than 60 days notice, at the Settlement Equivalent of the Early
Redemption Amount on the date of such Redemption Date if more
than 90% of the principal amount of the Bonds originally issued has
been redeemed, repurchased and canceled, or converted.
Tax Redemption

The Company may redeem, in whole but not in part, the Bonds at the
Settlement Equivalent of the Early Redemption Amount in the event
of certain changes in taxation in the ROC resulting in the Company
becoming required to pay Additional Amounts. See Terms and
Conditions of the BondsRedemption, Repurchase and
CancellationRedemption for Tax Reasons.
Bondholders may elect not to have their Bonds redeemed by the
Company in such event, in which case the Bondholders shall not be
entitled to receive payments of such Additional Amounts.

Repurchase at the Option of the

Bondholders

The Bondholder shall have the right, at the Bondholders option, to

require the Company to repurchase such Bondholders Bonds in
whole or in part (being US$200,000 in principal amount or an integral
multiple thereof) on May 18, 2018 at the Settlement Equivalent of
99.25% of their principal amount, by giving not less than 30 nor more
than 60 days notice. See Terms and Conditions of the Bonds
Redemption, Repurchase and CancellationRepurchase at the
Option of the Bondholders.

Repurchase in the Event of Delisting

In the event that our Shares officially cease to be listed or admitted

for trading on the TWSE, each Bondholder shall have the right, at
such Bondholders option, to require the Company to repurchase, in
whole but not in part, such Bondholders Bonds at the Settlement
Equivalent of the Early Redemption Amount on the date set by the
Company for such repurchase, which shall be not less than 30 days
nor more than 60 days following the date on which the Trustee mails
to each Bondholder a notice regarding such event. See Terms and
Conditions of the BondsRedemption, Repurchase and
CancellationRepurchase in the Event of Delisting.

Repurchase in the Event of a Change of

Control

If a Change of Control (as defined in Condition 8(G)) occurs with

respect to the Company, each Bondholder shall have the right at such
Bondholders option, to require the Company to repurchase, in whole
but not in part, such Bondholders Bonds at the Settlement Equivalent
of the Early Redemption Amount on the date set by the Company for
such repurchase, which shall not be less than 30 nor more than
60 days following the date on which the Company notifies the Trustee
of the Change of Control. See Terms and Conditions of the Bonds
Redemption, Repurchase and CancellationRepurchase of the Bonds
in the Event of a Change of Control.

Form and Registration of the Bonds

The Bonds will be issued in registered form. The Bonds will be

represented by beneficial interests in the Global Bond, which will be

registered in the name of a nominee of, and deposited on or about the

Closing Date with, a common depositary (the Common Depositary)
for, Euroclear and Clearstream. Interests in the Global Bond will be
subject to certain restrictions on transfer for a period of 40 days after
the Closing Date of this offering. Beneficial interests in the Global
Bond will be shown in, and transfers thereof will be effected only
through, records maintained by Euroclear and Clearstream and their
participants. Except as described herein, certificates for the Bonds
will not be issued in exchange for beneficial interests in the Global
Bond.
Until the 40th day after the Closing Date, the Global Bond will bear
such appropriate legend as required under the Securities Act. The
Global Bond, or any interest therein, may not be transferred except in
compliance with the transfer restrictions set forth in the legend.
Governing Law

The laws of the State of New York.

Trustee

Citicorp International Limited

Paying Agents; Conversion Agents

Citibank, N.A., London Branch

Listing and Trading

The Bonds are a new issue of securities and there is currently no

established trading market for the Bonds. Accordingly, there can be
no assurance as to the development or liquidity of any market for the
Bonds. We have received approval in-principle for the listing of the
Bonds on the SGX-ST. The minimum board lot size in which the
Bonds will be traded on the SGX-ST is US$200,000 for so long as the
Bonds are listed on the SGX-ST. We have undertaken to list the
shares issued upon the conversion of the Bonds on the TWSE. The
shares will not be listed on the SGX-ST.

Lock-up

The Company has agreed that without consent of Credit Suisse (Hong
Kong) Limited (Credit Suisse), Morgan Stanley Services Pty
Limited (Morgan Stanley) and The Hongkong and Shanghai
Banking Corporation Limited (HSBC) that, the Company will not,
subject to certain exceptions, until 90 days after the date of this
Offering Memorandum, offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any Shares, ADSs or
securities convertible into or exchangeable or exercisable for Shares
or ADSs. The Company has further agreed that until 90 days after the
date of this Offering Memorandum, it will not, subject to certain
exceptions (including any issuance of ADSs in connection with a
conversion sale program pursuant to Rule 144 of, or any available
registration exemption under, the Securities Act), (1) provide publicly
disclosable assistance, including making public filings with the SEC
and certain regulatory authorities in the ROC, to any other person
(including the Companys shareholders), and (2) make any demand
for or exercise any right with respect to the registration of any of the
ADSs or Shares or any security convertible into or exercisable or
exchangeable for ADSs or Shares. See Plan of Distribution.

10

RISK FACTORS
The Offering involves a high degree of risk. Our business and operations are subject to various risks, many
of which are beyond our control. If any of the risks described below, or incorporated by reference, occurs, our
business, financial condition or results of operations could be seriously harmed. You should carefully consider
the risks described below and the other information contained or incorporated by reference in this Offering
Memorandum before deciding to invest in the Bonds.
An active trading market for the Bonds may not develop.
The Bonds are a new issue of securities for which there is currently no trading market. We have been
advised that the Initial Purchasers intend to make a market in the Bonds, but they are not obligated to do so and
may discontinue such market making activity at any time without notice. The Bonds are being offered pursuant
to exemptions from registration under the Securities Act and, as a result, the Initial Purchasers will only be able
to resell their Bonds in transactions that have been registered under the Securities Act or in transactions not
subject to or exempt from registration under the Securities Act. We cannot predict whether an active trading
market for the Bonds will develop or to be sustained. If an active trading market were to develop, the Bonds
could trade at prices that may be higher or lower than the price at which the Bonds are issued depending on many
factors, including:

prevailing interest rates and the markets for similar securities;

our financial condition, results of operations, historic financial performance and future prospects;

the price of our ADSs and Shares; and

general economic conditions.

If an active market for the Bonds fails to develop or be sustained, the trading price of such Bonds could be
materially and adversely affected. Although we have received approval in-principle for the listing of the Bonds
on the SGX-ST, we cannot assure you that the Bonds will be or will remain listed on this market or that active
trading markets will develop for the Bonds. The Bonds may not be publicly offered, sold, pledged or otherwise
transferred in any jurisdiction where registration may be required.
Transfers of the Bonds are restricted.
You may only offer to sell, or sell, the Bonds pursuant to an effective registration statement or in reliance on
an applicable exemption from the registration requirements of the Securities Act and applicable state securities
laws. See Transfer Restrictions. Neither the Bonds nor the Shares issuable upon conversion of the Bonds have
been, nor will they be, registered by us under the securities laws of the United States or elsewhere and the Bonds
may not be publicly offered, sold, pledged or otherwise transferred in any jurisdiction where such registration
may be required. For a period of 40 days after the Closing Date, the Bonds may be convertible into Shares only
by persons other than U.S. persons located outside the United States. See Transfer Restrictions. The Bonds
may not be offered or sold, directly or indirectly, in the ROC.
There are limitations on your ability to exercise the conversion right.
You will not be able to exercise your conversion right during any Closed Period. See Terms and
Conditions of the BondsConversion for a description of the Closed Period. We have agreed to use our best
efforts to ensure that the Closed Period in any given year will not exceed, in the aggregate, 120 calendar days,
having taken into account the applicable ROC laws and regulations. However we cannot assure you that the
Closed Period will not be more than 120 calendar days in any given year.
Under current ROC law, except under very limited circumstances, PRC persons are not permitted to hold
the Shares or to register as shareholders of our company. Under the Regulations Governing Securities Investment
11

and Futures Trading in Taiwan by Mainland Area Investors promulgated by the ROC Executive Yuan on
April 30, 2009 and amended on October 6, 2010, only qualified domestic institutional investors, or QDIIs, and
limited persons who meet the qualification requirements set forth therein, or Qualified PRC Investors, are
permitted to own certain securities of ROC listed companies provided that their shareholdings and the industries
in which they are allowed to invest are subject to certain restrictions set forth in the regulations and the
applicable rulings mentioned above.
In addition, a Qualified PRC Investor will be required to apply for a separate approval of Investment
Commission of the ROC Ministry of Economic Affairs, or ROC IC, if its investment, individually or in
aggregate, amounts to or exceeds 10% of the shares of a ROC listed company. PRC Investors may only invest in
certain industries in the Positive List as promulgated by ROC IC. Since not all of the current business items of
our Company fall within the current Positive List, ROC IC may disapprove any Qualified PRC Investor to hold
10% or more of our Shares.
We cannot assure you that the market for our Shares will be active and liquid; the offering of the Bonds will
not result in additional liquidity to those markets until the commencement of the Conversion Period, if at all.
Between January 1, 2006 and May 7, 2015, the average daily trading volume for our Shares on the TWSE
was approximately 54 million shares. We cannot assure you that the liquidity of our Shares will be maintained or
enhanced after the offering of the Bonds. Since the holders of the Bonds cannot convert the Bonds into our
Shares until June 28, 2015, and may elect never to exercise their conversion rights, the sale of the Bonds will not
result in additional liquidity of our Shares until such dates, if at all. Market prices of technology companies
shares have been and continue to be extremely volatile. As a result, volatility in the price of our Shares may be
caused by factors outside of our control and may be unrelated or disproportionate to our operating results.
Our public shareholders may have more difficulty in protecting their interests than they would as shareholders
of a U.S. corporation.
Our corporate affairs are governed by our articles of incorporation and by-laws governing ROC
corporations. The rights of our shareholders to bring shareholders suits against us or our board of directors under
ROC law are much more limited than those of the shareholders of U.S. corporations. Therefore, our public
shareholders may have more difficulty in protecting their interests in connection with actions taken by our
management, members of our board of directors or controlling shareholders than they would as shareholders of a
U.S. corporation.
Future sales of securities by our company or existing shareholders may hurt the value of your investment.
The market price of the Bonds and Shares could decline as a result of future sales of a large number of
Shares or the perception that such sales could occur. If we or the holders of our Shares sell a large number of our
Shares, the market price for the Bonds or Shares could be depressed. Although we have agreed, subject to certain
exceptions, not to offer, sell or agree to sell, directly or indirectly, or otherwise dispose of the Shares and ADSs
subject to lock-up agreements without the prior written consent of Credit Suisse, Morgan Stanley and HSBC for
a period of 90 days from the date of this Offering Memorandum, if Credit Suisse, Morgan Stanley and HSBC
consent to an earlier sale, or when the 90-day period expires, we will be able to sell Shares in the public market,
subject to legal restrictions.
Under applicable R.O.C. laws and regulations, holders of our Bonds outside of the R.O.C. will need to appoint
a local agent and a tax guarantor in the R.O.C. in order to hold the Common Shares issuable upon conversion
of the Bonds, so these requirements may restrict your ability to freely convert the Bonds and hold the Common
Shares if you are outside of the R.O.C.
Non-ROC Bondholders, including the PRC Bondholders meeting the applicable requirements under ROC
laws and regulations, who convert their Bonds into our Shares and register as our shareholder are required under
12

current ROC laws and regulations to appoint an agent, also referred to as a Tax Guarantor in this Offering
Memorandum, in the ROC for filing tax returns and making tax payments on their behalf. A Tax Guarantor will
be required to meet the qualifications set by the ROC Ministry of Finance and will act as the guarantor of the
holders tax payment obligations. Evidence of the appointment of a Tax Guarantor and the approval of such
appointment or tax clearance certification are required as conditions to repatriating the holders profits derived
from the sale of Shares. There can be no assurance that holders will be able to appoint and obtain approval for a
Tax Guarantor in a timely manner.
In addition, Non-ROC Bondholders, including the PRC Bondholders meeting the applicable requirements
under ROC laws and regulations, who convert their Bonds into our Shares are required under current ROC laws
and regulations to appoint a local bank, approved by the ROC FSC to provide custodial services, to act as
custodian for confirmation and settlement of trades, safekeeping of securities and cash proceeds, payment of
taxes and reporting and declaration of information. Unless these requirements are satisfied, Non-ROC
Bondholders will not be able to receive and hold or otherwise transfer Shares on the TWSE.
You may not be able to enforce a judgment of a foreign court in the ROC
We are a company limited by shares incorporated under the ROC Company Act. Most of our assets and
most of our directors and 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 ROC counsel that any judgment obtained against us in any
court outside the ROC arising out of or relating to the Bonds will not be enforced by ROC 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 ROC
law;

the judgment or the court procedures based on which such judgment was rendered is contrary to the
public order or good morals of the ROC;

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 ROC; and

judgments of ROC courts are not recognized and enforceable in the jurisdiction of the court rendering
the judgment on a reciprocal basis.

13

TERMS AND CONDITIONS OF THE BONDS

The following are the terms and conditions (except for sentences in italics) of the Bonds (as defined below),
which include summaries of, and are subject to, the detailed provisions of an indenture to be dated as of May 18,
2015 between United Microelectronics Corporation (the Company) and Citicorp International Limited, as
trustee (the Trustee) for the Bondholders (the Indenture). We urge you to read the Indenture in its entirety
as it defines your rights and obligations as a holder of the Bonds.
The issue of the US$600,000,000 aggregate principal amount of Currency Linked Zero Coupon Convertible
Bonds due 2020 (the Bonds, which shall include, unless the context requires otherwise, any further Bonds
issued in accordance with the Indenture and consolidated and forming a single series therewith) was authorized
by a resolution of our board of directors passed on March 18, 2015. The Bonds are limited to US$600,000,000 in
aggregate principal amount. The Bonds are being issued pursuant to the Indenture, to be dated as of May 18,
2015 between the Company and the Trustee for the holders of the Bonds (each, a Bondholder and together, the
Bondholders). We are also entering into a paying and conversion agency agreement, referred to as the
Agency Agreement, to be dated as of May 18, 2015, by and among the Company, the Trustee, the conversion
agents (the Conversion Agents), the paying agents (the Paying Agents) and the transfer agents (the
Transfer Agents) relating to the Bonds. The terms and conditions described in this section, which we
sometimes refer to as the Conditions in this Offering Memorandum, include summaries of, and are subject to, the
detailed provisions of the Indenture. The capitalized terms not defined herein will have the meanings given to
them in the Indenture. You are entitled to the benefits of the Indenture and are bound by, and are deemed to have
notice of, all the provisions of the Indenture and the Agency Agreement. In the event of any inconsistency
between the terms of the Indenture and the Conditions or between the terms of the Indenture and the Agency
Agreement, the terms of the Indenture shall govern. Copies of the Indenture and of the Agency Agreement will be
available for inspection at the principal corporate trust office of the Trustee, being on the date hereof at Citicorp
International Limited, 39th Floor, Citibank Tower, Citibank Plaza, 3 Garden Road, Central, Hong Kong, and at
the specified offices of the Paying Agents, the Conversion Agents and the Transfer Agents.
1.

Status

The Bonds constitute direct, unconditional, unsubordinated and, subject to the provisions of Condition 3,
unsecured obligations of the Company and shall at all times rank pari passu and without any preference or
priority among themselves and, subject to the provisions of Condition 3, with all other present and future direct,
unconditional, unsubordinated and unsecured obligations of the Company, except as may be required by
mandatory provisions of law. In addition, the Shares issuable upon conversion of the Bonds will rank pari passu
with all of our Shares outstanding as of the date of conversion of the Bonds.
2.

Form, Denomination and Title

Except in the limited circumstances set forth under The Global BondIndividual Definitive Bonds, the
Bonds will only be issued to Holders in book-entry form. All of the Bonds will be sold in offshore transactions in
reliance on Regulation S and will be represented by a global certificate in registered form without interest
coupons (the Global Bond) and will be registered in the name of nominee for the common depositary for
Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, socit anonyme (Clearstream).
(A) Form and Denomination
The Bonds will be issuable only in registered form and only in denominations of integral multiples of
US$200,000. The Bonds shall initially be represented by the Global Bond and only under the limited
circumstances described in the Global Bond and the Indenture shall a Certificate (as defined below) be issued to
each Bondholder to represent its individual holding of Bonds. See The Global BondIndividual Definitive
Bonds. Each Certificate, if issued, will have an identifying number which will be recorded on the relevant
14

Certificate and in the register of Bondholders that the Company will cause to be kept by the registrar appointed
pursuant to the Agency Agreement (the Registrar). Certificate means a certificate issued in respect of the
Global Bond or individual definitive bonds.
(B) Title
The Bonds will be registered instruments, title to which will pass only by registration in the register of the
Bonds (the Bond Register). Each Bondholder will be treated as the owner for all purposes (whether or not it is
overdue and regardless of any notice of ownership, trust or any interest or any writing on, or the theft or loss of,
the Bond) and neither the Company nor the Trustee nor any agent thereof shall be affected by notice to the
contrary. In these Conditions, Bondholder and Holder in relation to a Bond means the person in whose
name a Bond is registered on the Bond Register.
3.

Negative Pledge

So long as any of the Bonds remain outstanding (as defined in the Indenture), the Company shall not create
or permit to subsist any mortgage, charge, pledge, lien or other form of encumbrance or security interest
(Security) upon the whole or any part of its property, assets or revenues, present or future, to secure any
Relevant Debt (as defined below) or to secure any guarantee of or indemnity in respect of any Relevant Debt
unless, at the same time or prior thereto, the Companys obligations under the Bonds and the Indenture (i) are
secured equally and ratably therewith, or (ii) have the benefit of such other security, guarantee, indemnity or
other arrangement as shall not be materially less beneficial to the Bondholders or as shall be approved by an
Extraordinary Resolution (as defined in the Indenture) of the Bondholders.
For the purposes of these Conditions:
Relevant Debt means any present or future indebtedness in the form of, or represented by, bonds, notes,
debentures (debentures for this purpose shall exclude, for the avoidance of doubt, fixed or floating charges, loan
agreements or other documents creating or evidencing indebtedness that are not commonly known as securities),
loan stock or other similar securities that (i) either are, by their terms, payable, or confer a right to receive
payments, in any currency other than NT dollars or are denominated in NT dollars and more than 50% of the
aggregate principal amount thereof is initially distributed outside the ROC by or with the authorization of the
Company thereof and (ii) are for the time being, or are capable of being, quoted, listed or ordinarily dealt in on
any stock exchange, over the counter or other securities market but excluding any such indebtedness that has a
stated maturity of not exceeding one year.
4.

Transfers of Bonds; Issue of Certificates

Transfers of interests in the Bonds will be effected in accordance with the rules of the relevant clearing
systems. In addition, transfers of the Bonds are subject to certain restrictions. See Transfer Restrictions.
(A) Transfer
A Bond may be transferred by delivering the Certificate evidencing that Bond, duly endorsed and
accompanied by a form of transfer duly completed and signed, to the specified office of the Trustee and the
Registrar or any of the other Transfer Agents appointed pursuant to the Agency Agreement. The Registrar and
any Transfer Agent may decline to effect any exchange or transfer of a Bond (i) during the period of 15 days
ending on (and including) the due date for any payment of the principal of and premium and other amounts of
such Bond or the date for an early redemption of Bonds pursuant to Condition 8(B), (ii) after such Bond has been
drawn for redemption under, and notice thereof is given pursuant to, Condition 8(D) or (iii) in respect of which a
Conversion Notice (as defined in Condition 6(B)) has been delivered in accordance with Condition 6(B).

15

(B) Delivery of New Certificates

Each new Certificate to be issued on the transfer of a Bond will, within five business days of receipt by the
Registrar or the relevant Transfer Agent of the original Certificate and the form of transfer, be mailed at the risk
of the Bondholder entitled to the Bond to the address specified in the form of transfer. Where some but not all the
Bonds in respect of which a Certificate is issued are to be transferred, converted or redeemed, a new Certificate
in respect of the Bonds not so transferred, converted or redeemed will, within five business days of deposit or
surrender of the original Certificate with or to the Registrar or the relevant Transfer Agent, Conversion Agent or
Paying Agent, be mailed at the risk of the Bondholder of the Bonds not so transferred, converted or redeemed to
the address of such Bondholder appearing on the Bond Register.
For the purposes of this Condition 4, business day means a day other than a Saturday or Sunday on which
banks are open for business in the city in which the specified office of the Registrar, the relevant Transfer Agent,
Conversion Agent or Paying Agent with whom a Certificate is deposited or surrendered in connection with a
transfer, conversion or redemption is located.
(C) Formalities Free of Charge
No service charge shall be made for any registration of transfer or exchange of Bonds, provided that the
Company or any of the Transfer Agents may require payment of a sum sufficient to cover any tax or other
governmental charges that may be imposed and such transfer shall not be made unless and until the required
payment described herein is made.
(D) Regulations
All transfers of Bonds and entries on the register of Bondholders will be made subject to the detailed
regulations concerning transfer of Bonds attached as a schedule to the Agency Agreement. A copy of the current
regulations will be mailed (or sent via facsimile) by the Registrar to any Bondholder upon request.
(E) Change of Transfer Agent
The Company reserves the right at any time, with the prior written approval of the Trustee, to vary or
terminate the appointment of any Transfer Agent and to appoint additional or other Transfer Agents, in each case
in accordance with the Agency Agreement. Notice of any such termination or appointment and of any changes in
the specified offices of the Transfer Agents will be given promptly by the Company to the Bondholders in
accordance with Condition 15.
5.

Interest
The Bonds do not bear any interest.

6.

Conversion

In connection with the exercise of the Conversion Rights, the Company will be required to issue and deliver
Shares. The Company has undertaken to procure such Shares by increasing the Companys paid-in share capital
and, if necessary, its authorized capitalization for the issuance of new Shares, if approval from the ROC FSC is
obtained and future changes to ROC laws and regulations permit the Company to directly issue new Shares for
delivery upon conversion of the Bonds. An increase in the Companys paid-in capital within the amount of the
Companys authorized capital would require (i) the approval of the board of directors of the Company, (ii) the
approval of the ROC FSC and (iii) the registration of such increase with the Science Park Administration (the
SPA). To increase the Companys authorized capitalization, the Company is required to amend its Articles of
Incorporation, which would require (i) the approval of the board of directors of the Company, (ii) the approval
of the shareholders of the Company, and (iii) the reporting to and recordation of such amendment with the SPA.
16

The Indenture provides, in summary, that the term Shares means, when used to refer to the class or
classes of the Companys capital stock and when used in certain other instances, only the Companys common
shares of NT$10 par value per share, but that when used elsewhere, including in Condition 6(C), the term also
includes shares of any other class or classes of the share capital of the Company authorized after May 18, 2015
(the Closing Date), which have no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation or winding-up of the Company.
(A) Conversion Right
(i)

Conversion Period: At any time during the Conversion Period referred to below on and subject to the
terms set forth herein (the Conversion Right), each Bondholder has the right hereunder to convert
its Bonds into Shares.
Subject to and upon compliance with the provisions of this Condition 6, the Conversion Right attaching
to any Bond may be exercised, at the option of the Bondholder and as and to the extent provided
herein, at any time on or after June 28, 2015, which is 41st calendar day after the Closing Date, up to
and including the close of business (at the place where such Bond is deposited for conversion) on
May 8, 2020, which is the 10th calendar day prior to the Maturity Date (or if such day shall not be a
business day at such place, on the immediately preceding business day at such place, but in no event
thereafter), or, if such Bond shall have been called for redemption prior to May 8, 2020, which is the
10th calendar day prior to the Maturity Date, then up to and including the close of business (at the place
aforesaid) on the seventh business day prior to the date fixed for redemption thereof (or if such day
shall not be a business day at such place, on the immediately preceding business day at such place) (the
Conversion Period); provided, however, that the Conversion Right during any Closed Period (as
defined below) shall be suspended and the Conversion Period shall not include any such Closed Period.

Closed Periods or a Closed Period include the following:

(a) any period beginning on the fifteenth (15th) Trading Day prior to the period during which the Company
has to close its stock transfer books for distribution of shares dividends, cash dividends or for
subscription of new shares in a capital increase for cash and ending on the record date for the
distribution of the relevant dividends, rights and benefits;
(b) any period beginning on (x) the sixtieth (60th) day before a general shareholders meeting of the
Company, (y) the thirtieth (30th) day before a special shareholders meeting of the Company and (z) the
fifth (5th) day before the record date of the Company for determination of shareholders entitled to
receive dividends, bonuses or other benefits, and ending on such meeting date or record date;
(c) the period beginning on the record date of capital decrease of the Company and ending on the
preceding day immediately prior to the trading of shares reissued after the capital decrease; and
(d) any other periods stipulated by the ROC laws and regulations or rules of the TWSE applicable from
time to time during which the Conversion Right is suspended, the Company cannot issue new Shares or
the Company shall close its stock transfer books.
For the purposes of this Condition 6,
business day means a day other than Saturday or Sunday on which banks are open for business in New
York, London, Hong Kong or the city in which (1) the specified office of the Registrar, if a Certificate is
deposited in connection with a transfer, is located, (2) the relevant Transfer Agent, Conversion Agent or
Paying Agent, if a Certificate is deposited, in connection with a transfer, or a notice of conversion is
deposited in connection with a conversion, is located, or (3) the Company and the ROC share registry of the
Company, if a notice of conversion is deposited in connection with a conversion or for the purpose of
calculating the Closed Period, is located.
17

The Company shall procure that the Bondholders are given at least seven days prior notice of any Closed
Period in accordance with Condition 15.
Under current ROC law, regulations and policy, except under very limited circumstances, PRC persons are
not permitted to hold the Shares or to register as shareholders of the Company. Under the Regulations
Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors promulgated
by the ROC Executive Yuan on April 30, 2009 and amended on October 6, 2010, only qualified domestic
institutional investors, or QDIIs, and limited persons who meet the qualification requirements set forth
therein (the Qualified PRC Investor(s)) are permitted to own certain securities of ROC listed companies;
provided that their shareholdings and the industries in which they are allowed to invest are subject to
certain restrictions as set forth in the abovementioned regulations and the applicable rulings and that such
Qualified PRC Investors accumulated investment shall apply for a separate approval if the investment,
individually or in aggregate, amounts to or exceeds 10 percent of the shares of a ROC listed company.
(ii) Number of Shares Delivered on Conversion: The number of Shares to be delivered upon conversion of
any Bond will be determined by the Company by dividing the NTD Equivalent of the principal amount
of the Bonds by the Conversion Price per Share on the Conversion Date (as defined below). On
conversion, the right of the converting Bondholder to repayment of the principal and other amounts of
the Bond to be converted shall be extinguished and released, and in consideration and in exchange
therefor the Company shall deliver the Shares. If more than one Bond is deposited for conversion at
any one time by the same Bondholder, the number of Shares to be delivered upon conversion thereof
will be calculated on the basis of the aggregate principal amount of the Bonds so deposited.
(iii) Fractions of Shares: Fractions of Shares will not be delivered on conversion, and cash adjustments will
not be made in respect thereof by the Company, or any Paying Agent, Transfer Agent, Conversion
Agent or the Trustee.
(iv) Conversion Price: The price used by the Company in determining the number of Shares to be delivered
upon conversion (the Conversion Price) will initially be NT$17.50 per Share. The Conversion Price
will be subject to adjustment in the manner provided in Condition 6(C).
(v) Revival on Default: Notwithstanding the provisions of Condition 6(A)(i), if the Company defaults in
making payment in full in respect of any Bond that has been called for redemption prior to May 18,
2020 on the date fixed for redemption thereof, the Conversion Right attaching to such Bond will
continue to be exercisable up to, and including, the close of business (at the place where the Certificate
evidencing such Bond is deposited for conversion) on the date upon which the full amount of the
monies payable in respect of such Bond has been duly received by the Trustee and the Principal Paying
Agent and notice of such receipt has been duly given to the Bondholders.
(B) Conversion Procedure
(i)

Conversion Notice: To exercise the Conversion Right attaching to any Bond, a Bondholder must
complete, execute and deposit at his own expense between 9:00 a.m. and 3:00 p.m. (local time at the
specified office referred to below) on any business day during the Conversion Period at the specified
office of any Conversion Agent outside the ROC at which the Bond is presented for conversion a
notice of conversion (a Conversion Notice) in duplicate, duly completed and signed, in the then
current form obtainable from the specified office of any Conversion Agent or Paying Agent that
maintains an office in Singapore, together with the relevant Bond and any certificates and other
documents as may be required under the law of the ROC or the jurisdiction in which such Conversion
Agent shall be located.
A Conversion Notice once deposited may not be withdrawn without the consent in writing of the
Company. Bondholders who deposit a Conversion Notice during a Closed Period will not be permitted
to convert their Bonds until the business day following the last day of that Closed Period which (if all
other conditions to conversion have been fulfilled) will be deemed as the Conversion Date (as defined
18

below) for such Bonds. The converting Bondholder will not be registered as a shareholder of the
Company until the Conversion Date, and the converting Bondholder shall retain the rights of a
Bondholder with respect to the Bonds until the Conversion Date. The price at which such Bonds will be
converted will be the Conversion Price or the Last Adjusted Conversion Price, as the case may be, on
the Conversion Date.
No Shares or beneficial interests therein will be delivered to a converting Bondholder unless such
Holder satisfies the foregoing conditions. If such Bondholder is unable or otherwise fails to satisfy the
foregoing conditions, such Bondholder may transfer its Bond or beneficial interest therein subject to
compliance with the transfer restrictions set forth in the Agency Agreement. See Transfer
Restrictions.
(ii) Taxes and Expenses; Deposit Date and Conversion Date: As conditions precedent to conversion, a
Bondholder must pay to the relevant Conversion Agent all stamp, issue, registration and similar taxes
and duties (if any) arising on conversion in the jurisdiction in which the Bond is deposited for
conversion, or payable in any jurisdiction consequent upon the delivery of Shares or any other property
or cash upon conversion to, or to the order of a person other than, the converting Bondholder. Except as
aforesaid, the Company will pay the expenses arising in the ROC on the issuance of Shares on
conversion of Bonds and all charges of the Conversion Agents in connection therewith as provided in
the Agency Agreement; provided that converting Bondholders shall complete the relevant ROC
investment registration with the TWSE and satisfy any other legal requirements for their receiving and
holding of the Shares at their own expenses.
The date on which any Bond and the Conversion Notice (in duplicate) relating thereto are deposited
with a Conversion Agent and the payments, if any, required to be paid by the Bondholder are made is
hereinafter referred to as the Deposit Date. The Conversion Date applicable to a Bond means the
day next following the Deposit Date, which day both is a Trading Day (as hereinafter defined in
Condition 6(C)) and falls during the Conversion Period.
(iii) Holders of Record: With effect from the opening of business in the ROC on the Conversion Date, the
Company will deem the converting Bondholder to have become the holder of record of the number of
Shares to be delivered upon such conversion (disregarding any retroactive adjustment of the
Conversion Price referred to below prior to the time such retroactive adjustment shall have become
effective) and at such time, subject to Condition 6(B)(iv) (Issuance and Delivery of Shares), the rights
of such converting Bondholder as a Bondholder with respect to the Bonds deposited for conversion
shall cease (except rights arising under Condition 6(B)(v) (Retroactive Adjustment of Conversion
Price)).
(iv) Issuance and Delivery of Shares: On the Conversion Date, the Company will register the converting
Bondholder (or its nominee) in the Companys register of shareholders as the owner of the number of
Shares to be delivered pursuant to Condition 6(B)(iii) (Holders of Record) upon conversion of such
Bonds and, subject to any applicable limitations then imposed by ROC laws and regulations, according
to the request made in the relevant Conversion Notice, procure that, as soon as practicable, and in any
event within five business days (and if the fifth business day is not a Trading Day, by close of business
on the next succeeding Trading Day) after the Conversion Date, issue and deliver to the local agent
appointed by the converting Bondholder through book-entry system maintained by the Taiwan
Depositary and Clearing Corporation (TDCC) for the relevant Shares, registered in the name
specified for that purpose in the relevant Conversion Notice, together with any other property or cash
required to be delivered upon conversion and such assignments or other documents (if any) as may be
required by law to effect the delivery thereof; provided however that, if the converting Bondholder
does not open a qualified account with TDCC, the Company will deliver the relevant Shares to such
converting Bondholder through book-entry system of TDCC only after such account is opened.
(v) Retroactive Adjustment of Conversion Price: If (a) the Conversion Date in relation to any Bond shall
be on or after a date with effect from which an adjustment to the Conversion Price takes retroactive
19

effect pursuant to Condition 6(C) and the provisions of the Indenture and (b) the relevant Conversion
Date falls on a date when the relevant adjustment has not been reflected in the Conversion Price, the
Company shall, within 20 days after the effective date of such adjustment of the Conversion Price,
transfer and deliver such number of Shares to the converting Bondholder as is equal to the excess of the
number of Shares that would have been required to be delivered on conversion of such Bond if the
relevant retroactive adjustment had been made as at the said Conversion Date over the number of
Shares previously transferred pursuant to such conversion, and in such event and in respect of such
number of Shares referenced in Condition 6(B)(iv) (Issuance and Delivery of Shares) to the Conversion
Date shall be deemed to refer to the date upon which such retroactive adjustment becomes effective
(disregarding the fact that it becomes effective retroactively).
(vi) Dividends and Other Entitlements: Each Bondholder will not have any right to receive or be paid any
dividends declared on the Shares unless such Bondholder has exercised the Conversion Right in
accordance with the procedures set forth in Conditions 6(B)(i) (Conversion Notice) and 6(B)(ii) (Taxes
and Expenses; Deposit Date and Conversion Date). A converting Bondholders right to receive
dividends declared on the Shares will begin on the Conversion Date. The Shares issued and delivered
on conversion of the Bonds will in all respects rank pari passu with the Shares outstanding on the date
on the relevant Conversion Date (except for any right or distribution the record date for which falls on
or precedes such Conversion Date and except for any other right excluded by mandatory provisions of
applicable law).
(vii) Conversion Agents: The Company reserves the right, subject to the provisions of the Agency
Agreement, at any time to vary or terminate the appointment of any Conversion Agent and to appoint
further or other Conversion Agents. Notice of any such termination or appointment and of any changes
in the specified offices of the Conversion Agents will be given promptly by the Company to the
Bondholders in accordance with Condition 15.
(C) Adjustments to Conversion Price
(i)

The Conversion Price shall be subject to adjustment as follows:

(a) Declaration of dividend in Shares or free distribution or bonus issue of Shares:
(i) If the Company shall declare a dividend in Shares or make a free distribution or bonus issue of
Shares which is treated as a capitalization issue for accounting purposes (including but not limited to
capitalization of capital reserves) then the Conversion Price in effect on the date when such dividend
and/or distribution is declared (or, if the Company has fixed a prior record date for the determination of
shareholders entitled to receive such dividend and/or distribution, on such record date) shall be
adjusted in accordance with the following formula:
NCP = OCP x [N/(N + n)]
where:
NCP = the Conversion Price after such adjustment.
OCP = the Conversion Price before such adjustment.
N = the number of Shares outstanding (having regard in this case and in each subsection
mentioned below to subsection (m) below) at the time of distribution of such dividend, free
distribution and/or bonus issue.
n = the number of Shares to be distributed to the shareholders as a dividend, free distribution
and/or bonus issue.
(ii) An adjustment made pursuant to this subsection (a) shall become effective on the record date
for determination of shareholders entitled to receive such dividend and/or distribution; provided that in
the case of a dividend in Shares or capitalization of reserves which must, under applicable law of the
20

ROC, be submitted for approval to a general meeting of shareholders of the Company before being
legally paid or made, and which is so approved after the record date fixed for the determination of
shareholders entitled to receive such dividend and/or distribution, such adjustment shall, immediately
upon such approval being given by such meeting, become effective retroactively to immediately after
such record date.
(b) Sub-division, Consolidation, Paid-in Capital Reduction and Reclassification of Shares
(i) If the Company shall (1) sub-divide its outstanding Shares, (2) consolidate its outstanding
Shares into a smaller number of Shares, (3) reduce its paid-in capital (other than due to the cancellation
of its treasury shares), or (4) re-classify any of its Shares into other securities of the Company, then the
Conversion Price shall be appropriately adjusted so that the holder of any Bond on the Conversion Date
which occurs after the coming into effect of the adjustment described in this clause (i) shall be entitled
to receive the number of Shares and/or other securities of the Company which it would have held or
have been entitled to receive after the happening of any of the events described above had such Bond
been converted immediately prior to the happening of such event (or, if the Company has fixed a prior
record date for the determination of shareholders entitled to receive any such securities issued upon any
such sub-division, consolidation or re-classification, immediately prior to such record date), but
without prejudice to the effect of any other adjustment to the Conversion Price made with effect from
the date of the happening of such event (or such record date) or any time thereafter.
(ii) An adjustment made pursuant to clause (i) above shall become effective immediately on the
relevant event referred to above becoming effective or, if a record date is fixed therefor, immediately
after such record date.
(c) Concurrent Adjustment Events
If the Company shall declare a dividend in, or make a free distribution or bonus issue of, Shares which
dividend, issue or distribution is to be paid or made to shareholders as of a record date which is also:
(i) the record date for the issue of any rights or warrants which requires an adjustment of the
Conversion Price pursuant to subsection (d), (e) or (f) below;
(ii) the day immediately before the date of issue of any securities convertible into or exchangeable
for Shares which requires an adjustment of the Conversion Price pursuant to subsection (h) below:
(iii) the day immediately before the date of issue of any Shares which requires an adjustment of
the Conversion Price pursuant to subsection (i) below;
(iv) the day immediately before the date of issue of any rights, options or warrants which requires
an adjustment of the Conversion Price pursuant to subsection (j) below; or
(v) determined by the Company to be the relevant date for an event or circumstance which
requires an adjustment to the Conversion Price pursuant to subsection (k) below,
then no adjustment of the Conversion Price in respect of such dividend, bonus issue or free distribution shall
be made under subsection (a), but in lieu thereof an adjustment shall be made under subsection (d), (e), (f),
(h), (i) or (j) below (as the case may require) by including in the denominator of the fraction described
therein the aggregate number of Shares to be issued pursuant to such dividend, bonus issue or free
distribution and, in the case of such dividend, including in the numerator of the fraction described therein
the number of Shares which the aggregate par value of Shares to be so distributed would purchase at the
Current Market Price per Share.
(d) Rights Issues to Shareholders
(i) If the Company shall grant, issue or offer to the holders of Shares rights entitling them to
subscribe for or purchase Shares (a Rights Issue, which term shall exclude any Shares granted,
21

issued or offered to directors, officers or employees of the Company pursuant to any stock based
compensation arrangement) at a consideration per Share receivable by the Company (determined as
provided in subsection (m) below) which is fixed:
(1) on or prior to the record date mentioned below and is less than the Current Market Price
per Share on such record date; or
(2) after the record date mentioned below and is less than the Current Market Price per share
on the date the Company fixes the said consideration,
then the Conversion Price in effect (in a case within (1) above) on the record date for the
determination of shareholders entitled to receive such rights or (in a case within (2) above) on the
date the Company fixes the said consideration shall be adjusted in accordance with the following
formula:
NCP = OCP x [(N+v)/(N+n)]
where:
NCP and OCP have the meanings ascribed thereto in subsection (a) above (which may be further
adjusted pursuant to the provisions of subsection (b) above).
N = the number of Shares outstanding (having regard to subsection (n) below) at the close of
business in the ROC (in a case within (1) above) on such record date or (in a case within
(2) above) on the date the Company fixes the said consideration.
n = the number of Shares to be issued in connection with such Rights Issue at the said
consideration.
v = the number of Shares which the aggregate consideration receivable by the Company would
purchase at such Current Market Price per Share specified in (1) or, as the case may be, (2) above.
(ii) Subject as provided below, such adjustment shall become effective immediately after the date
the consideration for such Shares are received in full or (if later) immediately after the Company fixes
the said consideration but retroactively to immediately after the record date mentioned above.
(e) Warrants and Options Issued to Shareholders.
(i) If the Company shall grant, issue or offer to the holders of Shares warrants or options entitling
them to subscribe for or purchase Shares at a consideration per Share receivable by the Company
(determined as provided in subsection (m) below) which is fixed:
(1) on or prior to the record date for the determination of shareholders entitled to receive such
warrants or options and is less than the Current Market Price per Share on such record date; or
(2) after the record date mentioned above and is less than the Current Market Price per Share
on the date the Company fixes the said consideration,
then the Conversion Price in effect shall be adjusted in accordance with the following formula:
NCP = OCP x [(N+v)/(N+n)]
where:
NCP and OCP have the meanings ascribed thereto in subsection (a) above (which may be further
adjusted pursuant to the provisions of subsection (b) above).
N = the number of Shares outstanding (having regard to subsection (n) below) at the close of
business in the ROC (in a case within (1) above) on such record date or (in a case within
(2) above) on the date the Company fixes the said consideration.
22

n = the number of Shares initially to be issued upon exercise of such warrants or options at the
said consideration where no applications by shareholders entitled to such warrants or options are
required. Where applications by shareholders entitled to such warrants or options are required,
n=the number of such Shares that equals (A) the number of warrants or options which
underwriters have agreed to underwrite as referred to below or, as the case may be, (B) the
number of warrants or options for which applications are received from shareholders as referred to
below save to the extent already adjusted for under (A).
v = the number of Shares which the aggregate consideration receivable by the Company
(determined as provided in subsection (m) below) would purchase at such Current Market Price
per Share specified in (1) or, as the case may be, (2) above.
(ii) Subject as provided below, such adjustment shall become effective (1) where no applications
for such warrants or options are required from shareholders entitled to the same, upon their issue and
(2) where applications by shareholders entitled to the same are required as aforesaid, immediately after
the latest date for the submission of such applications or (if later) immediately after the Company fixes
the said consideration, but in all cases retroactively to immediately after the record date mentioned
above.
(iii) If, in connection with a grant, issue or offer to the holders of Shares of warrants or options
entitling them to subscribe for or purchase Shares where applications by shareholders entitled to the
same are required, any warrants or options which are not subscribed for or purchased by the
shareholders entitled thereto are agreed to be underwritten by others prior to the latest date for the
submission of applications for such warrants or options, an adjustment shall be made to the Conversion
Price in accordance with the above provisions which shall become effective immediately after the date
the underwriters agree to underwrite the same or (if later) immediately after the Company fixes the said
consideration but retroactively to immediately after the record date mentioned above. If, in connection
with a grant, issue or offer to the holders of Shares of warrants or options entitling them to subscribe
for or purchase Shares where applications by shareholders entitled to the same are required, any
warrants or options which are not subscribed for or purchased by the underwriters who have agreed to
underwrite as referred to above or by the shareholders entitled thereto (or persons to whom
shareholders have transferred the right to purchase such warrants) who have submitted applications for
such warrants as referred to above are offered to and/or subscribed by others, no further adjustment
shall be made to the Conversion Price by reason of such offer and/or subscription.
(iv) The adjustments in this subsection (e) shall not apply to any warrants or options issued,
transferred, offered, exercised, allotted, appropriated, modified or granted to, or for the benefit of, any
officer, director or employee of the Company pursuant to any stock based compensation arrangement.
(f)

Issues of Rights or Warrants for Equity-Related Securities to Shareholders.

(i) If the Company shall grant, issue or offer to the holders of Shares options, rights or warrants
entitling them to subscribe for or purchase any securities convertible into or exchangeable for Shares or
which carry rights to subscribe for or purchase Shares at a consideration per Share receivable by the
Company (determined as provided in subsection (m) below) which is fixed:
(1) on or prior to the record date mentioned below and is less than the Current Market Price
per Share at such record date; or
(2) after the record date mentioned below and is less than the Current Market Price per Share
on the date the Company fixes the said consideration,
then the Conversion Price in effect (in a case within (1) above) on the record date for the determination
of shareholders entitled to receive such rights or warrants or (in a case within (2) above) shall be
adjusted in accordance with the following formula:
NCP = OCP x [(N+v)/(N+n)]
23

where:
NCP and OCP have the meanings ascribed thereto in subsection (a) above (which may be further
adjusted pursuant to the provisions of subsection (b) above).
N = the number of Shares outstanding (having regard to subsection (n) below) at the close of
business in the ROC (in a case within (1) above) on such record date or (in a case within
(2) above) on the date the Company fixes the said consideration.
n = the number of Shares initially to be issued upon exercise of such rights or warrants and
conversion or exchange of such convertible or exchangeable securities at the said consideration
which, in the case of rights, equals (A) the number of Shares initially to be issued upon conversion
or exchange of the number of such convertible or exchangeable securities which the underwriters
have agreed to underwrite as referred to below or, as the case may be, (B) the number of Shares
initially to be issued upon conversion or exchange of the number of such convertible or
exchangeable securities for which applications are received from shareholders as referred to below
save to the extent already adjusted for under (A), and which, in the case of warrants where no
applications by shareholders entitled to such warrants are required, equals such number of Shares
initially to be issued upon such exercise and conversion or exchange. Where applications by
shareholders entitled to such warrants are required, n=the number of such Shares that equals
(x) the number of warrants which underwriters have agreed to underwrite as referred to below or,
as the case may be, (y) the number of warrants for which applications are received from
shareholders as referred to below save to the extent already adjusted for under (x).
v = the number of Shares which the aggregate consideration receivable by the Company
(determined as provided in subsection (m) below) would purchase at such Current Market Price
per Share specified in (1) or, as the case may be, (2) above.
(ii) Subject as provided below, such adjustment shall become effective (1) where no applications
for such warrants are required from shareholders entitled to the same, upon their issue and (2) in the
case of rights and where applications by shareholders entitled to the warrants are required as aforesaid,
immediately after the latest date for the submission of applications or (if later) immediately after the
Company fixes the said consideration, but in all cases retroactively to immediately after the record date
mentioned above.
(iii) If, in connection with a grant, issue or offer to the holders of Shares of rights or of warrants
entitling them to subscribe for or purchase securities convertible into or exchangeable for Shares where
applications by shareholders entitled to the same are required, any convertible or exchangeable
securities or warrants which are not subscribed for or purchased by the shareholders entitled thereto are
agreed to be underwritten by others prior to the latest date for the submission of applications for such
convertible or exchangeable securities or warrants, an adjustment shall be made to the Conversion
Price in accordance with the above provisions which shall become effective immediately after the date
the underwriters agree to underwrite the same or (if later) immediately after the Company fixes the said
consideration but retroactively to immediately after the record date mentioned above. If, in connection
with a grant, issue or offer to the holders of Shares of rights or of warrants entitling them to subscribe
for or purchase securities convertible into or exchangeable for Shares where applications by
shareholders entitled to the same are required, any convertible or exchangeable securities or warrants
which are not subscribed for or purchased by the underwriters who have agreed to underwrite as
referred to above or by the shareholders entitled thereto (or persons to whom shareholders have
transferred such rights or the right to purchase such warrants) who have submitted applications for such
convertible or exchangeable securities or warrants as referred to above are offered to and/or subscribed
by others, no further adjustment shall be made to the Conversion Price by reason of such offer and/or
subscription.

24

(iv) The adjustments in this subsection (f) shall not apply to any options, rights or warrants issued,
transferred, offered, exercised, allotted, appropriated, modified or granted to, or for the benefit of, any
officer, director or employee of the Company pursuant to any stock based compensation arrangement.
(g) Capital Distribution, Other Distributions to Shareholders.
(i) If the Company shall make any Capital Distribution or the distribution to the holders of Shares
of evidences of indebtedness of the Company or of shares of capital stock of the Company (other than
Shares) or of assets (other than interim and annual dividends in cash not constituting a Capital
Distribution) or of options, rights or warrants to subscribe for or purchase shares (other than Shares) or
securities (other than those mentioned in (d), (e) or (f) above):
NCP = OCP x [(CMP-fmv)/CMP]
where:
NCP and OCP have the meanings ascribed thereto in subsection (a) above (which may be further
adjusted pursuant to the provisions of subsection (b) above).
CMP = the Current Market Price per Share on the record date for the determination of
shareholders entitled to receive such distribution.
fmv = the amount of such distribution or the fair market value (as determined by the Company and
notified to the Trustee in writing or, if pursuant to applicable law of the ROC such determination
is to be made by application to a court of competent jurisdiction, as determined by such court or
by an appraiser appointed by such court) of the portion of the evidences of indebtedness, shares of
capital stock, assets, rights or warrants so distributed applicable to one Share, less any
consideration payable for the same by the relevant Shareholder. In making a determination of the
fair market value of any such evidences of indebtedness, shares of capital stock, assets, rights or
warrants, the Company shall consult a leading independent securities company or bank in Taipei
selected by the Company and shall take fully into account the advice received from such company
or bank.
(ii) Such adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such Capital Distribution or distribution, provided that
(1) in the case of such a Capital Distribution or distribution which must, under applicable law of the
ROC, be submitted for approval to a general meeting of shareholders of the Company before such
Capital Distribution or distribution may legally be made and is so approved after the record date fixed
for the determination of shareholders entitled to receive such Capital Distribution or distribution, such
adjustment shall, immediately upon such approval being given by such meeting, become effective
retroactively to immediately after such record date and (2) if the fair market value of the evidences of
indebtedness, shares of capital stock, assets, rights or warrants so distributed cannot be determined
until after the record date fixed for the determination of shareholders entitled to receive such
distribution, such adjustment shall, immediately upon such fair market value being determined, become
effective retroactively to immediately after such record date.
(iii) Notwithstanding anything provided herein to the contrary, no adjustment to the Conversion
Price shall be made if the Company reduces its share capital by purchasing and canceling its shares.
(h) Issue of Convertible or Exchangeable Securities Generally.
(i) If the Company shall issue any securities convertible into or exchangeable for Shares (other
than the Bonds, or in any of the circumstances described in subsection (f) above and the consideration
per Share receivable by the Company (determined as provided in subsection (m) below) either through
a public offering or a private placement shall be less than the Current Market Price per Share on the
date in the ROC on which the Company fixes the said consideration (or, if the issue of such securities
25

is subject to approval by a general meeting of shareholders, on the date on which the Board of
Directors of the Company fixes the consideration to be recommended at such meeting), then the
Conversion Price in effect immediately prior to the date of issue of such convertible or exchangeable
securities shall be adjusted in accordance with the following formula:
NCP = OCP x [(N+v)/(N+n)]
where:
NCP and OCP have the meanings ascribed thereto in subsection (a) above (which may be further
adjusted pursuant to the provisions of subsection (b) above).
N = the number of Shares outstanding (having regard to subsection (n) below) at the close of
business in the ROC on the day immediately prior to the date of such issue.
n = the number of Shares initially to be issued upon conversion or exchange of such convertible or
exchangeable securities at the initial conversion or exchange price or rate.
v = the number of Shares which the aggregate consideration receivable by the Company
(determined as provided in subsection (m) below) would purchase at such Current Market Price
per Share.
(ii) Such adjustment shall become effective as of the calendar day in the ROC corresponding to
the calendar day at the place of issue on which such convertible or exchangeable securities are issued.
(1) The adjustments in this subsection (h) shall not apply to any securities convertible or
exchangeable for Shares issued, transferred, offered, exercised, allotted, appropriated, modified or
granted to, or for the benefit of, any officer, director or employee of the Company pursuant to any stock
based compensation arrangement.
(i)

Other Issues of Shares.

(i) If the Company shall issue any Shares (other than Shares issued upon conversion or exchange
of any convertible or exchangeable securities (including the Bonds) issued by the Company or upon
exercise of any rights or warrants granted, offered or issued by the Company or in any of the
circumstances described in subsection (a), (b) or (c) above) for a consideration per Share receivable by
the Company (determined as provided in subsection (m) below) either through a public offering or a
private placement less than the Current Market Price per Share on the date on which the Company fixes
the said consideration (or, if the issue of such Shares is subject to approval by a general meeting of
shareholders, on the date on which the Board of Directors of the Company fixes the consideration to be
recommended at such meeting), then the Conversion Price in effect immediately prior to the issue of
such additional Shares shall be adjusted in accordance with the following formula:
NCP =OCP x [(N+v)/(N+n)]
where:
NCP and OCP have the meanings ascribed thereto in subsection (a) above (which may be further
adjusted pursuant to the provisions of subsection (b) above).
N = the number of Shares outstanding (having regard to subsection (n) below) at the close of
business in the ROC on the day immediately prior to the date of such issue.
n = the number of additional Shares issued as aforesaid.
v = the number of Shares which the aggregate consideration receivable by the Company
(determined as provided in subsection (m) below) would purchase at such Current Market Price
per Share.
(ii) Such adjustment shall become effective as of the calendar day in the ROC corresponding to
the calendar day at the place of issue on which such additional Shares are issued.
26

(iii) The adjustments in this subsection (i) shall not apply to any Shares issued, transferred,
offered, exercised, allotted, appropriated, modified or granted to, or for the benefit of, any officer,
director or employee of the Company pursuant to any stock based compensation arrangement.
(j)

Issue of Equity Related Securities.

(i) If the Company shall grant, issue or offer options, rights or warrants to subscribe for or
purchase Shares (other than in any of the circumstances described in subsections (d) and (e)) or
securities convertible into or exchangeable for Shares and the consideration per Share receivable by the
Company (determined as provided in subsection (m) below) shall be less than the Current Market Price
per Share on the date in the ROC on which the Company fixes the said consideration (or, if the offer,
grant or issue of such rights, options or warrants is subject to approval by a general meeting of
shareholders, on the date on which the Board of Directors of the Company fixes the consideration to be
recommended at such meeting), then the Conversion Price in effect immediately prior to the date of the
offer, grant or issue of such options, rights or warrants shall be adjusted in accordance with the
following formula:
NCP = OCP x[(N+v)/(N+n)]
where:
NCP and OCP have the meanings ascribed thereto in subsection (a) above (which may be further
adjusted pursuant to the provisions of subsection (b) above).
N = the number of Shares outstanding (having regard to subsection (n) below) at the close of
business in the ROC on the day immediately prior to the date of such issue.
n = the number of Shares initially to be issued on exercise of such options, rights or warrants and
(if applicable) conversion or exchange of such convertible or exchangeable securities.
v = the number of Shares which the aggregate consideration receivable by the Company
(determined as provided in subsection (m) below) would purchase at such Current Market Price
per Share.
(ii) Such adjustment shall become effective as of the calendar day in the ROC corresponding to
the calendar day at the place of issue on which such rights or warrants are issued.
(k) Analogous Events. If the Company determines that any other event or circumstance has occurred
which has or would have an effect on the position of the Bondholders as a class compared with the position
of the holders of all the securities (and options and rights relating thereto) of the Company, taken as a class
which is analogous to any of the events referred to in subsections (a) through (j), then, in any such case, the
Company shall notify the Trustee in writing thereof and the Company shall consult with a leading
independent securities company or commercial bank in Taipei selected by the Company as to what
adjustment, if any, should be made to the Conversion Price to preserve the value of the Conversion Right of
Bondholders and will make any such adjustment. Any such adjustment, where possible, shall be made using
methodology similar in nature to one or more of the adjustments described above in this Condition 6(C), and
may consist of a combination of such adjustments where appropriate.
(l)

Simultaneous Issues of Different Classes of Shares.

In the event of simultaneous issues of two or more classes of share capital comprising Shares or rights or
warrants in respect of, or securities convertible into or exchangeable for, two or more classes of share
capital comprising Shares, then, for the purposes of this Condition 6(C), the formula:
NCP = OCP x [(N+v)/(N+n)] shall be restated as NCP = OCP x
[(N+v1+v2+v3)/(N+n1+n2+n3)]
27

where v1 and n1 shall have the same meanings as v and n but by reference to one class of
Shares, v2 and n2 shall have the same meanings as v and n but by reference to a second class
of Shares, v3 and n3 shall have the same meanings as v and n but by reference to a third class
of Shares and so on.
(m) Consideration Receivable by the Company. For the purposes of any calculation of the
consideration receivable by the Company pursuant to this Condition 6(C), the following provisions shall be
applicable:
(i) in the case of the issue of Shares for cash, the consideration shall be the amount of such cash,
provided that in no such case shall any deduction be made for any commissions or any expenses paid
or incurred by the Company for any underwriting of the issue or otherwise in connection therewith;
(ii) in the case of the issue of Shares for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair value thereof as determined by the
Company (and in making such determination the Company shall consult a leading independent
securities company or bank in Taipei selected by the Company and shall take fully into account the
advice received from such company or bank) or, if pursuant to applicable law of the ROC such
determination is to be made by application to a court of competent jurisdiction, as determined by such
court or an appraiser appointed by such court, irrespective of the accounting treatment thereof;
(iii) in the case of the issue (whether initially or upon the exercise of rights or warrants) of
securities convertible into or exchangeable for Shares, the aggregate consideration receivable by the
Company shall be deemed to be the consideration received by the Company for such securities and (if
applicable) rights or warrants plus the additional consideration (if any) to be received by the Company
upon (and assuming) the conversion or exchange of such securities at the initial conversion or
exchange price or rate and (if applicable) the exercise of such rights or warrants at the initial
subscription or purchase price (the consideration in each case to be determined in the same manner as
provided in paragraphs (i) and (ii) above) and the consideration per Share receivable by the Company
shall be such aggregate consideration divided by the number of Shares to be issued upon (and
assuming) such conversion or exchange at the initial conversion or exchange price or rate and (if
applicable) the exercise of such rights or warrants at the initial subscription or purchase price;
(iv) in the case of the issue of rights or warrants to subscribe for or purchase Shares, the aggregate
consideration receivable by the Company shall be deemed to be the consideration received by the
Company for any such rights or warrants plus the additional consideration to be received by the
Company upon (and assuming) the exercise of such rights or warrants at the initial subscription or
purchase price (the consideration in each case to be determined in the same manner as provided in
paragraphs (i) and (ii) above) and the consideration per Share receivable by the Company shall be such
aggregate consideration divided by the number of Shares to be issued upon (and assuming) the exercise
of such rights or warrants at the initial subscription or purchase price;
(v) if any of the consideration referred to in any of the preceding paragraphs of this subsection
(m) is receivable in a currency other than New Taiwan Dollars, such consideration shall, in any case
where there is a fixed rate of exchange between the New Taiwan Dollar and the relevant currency for
the purposes of the issue of the Shares, the conversion or exchange of such securities or the exercise of
such rights or warrants, be translated into New Taiwan Dollars for the purposes of this subsection
(m) at such fixed rate of exchange and shall, in all other cases, be translated into New Taiwan Dollars
at the mean of the exchange rate quotations (being quotations for the cross rate through U.S. Dollars if
no direct rate is quoted) by a leading bank in the ROC for buying and selling spot units of the relevant
currency by telegraphic transfer against New Taiwan Dollars on the date as of which the said
consideration is required to be calculated as aforesaid; and
(vi) in the case of the issue of Shares credited as fully paid out of retained earnings or
capitalization or reserves at their par value, the aggregate consideration receivable by the Company
28

shall be deemed to be zero (and accordingly the number of Shares which such aggregate consideration
receivable by the Company could purchase at the relevant Current Market Price per Share shall also be
deemed to be zero).
(n) Cumulative Adjustments. If, at the time of computing an adjustment (the later adjustment) of the
Conversion Price pursuant to any of subsections (d), (e) and (f) above, the Conversion Price already
incorporates an adjustment (the earlier adjustment) made (or taken or to be taken into account pursuant to
the proviso to subsection (o) below) to reflect an issue of Shares or of securities convertible into or
exchangeable for Shares or of rights or warrants to subscribe for or purchase Shares or securities, to the
extent that the number of such Shares or securities taken into account for the purposes of calculating the
earlier adjustment exceeds the number of such Shares in issue at the time relevant for ascertaining the
number of outstanding Shares for the purposes of computing the later adjustment, such excess Shares shall
be deemed to be outstanding for the purposes of making such computation.
(o) Minor Adjustments. No adjustment of the Conversion Price shall be required unless such adjustment
would require an increase or decrease in such price of at least 1% of the Conversion Price or the Last
Adjusted Conversion Price, as the case may be; provided that any adjustment which by reason of this
subsection (o) is not required to be made shall be carried forward and taken into account (as if such
adjustment had been made at the time when it would have been made but for the provisions of this
subsection (o)) in any subsequent adjustment.
(p) Reference to fix. Any reference herein to the date on which a consideration is fixed shall,
where the consideration is originally expressed by reference to a formula which cannot be expressed as an
actual cash amount until a later date, be construed as a reference to the first day on which such actual cash
amount can be ascertained.
(q) Fractions.
All fractions used in relation to the calculation of any adjustment of the Conversion Price set forth in
this Condition 6(C) shall not be rounded, except that the NCP (i.e., the Conversion Price after adjustment)
referred to in Condition 6(C)(i)(a)(i) above as applied to all Conversion Price adjustment formulae in this
Condition 6(C) shall be rounded to the nearest cent.
(ii) No adjustment will be made where such adjustment would be less than 1% of the Conversion Price or
the Last Adjusted Conversion Price (as defined below), as applicable; provided, however, that any
adjustment that otherwise would be required to be made will be carried forward and taken into account
in determining any subsequent adjustment. The Company will promptly notify the Bondholders, the
Trustee and the Conversion Agent in writing of any adjustment in accordance with Condition 15. Any
such notice relating to an adjustment in the Conversion Price should set forth the event giving rise to
the adjustment, the Conversion Price prior to the adjustment, the effective date of such adjustment and
the Conversion Price after the adjustment (the Last Adjusted Conversion Price).
For the purposes of the Conditions,
Capital Distribution means any cash dividend, distribution of cash or distribution of assets in specie
made by the Company for any fiscal year unless it comprises a purchase or redemption of share capital of the
Company;
Current Market Price on any date means (i) in the case of any issuance or distribution, the average of
the Market Prices for the five consecutive Trading Days immediately before the first date on which the Shares
trade in a regular way on the TWSE or such other applicable securities exchange or in any applicable securities
market without the right to receive such issuance or distribution; and (ii) in case of other events, the average of
the Market Prices for the five consecutive Trading Days immediately before such date, and when used with
respect to any issuance or distribution;
29

Market Price means for any Trading Day with respect to the Shares, the closing sales price of the Shares
on the TWSE on such day or, if no reported sales take place on such day, the average of the reported closing bid
and offered prices, in either case as reported by the TWSE for such day as furnished by a leading independent
securities firm in Taiwan selected from time to time by the Trustee for this purpose; and
Trading Day means with respect to the Shares, a day when the TWSE is open for business; provided,
however, if no transaction price or closing bid and offered prices are reported by the TWSE in respect of the
Shares for one or more Trading Days (or furnished by a reputable independent securities firm in Taiwan as
aforesaid), such day or days will be disregarded in any relevant calculation and will be deemed not to have
existed when ascertaining any period of consecutive Trading Days.
(D) Mergers; Disposals
So long as the Bonds remain outstanding, the Company will not merge, amalgamate or consolidate with or
into any other corporation or entity, (provided that the Company is not the surviving entity) or sell, convey,
transfer, lease or otherwise dispose of all, or substantially all, of the assets of the Company, whether as a single
transaction or a number of transactions, related or not, to any corporation, entity or person or to one or more
members of any group under the common control of any corporation, entity or person unless:
(i)

the Company shall have notified the Bondholders of such event in accordance with Condition 15; and

(ii) the Company, such corporation, entity or person shall have executed an indenture supplemental to the
Indenture in form and substance reasonably satisfactory to the Trustee providing that such corporation,
entity or person shall expressly assume the obligations of the Company under the Bonds, the Indenture
and the Agency Agreement and providing that each Bond then outstanding shall be exchangeable into
the class and amount of shares and other securities, cash and other property receivable upon such
consolidation, amalgamation, merger, sale or transfer by a holder of the number of Shares issuable
upon conversion of such Bonds (assuming for such purpose that the Bonds were convertible at the time
of such consolidation, amalgamation, merger, sale or transfer) immediately prior to such consolidation,
amalgamation, merger, sale or transfer (assuming such holder of Shares did not exercise his rights of
election, if any, as to the kind or amount of shares and other securities, cash and other property
receivable upon such consolidation, amalgamation, merger, sale or transfer; provided that, if the class
or amount of shares and other securities, cash and other property receivable upon such consolidation,
amalgamation, merger, sale or transfer is not the same for each Share in respect of which such rights of
election shall not have been exercised (Non-Electing Shares), then for the purposes of this
Condition, the kind and amount of shares and other securities, cash and other property receivable upon
such consolidation, amalgamation, merger, sale or transfer for each Non-Electing Share shall be
deemed to be the kind and amount so receivable per share by a plurality of the Non-Electing Shares) at
the Conversion Price, as adjusted from time to time pursuant to this Indenture. Such supplemental
indenture will provide for adjustments that will be as nearly equivalent as may be practicable to the
adjustments provided for in the foregoing provisions to this Condition. The provisions of this Condition
6(D) will apply the same way to any subsequent consolidations, amalgamations, mergers, sales or
transfers.
(E) Conversion Undertakings
(i)

The Company will use its best efforts to ensure that all Closed Periods during any 365-day period shall
not be in the aggregate more than 120 calendar days, having taken into account the applicable ROC
laws and regulations. However, the Company cannot provide any assurance that all Closed Periods
during any 365-day period will not be more than 120 calendar days.

(ii) The Company undertakes to procure sufficient Shares for transfer and delivery to the converting
Bondholder (or its nominee) upon conversion of the Bonds, by way of increasing the Companys paidin share capital and, if necessary, its authorized capitalization for the issuance of new Shares, if
30

approval of the ROC FSC is obtained and future changes to ROC laws and regulations permit the
Company to issue new Shares for delivery upon conversion of the Bonds. The Company acknowledges
that the undertaking above may involve amending the Companys Articles of Incorporation, which
requires the approval of its board of directors and its shareholders, as well as reporting to and
recordation of such amendments with the SPA.
(F) Companys Undertaking
The Company will use its best efforts to obtain and maintain a listing on the TWSE for the Shares to be
issued upon the conversion of the Bonds. The Company agrees to give notice to the Trustee and Bondholders in
accordance with Condition 15 of the listing or delisting of such Shares by the TWSE.
7.

Payments

(A) US Dollar Settlement

All amounts due under, and all claims arising out of or pursuant to, the Bonds and/or the Indenture or the
Agency Agreement from or against the Company shall be payable and settled in US Dollars only.
For the purposes of the Conditions,
Business Day means a day (other than a Saturday or Sunday) on which commercial banks are open for
general business (including dealings in foreign exchange) in the ROC, New York, Hong Kong and London.
Fixed Exchange Rate means the fixed rate of US$1.00=NT$30.7080.
Independent Investment Bank means (i) an independent investment bank of international repute or
(ii) leading independent securities company or bank in the ROC (in each case of (i) and (ii), acting as an expert)
selected by the Company following consultation with the Trustee.
NT Dollars or NT$ means the lawful currency for the time being of the ROC.
NTD Equivalent means in respect of any US Dollar-denominated amount in respect of the Bonds, such
US Dollar amount converted into NT Dollar amount using the Fixed Exchange Rate.
Prevailing Rate, for each Rate Calculation Date, means a rate determined by the Company in good faith
as follows:
(a) the fixing rate at 11:00 a.m., expressed as the number of NT Dollars per one US Dollar, quoted by
Taipei Forex Inc.;
(b) if no such rate is available under sub-paragraph (a), the prevailing rate determined by the
Company in good faith on the basis of quotations provided by the Reference Dealers of the
specified exchange rate for the Rate Calculation Date as obtained in accordance with the
provisions below; and
(c) if fewer than two quotations are provided under sub-paragraph (b), the exchange rate for the Rate
Calculation Date as shall be determined by an Independent Investment Bank in good faith.
In determining the prevailing rate under sub-paragraph (b), the Company will request the Taipei office of
each of the Reference Dealers to provide a quotation of what the specified screen rate would have been had it
been published, reported or available for the Rate Calculation Date, based upon each Reference Dealers
experience in the foreign exchange market for NTD and general activity in such market on the Rate Calculation
Date. The quotations used to determine the Prevailing Rate for a Rate Calculation Date will be determined in
each case for such Rate Calculation Date, and will be requested at 3:30 p.m. (Taipei time) on such Rate
Calculation Date or as soon as practicable after it is determined that the specified screen rate was not available.
31

If four quotations are provided, the rate for a Rate Calculation Date will be the arithmetic mean of the rates,
without regard to the rates having the highest and lowest value. For this purpose, if more than one quotation has
the same highest value or lowest value, then the rate of only one of such quotations shall be disregarded. If two or
three quotations are provided, the rate for a Rate Calculation Date will be the arithmetic mean of the rates
provided.
As soon as practicable after the Prevailing Rate has been determined, the Company will notify the Principal
Agent by email or facsimile of the Prevailing Rate and the applicable Settlement Amount on the Rate Calculation
Date.
All notifications, opinions, determinations, certificates, calculations, quotations and decisions given,
expressed, made or obtained for the purposes of the provisions of this Condition 7, whether by the Reference
Dealers (or any of them), the Company or the Independent Investment Bank, will (in the absence of fraud, willful
misconduct or gross negligence) be binding on the Issuer, the Trustee, the Agents and all Bondholders.
Rate Calculation Date means the day which is five Business Days before the due date of the relevant
amount under the Conditions; provided that for the purpose of determining the Market Price for the purpose of
Condition 8(B), the Rate Calculation Date in respect thereof shall be the relevant the Trading Day.
Reference Dealers means four leading dealers engaged in the foreign exchange market of the relevant
currency selected by the Principal Agent.
Settlement Equivalent for the relevant Rate Calculation Date in respect of any US Dollar-denominated
amount payable in respect of the Bonds, means such US Dollar amount converted into NT Dollar amount using
the Fixed Exchange Rate divided by the applicable Prevailing Rate on such date.
US Dollars or US$ means the lawful currency for the time being of the United States of America.
(B) Method of Payment
Payment of principal of and premium and other amounts on the Bonds will be in U.S. dollars and will be
made (i) with respect to a Holder of a Bond, by wire transfer of immediately available funds to the registered
account of the Holder of such Bond or (ii) in the case of a Holder of a Certificate where the Registrar has advised
that payments cannot be made via wire transfer, by U.S. dollar check mailed to the registered address of the
Bondholder. Payments of principal and premium and other amounts will only be made against surrender of the
relevant Certificate at the specified office of the Principal Paying Agent or any of the other Paying Agents.
(C) Fiscal Laws
All payments are subject in all cases to any applicable fiscal or other laws and regulations, but without
prejudice to the provisions of Condition 9. No commissions or expenses shall be charged to the Bondholders in
respect of such payments.
(D) Business Days
If the due date for payment of any amount of principal or premium or any other amount in respect of any
Bond (or any later date on which a Bond could otherwise be presented for payment) is not, in the relevant place
of presentation, a business day, the Holder of the relevant Bond shall not be entitled to payment at such place of
the amount due until the next following business day at such place and shall not be entitled to any interest or
other payment in respect of such delay. In this Condition 7(D), business day means any day on which banks
are open for business in the ROC and in the relevant place of presentation and, unless the following sentence
applies, in the case of payment by transfer to a U.S. dollar account as referred to above, on which dealings in
32

foreign currency may be carried on both in New York and in such place of presentation. If a Bond is presented
for payment at a time when, as a result of differences in time zones, it is not practicable to transfer the relevant
amount to an account as referred to above for value on the relevant date, the Company shall not be obliged to do
so but shall be obliged to transfer the relevant amount to the account for value on the first practicable date
thereafter.
(E) Paying Agents
The names of the initial Principal Paying Agent and the other initial Paying Agents and their specified
offices are set out in the Agency Agreement. The Company reserves the right at any time with the prior written
approval of the Trustee to vary or terminate the appointment of any Paying Agent and to appoint additional or
other Paying Agents, in each case in accordance with the Agency Agreement, provided that the Company will at
all times maintain a Principal Paying Agent, Conversion Agent and a Paying Agent having a specified office in
London. The Paying Agent may resign at any time by giving written notice to the Company and the Trustee not
less than 60 days in advance. Notice of any such termination or appointment and of any changes in the specified
offices of the Principal Paying Agent and the Paying Agents will be given promptly by the Company to the
Bondholders in accordance with Condition 15.
(F) Default Interest
If the Company fails to pay any sum in respect of the Bonds when due, default interest will accrue on the
overdue principal amount at the rate of 2% per annum from the due date and ending on the date the Trustee
determines to be the date on and after which the overdue payment is to be made to the Bondholders as stated in a
notice given to the Bondholders in accordance with Condition 15 (both dates inclusive). The default interest will
accrue on the basis of the actual number of days elapsed calculated on the basis of a year of 360 days consisting
of 12 months of 30 days each and the amount payable will be equal to the Settlement Equivalent of such default
interest amount.
8.

Redemption, Repurchase and Cancellation

(A) Final Redemption

Unless previously redeemed, repurchased and canceled or converted as herein provided, the Company will
redeem the Bonds at the Settlement Equivalent of 98.76% of their principal amount on May 18, 2020 (the
Maturity Date). The Company may not redeem the Bonds at its option prior to that date except as provided in
paragraph (B), (C), (E), (F) or (G) below (but without prejudice to Condition 10).
(B) Redemption at the Option of the Company
On or at any time after May 18, 2018 and on or prior to May 18, 2020, the Company may, having given not
less than 30 nor more than 60 days notice to the Bondholders (which notice will be irrevocable and given in
accordance with Condition 8(D) and Condition 15), redeem all, or from time to time, a portion (being
US$200,000 in principal amount or an integral multiple thereof) of the Bonds at the Settlement Equivalent of the
Early Redemption Amount if the Market Price on each Trading Day for 20 out of 30 consecutive Trading Days,
the last of which occurs not more than five Trading Days prior to the date of the redemption notice, shall have
been at least 125% of the Conversion Price or the Last Adjusted Conversion Price, as applicable. If the Market
Price cannot be determined for one or more consecutive Trading Days, such day or days will be disregarded in
the relevant calculation and will be deemed not to have existed when ascertaining such period.
Notwithstanding the forgoing, the Company may, at any time, having given not less than 30 nor more than
60 days notice to the Bondholders (which notice shall be irrevocable and given in accordance with Condition
15), redeem, in whole but not in part, the Bonds at the Settlement Equivalent of the Early Redemption Amount if
more than 90% of the principal amount of the Bonds originally issued have already been converted, redeemed or
repurchased, or canceled.
33

Early Redemption Amount means, for each US$200,000 principal amount of Bonds, the amount
calculated in accordance with the following formula, rounded (if necessary) to two decimal places with 0.005
being rounded upwards.
Early Redemption Amount = Previous Redemption Amount x (1 + r/2)d/p
Previous Redemption Amount = the Early Redemption Amount for each US$200,000 principal amount on
the Semi-annual Date immediately preceding the date fixed for redemption as set out below (or if the Bonds are
to be redeemed prior to November 18, 2015, US$200,000):
Semi-annual Date

Early Redemption Amount (in US dollars)

November 18, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

May 18, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November 18, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 18, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November 18, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 18, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November 18, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 18, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November 18, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 18, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

199,750.00
199,500.31
199,250.94
199,001.87
198,753.12
198,504.68
198,256.55
198,008.73
197,761.22
197,514.02

r = % expressed as a fraction
d = number of days from and including the immediately preceding Semi-annual Date (or if the Bonds are to
be redeemed on or before November 18, 2015, from and including the Closing Date) to, but excluding, the date
fixed for redemption, calculated on the basis of a 360-day year consisting of 12 months of 30 days each and, in
the case of an incomplete month, the number of days elapsed
p = 180
Upon the expiry of any such notice, the Company will be bound to redeem the Bonds to which such notice
relates at the price aforesaid applicable at the date fixed for redemption.
(C) Redemption for Tax Reasons
If, as a result of any change in, amendment or non-renewal of, or judicial decision relating to, the laws of the
ROC or any political subdivision or taxing authority or legislative body thereof or therein, or any treaty to which
the ROC is party, or any change in the official application or interpretation of any such laws or treaty, in any such
case, occurring after the Pricing Date, or as a result of any action taken or proposed by the ROC or any political
subdivision or any taxing authority or legislative body thereof or therein, or brought in a court of competent
jurisdiction in the ROC or any political subdivision thereof, whether or not such action was taken or brought with
respect to the Company but which, in any such case, becomes effective or generally known after the Pricing
Date, on the occasion of the next payment due in respect of any Bond, the Company has or will become required
to pay Additional Amounts as provided in Condition 9 and such obligation cannot be avoided by the Company
taking reasonable measures available to it, the Company may at its option, having given not less than 30 nor
more than 60 days notice (in accordance with Conditions 8(D) and 15) to the Bondholders (which notice will be
irrevocable) redeem, in whole but not in part, the Bonds on the expiry date of the notice of redemption (the Tax
Call Date) at the Settlement Equivalent of the Early Redemption Amount, provided that no notice of
redemption shall be given earlier than 90 days before the earliest date on which the Company would be required
to pay the additional amounts were a payment in respect of the Bonds then due. Prior to the publication of any
notice of redemption pursuant to this paragraph, the Company shall deliver to the Trustee a certificate in form
34

and substance reasonably acceptable to the Trustee signed by two directors of the Company stating that the
Company is entitled to effect such redemption and setting forth a statement of facts showing the conditions
precedent to the right of the Company so to redeem have occurred, and an opinion addressed to the Trustee in
form and substance reasonably acceptable to the Trustee by an independent law firm of recognized standing
admitted to practice in the ROC to the effect that the Company has or will become obliged to pay such additional
amounts as a result of such change or amendment and the Trustee shall be entitled to accept and fully rely on
such certificate as sufficient evidence of the conditions precedent referred to in this Condition 8(C) in which
event it shall be conclusive and binding on the Bondholders.
If the Company gives a notice of redemption of the Bonds under this Condition 8(C), each Bondholder shall
have the right (the Non-Redemption Right) to elect that all or a portion (being US$200,000 in principal amount
or an integral multiple thereof) of its Bonds not be redeemed by giving the notice to such effect to the Company
(with a copy to the Trustee) no later than 15 days prior to the redemption date fixed by the Company. If a
Bondholder exercises the Non-Redemption Right with respect to such Bonds, no Additional Amounts referred to
in Condition 9 shall be payable on the payments due after the relevant date (as defined in Condition 9) in respect
of such Bonds and such payments shall be made subject to the deduction or withholding required by law or
regulation (or the interpretation or administration thereof) of a relevant taxing jurisdiction in effect after the
Pricing Date of the Bonds. For the avoidance of doubt, the Company shall continue to be responsible to such
Bondholders for any Additional Amount that is payable in respect of the Bonds under Condition 9 as a result of
the laws or regulations (or the interpretation or administration thereof) of a relevant taxing jurisdiction in effect
on the Pricing Date.
(D) Redemption Procedures
In the case of a redemption on the Tax Call Date (a Redemption Date), the Company will furnish the
Trustee with a notice of redemption in sufficient time to permit the Trustee, within not less than 30 days nor
more than 60 days prior to any such Redemption Date, to mail to each Holder such notice of redemption, which
notice will specify:
(i)

the Redemption Date;

(ii) the price at which such Bonds will be redeemed and the method by which such amount will be paid;
(iii) that, in the case of Bondholders that hold Certificates, payment will be made upon presentation and
surrender of the Certificate(s) to be redeemed;
(iv) the names and addresses of all Paying Agents;
(v) the Conversion Right of the Bondholders and the then current Conversion Price;
(vi) the Market Price on the most recent practicable Trading Day for which such Market Price can be
provided; and
(vii) that the right to convert such Bonds will expire seven days prior to the Redemption Date.
No notice of redemption given under the above Condition 8(B) or Condition 8(C) shall be effective if the
Redemption Date specified therein is during a Closed Period or within 30 days following the last day of a Closed
Period.
Upon the expiration of such notice, the Company will be bound to redeem the Bonds at the applicable
redemption price on the Redemption Date, except as otherwise indicated in these Conditions or the Indenture.
Payment of the relevant redemption price for any Bond will be made on the Redemption Date, provided,
however, that (i), if such Bond is a Certificate and has not been so delivered on or prior to the Redemption Date,
payment will only be made at the time of delivery of such Certificate (together with the necessary endorsements)
35

and (ii) if the Redemption Date falls on a day other than a Business Day, payment shall be made on the next
immediate Business Day. If the Company has made available to the Trustee and the Paying Agents, in
accordance with the terms of the Indenture and the Agency Agreement, cash sufficient to pay the relevant
redemption price of a Bond on the Redemption Date, then, immediately after such Redemption Date, whether or
not such Bond is delivered to a Paying Agent, (i) such Bond will cease to be outstanding; (ii) the interest (if any)
on such Bond will cease to accrue; (iii) such Bond will be deemed paid; (iv) money sufficient for payment of the
relevant redemption price has been deposited with the Paying Agents at least one Business Day prior to the
Redemption Date; and (v) all other rights of the Holder will terminate (other than the right to receive the relevant
redemption price).
(E) Repurchase at the Option of the Bondholders
The Company will, at the option of the holder of any Bond (the Put Right), redeem such holders Bonds
in whole or in part (being US$200,000 in principal amount or an integral multiple thereof) on May 18, 2018 (the
Put Date) at the Settlement Equivalent of 99.25% of its principal amount (the Put Price). To exercise such
option the holder must deposit the Bond with any Paying Agent together with a duly completed redemption
notice in the form obtainable from any of the Paying Agents, not more than 60 nor less than 30 days prior to the
date set forth for the redemption. No Bond so deposited may be withdrawn (except as provided in the Agency
Agreement) without the prior written consent of the Company. Not less than 30 nor more than 60 days notice of
the commencement of the period for the deposit of Bonds for redemption pursuant to this paragraph (E) shall be
given to the Bondholders by the Company.
(F) Repurchase in the Event of Delisting
In the event that the Shares officially cease to be listed or admitted for trading on the TWSE (a Delisting),
each Bondholder shall have the right (the Delisting Put Right), at such Bondholders option, to require the
Company to repurchase, in whole but not in part, such Bondholders Bonds on the date set by the Company for
such repurchase (the Delisting Put Date), which shall be not less than 30 days nor more than 60 days
following the date on which the Trustee mails to each Bondholder a notice regarding the Delisting referred to
under Condition 8(H) below, at the Settlement Equivalent of the Early Redemption Amount.
(G) Repurchase of the Bonds in the Event of a Change of Control
If a Change of Control (as defined below) occurs, each Bondholder shall have the right (the Change of
Control Put Right), at such Bondholders option, to require the Company to repurchase, in whole but not in
part, such Bondholders Bonds on the date set by the Company for such repurchase (the Change of Control Put
Date), which shall not be less than 30 nor more than 60 days following the date on which the Company notifies
the Trustee of the Change of Control, at the Settlement Equivalent of the Early Redemption Amount.
A Change of Control is any transaction or event, whether by means of an exchange offer, liquidation,
tender offer, consolidation merger, combination, reclassification, recapitalization or otherwise, in connection
with which 50% or more of the Shares is exchanged for, converted into, acquired for or constitutes solely the
right to receive, consideration which is not at least 90% common stock that:

is listed on, or immediately after the transaction or event will be listed on, a U.S. national securities
exchange or on the TWSE, or

is approved, or immediately after the transaction or event will be approved, for quotation on the
NASDAQ National Market or any similar U.S. or ROC system of automated dissemination of
quotations of securities prices.

36

(H) Repurchase Procedures

Not less than 60 nor more than 90 days prior to the Put Date and promptly after becoming aware of, and in
any event within seven days of, a Delisting or a Change of Control, the Company will provide sufficient
information promptly to the Trustee in sufficient time to permit the Trustee to mail to each Bondholder a notice
regarding such holders Put Right, Delisting Put Right or Change of Control Put Right, as the case may be.
Notwithstanding the foregoing, so long as the Bonds are represented by the Global Bond and the Global Bond is
held on behalf of Euroclear and Clearstream, notice to Bondholders may be given by delivery of the relevant
notice to Euroclear and Clearstream, for communication by them to entitled accountholders in substitution for
notification as required by the foregoing sentence. Such notice shall state, as appropriate:
(i)

the Put Date, the Delisting Put Date or the Change of Control Put Date, as the case may be (each, a
Repurchase Date);

(ii) in the case of a Delisting, the date of such Delisting and, briefly, the events causing such Delisting;
(iii) in the case of a Change of Control, the date of such Change of Control and, briefly, the events causing
such Change of Control;
(iv) the date by which the Bondholder Repurchase Notice (as defined below) must be given;
(v) the Put Price, the Delisting Put Price or the Change of Control Put Price, as the case may be, and the
method by which such amount will be paid;
(vi) the names and addresses of all Paying Agents;
(vii) the Conversion Right of the Bondholders and the then current Conversion Price;
(viii) the Market Price on the most recent practicable Trading Day for which such Market Price can be
provided;
(ix) the procedures that Bondholders must follow and the requirements that Holders must satisfy in order to
exercise their repurchase rights and Conversion Right, as the case may be; and
(x) that a Repurchase Notice, once validly given, may not be withdrawn.
To exercise its right to require the Company to purchase the Bonds, the Bondholder must deliver a written
irrevocable notice of the exercise of such right (a Repurchase Notice) together with the applicable Certificates
(if applicable) to any Paying Agent on any Business Day prior to the close of business at the location of such
Paying Agent on such day and which day is not less than five Business Days prior to the Repurchase Date.
Payment of the Put Price upon exercise of the Put Right, of the Delisting Put Price upon exercise of the
Delisting Put Right or of the Change of Control Put Price upon exercise of the Change of Control Put Right, for
any Bond for which a Repurchase Notice has been delivered is conditioned upon delivery of such Bond
(including any Certificate, together with any necessary endorsements) to any Paying Agent on any Business Day
together with the delivery of such Repurchase Notice, and shall be made promptly following the later of the
Repurchase Date and the time of delivery of such Bond. If the Paying Agent holds on the Repurchase Date
money sufficient to pay the Put Price (such money shall be deposited with the Paying Agents at least one
Business Day prior to the Put Date), the Delisting Put Price or the Change of Control Put Price, as the case may
be, of Bonds for which Bondholder Repurchase Notices have been delivered in accordance with the provisions of
the Indenture, then, whether or not such Bond is delivered to the Paying Agent, on and after such Repurchase
Date, (i) such Bond will cease to be outstanding; (ii) the interest (if any) on such Bond will cease to accrue;
(iii) such Bond will be deemed paid; and (iv) all other rights of the Bondholder shall terminate (other than the
right to receive the Put Price, the Delisting Put Price or the Change of Control Put Price, as the case may be).

37

(I) Purchase and Cancellation

The Company or any Subsidiary may at any time and from time to time purchase Bonds in the open market
or otherwise at any price. If purchases are made by tender, tenders must be available to all Bondholders alike.
Any Bonds so purchased by the Company will be surrendered to the Principal Paying Agent for cancellation.
Subsidiary means any company or other business entity more than 50% of the issued share capital or
other ownership interest of which is for the time being owned, directly or indirectly, by the Company.
9.

Taxation

Subject to Condition 8(C), all payments of principal and premium and other amounts on the Bonds and all
issuances of Shares on conversion of the Bonds will be made after any deduction or withholding for or on
account of any present or future taxes, duties, assessments or governmental charges of whatever nature (Taxes)
imposed or levied by or on behalf of the government of the ROC or any authority thereof or therein having power
to tax; provided that in respect of any such deduction or withholding from any such payment the Company will
pay such additional amounts (Additional Amounts) as will result in the receipt by the Bondholders of the
amounts which would otherwise have been receivable in the absence of any such deduction or withholding,
except that no Additional Amounts shall be payable in respect of any Bond:
(i)

to a Bondholder or beneficial owner (or to a third party on behalf of a Bondholder or beneficial owner)
where such Bondholder or beneficial owner is liable for such Taxes in respect of such Bond by reason
of its being connected with the ROC otherwise than merely by holding such Bond or by the receipt of
principal or premium or any other amount in respect of any Bond or the enforcement of payment on
such Bond;

(ii) to or on behalf of a Bondholder or beneficial owner to the extent that such Bondholder or beneficial
owner would not be liable for or subject to such deduction or withholding by making a declaration of
non-residence or other claims for exemption or deduction to the relevant tax authorities if such
Bondholder or beneficial owner is eligible to make such declaration or claim and, such Bondholder or
beneficial owner fails to timely to do so;
(iii) presented for payment more than 30 days after the relevant date except to the extent that the
Bondholder or beneficial owner thereof would have been entitled to the Additional Amounts on
presenting the same for payment on the last day of such 30-day period;
(iv) to or on behalf of a Bondholder or beneficial owner who is subject to withholding or deduction
imposed on a payment to such Bondholder or beneficial owner and required to be made pursuant to
European Council Directive 2003/48/EC or any European Union Directive implementing the
conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings
income (the Directive) or any law implementing or complying with, or introduced in order to
conform with, such Directive; or
(v) to or on behalf of a Bondholder or beneficial owner if such Bondholder or beneficial owner would have
been able to avoid the withholding or deduction by the presentation (where presentation is required) of
the relevant Bond to, or otherwise accepting payment from, another paying agent in a member state of
the European Union.
For this purpose the relevant date in relation to any Bond means (a) the due date for payment in respect
thereof, or (b) if the full amount of the moneys payable on such due date has not been received by the Trustee
and the Principal Paying Agent on or prior to such due date, the date on which notice is duly given to the
Bondholders that such moneys have been so received.
Additionally, the obligation to pay such Additional Amounts shall not apply with respect to (i) any estate,
inheritance, gift, sales, transfer or personal property tax or any similar taxes, duties, assessments or other
38

governmental charges of similar nature or (ii) any taxes, duties, assessments or other governmental charges that
are payable otherwise than by deduction or withholding from payments on the Bonds or issuance of Shares on
conversion of the Bonds.
References in these Conditions to principal, premium and/or any other amounts which may be payable
pursuant hereto or pursuant to the Indenture shall be deemed also to refer to any Additional Amounts which may
be payable under this Condition or any undertaking given in addition to or substitution for it under the Indenture.
Any premium paid on redemption of the Bonds will be deemed interest income for the purpose of ROC
taxation. See ROC Taxation.
10. Events of Default
The Trustee, if so requested in writing by the Bondholders of not less than 25% in principal amount of the
Bonds then outstanding or if so directed by an Extraordinary Resolution, shall (subject in each case to being
indemnified by the Bondholders to its satisfaction), give notice to the Company that the Bonds are immediately
due and repayable, if any of the following events shall have occurred and be continuing, provided, however, that
if any of the events specified in clauses (vi), (vii) or (viii) shall have occurred, the Bonds shall forthwith become
immediately due and payable without regard to the giving of any such notice:
(i)

Payment Default: A default is made for more than seven days in the payment of principal or premium
(if any) in respect of any of the Bonds when due;

(ii)

Default on Conversion: A default is made by the Company in failing to give effect to a Conversion
Right exercised by a Bondholder in accordance with the Indenture and such failure conditions
continue for more than five business days;

(iii) Other Default: A default is made by the Company in the performance or observance of any covenant,
condition or provision contained in the Indenture or in the Bonds on its part to be performed or
observed (other than (i) the undertaking to use best efforts to obtain and maintain a listing of the
Shares into which the Bonds are convertible on the TWSE, except in the case of a voluntary
delisting, (ii) the covenant to pay the principal amount or premium or any other amount, in respect of
any of the Bonds and (iii) the covenant to give effect to a Conversion Right) and the default
continues for the period of 30 days next following the service by the Trustee on the Company of
written notice requiring such default to be remedied (except in any case where the Trustee considers
the default to be incapable of being remedied, in which case the notice or continuation hereinafter
mentioned will not be required);
(iv) Cross Default: Any other present or future indebtedness of the Company or any Principal Subsidiary
(as defined below) for or in respect of money borrowed or raised becomes due and payable prior to
its stated maturity by reason of an event of default (however called) or any such indebtedness is not
paid when due or, as the case may be, within any applicable grace period originally provided for or
the Company or any Principal Subsidiary fails to pay when due any amounts payable by it under any
present or future guarantee, indemnity or similar obligation for any monies borrowed or raised,
provided that the aggregate amount of the relevant indebtedness or amount payable in respect of
which one or more of the events mentioned above in this paragraph (iv) have occurred equals or
exceeds US$20,000,000 (or its equivalent in another currency);
(v)

Security Enforced: Any Person entitled to the benefit thereof shall institute legal proceedings to
enforce any Lien upon the whole or any material part of the assets or revenues of the Company or of
any Principal Subsidiary, unless the Company or such Principal Subsidiary is contesting such
proceedings in good faith by appropriate proceedings and has established reserves adequate in the
judgment of the Company with respect thereto in accordance with ROC GAAP as determined by an
independent accountants certificate;
39

(vi) Bankruptcy: A decree or order by a court having jurisdiction shall have been entered adjudging the
Company or any Principal Subsidiary bankrupt or insolvent, or approving a petition seeking
reorganization of the Company or any Principal Subsidiary under any applicable bankruptcy,
insolvency or reorganization law, or for the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of the Company or any Principal Subsidiary or of all or
substantially all of the business or assets, or for the winding-up or liquidation of the affairs, of the
Company or any Principal Subsidiary;
(vii) Dissolution: An effective resolution shall be passed for the winding-up or liquidation of the Company
or any Principal Subsidiary, or the Company or any Principal Subsidiary shall institute proceedings
to be adjudicated as a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization or arrangement under
any applicable bankruptcy, insolvency or reorganization law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its business or assets, or shall make an assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or
corporate action shall be taken by the Company or any Principal Subsidiary in furtherance of any of
the aforesaid purposes;
(viii) Bankruptcy Proceedings: Proceedings shall have been initiated against the Company or any Principal
Subsidiary under any applicable bankruptcy, insolvency or reorganization law and such proceedings
shall not have been discharged or stayed within a period of 90 days (or such longer period as the
Trustee may consider appropriate having obtained the advice of a recognized counsel admitted to
practice in the jurisdiction concerned); or
(ix) Unlawfulness: It is or will become unlawful for the Company to perform or comply with any one or
more of its obligations under any of the Bonds, the Indenture or the Agency Agreement.
For the purposes of (iv) above, any indebtedness or obligation which is in a currency other than U.S. dollars
shall be translated into U.S. dollars at the spot rate for the sale of U.S. dollars against the purchase of the relevant
currency quoted by any leading bank in the relevant market selected by the Trustee on any day when the Trustee
requests such a quotation for such purposes.
For the purposes of (v) above, Lien means any mortgage, charge, pledge, lien or other encumbrance,
present or future, created or assumed by the Company or any Principal Subsidiary, and Lien on assets, property
or revenues shall not be deemed to be material to the assets, property or revenues of the Company and the
Principal Subsidiaries taken as a whole unless it is for or in respect of indebtedness of US$20,000,000 or more
(or its equivalent in another currency).
As used in these Conditions, Principal Subsidiary means any company or other business entity of which
more than 50% of the issued share capital or other ownership interest is for the time being owned, directly or
indirectly, by the Company and either (i) the net sales of which, as shown by the accounts (consolidated in the
case of a company which has subsidiaries) of such Subsidiary upon which the latest audited consolidated
accounts have been based, are at least ten percent of the consolidated net sales of the Company and its
Subsidiaries or (ii) the gross assets of which as shown by the aforementioned accounts are at least ten percent of
the consolidated gross assets of the Company and its Subsidiaries.
Subject to the provisions of the following six paragraphs, the Conversion Right attached to any Bonds shall
survive the provision of the default notice and the acceleration or the payment of the Bonds pursuant to
clause (ii) of this Condition 10.
Notwithstanding receipt of such payment, a Bondholder may exercise its Conversion Right by depositing a
Conversion Notice with a Conversion Agent or Paying Agent during the period from and including the Default
40

Notice Date (as defined below) with respect to an event specified in clause (ii) (at which time the Company will
notify the Bondholders of the number of Shares per Bond to be delivered upon conversion, assuming all the then
outstanding Bonds are converted) to and including the seventh business day thereafter.
If a converting Bondholder deposits a Conversion Notice pursuant to this Condition 10 on the business day
prior to, or during, a Closed Period, the Bondholders Conversion Right shall continue until the business day
following the last day of the Closed Period which shall be deemed the Conversion Date, for the purposes of such
Bondholders exercise of its Conversion Right pursuant to this Condition 10.
If the Conversion Right attached to any Bond is exercised pursuant to this Condition 10, the Company will
issue Shares (which number will be disclosed to such Bondholders as soon as practicable after the Conversion
Notice is given) in accordance with Condition 6(B)(iv), except that the Company shall have 12 business days
before it is required to register the converting Bondholder (or its nominee) in the Companys register of
shareholders as the owner of the number of Shares to be transferred pursuant to Condition 6(B)(iii).
For the purposes of this Condition 10, business day shall mean a day other than a Saturday or Sunday on
which banks are open for business in the ROC.
Immediately upon the occurrence of any of the events specified in clauses (vi), (vii) or (viii) of this
Condition 10 and, in the case of any other event specified in this Condition 10, upon the date on which notice as
first mentioned in this Condition is given by the Trustee to the Company (the Default Notice Date), the Bonds
will become immediately due and payable at the Settlement Amount of their principal amount.
11. Prescription
Claims against the Company for payment of principal and premium and other amounts in respect of the
Bonds will become prescribed unless made within 10 years from the relevant date for payment in respect thereof.
12. Enforcement
At any time after the Bonds shall have become immediately due and repayable, the Trustee may, at the
written direction of the Bondholders holding not less than 25% in principal amount of the Bonds then
outstanding, and without further notice, take such proceedings against the Company as it may think fit to enforce
repayment of the Bonds together with premium, if any, with respect thereto and to enforce the provisions of the
Indenture, but it will not be bound to take any such proceedings unless (a) it shall have been so requested in
writing by the Bondholders of not less than 25% in principal amount of the Bonds then outstanding or so directed
by an Extraordinary Resolution and (b) it shall have indemnified or secured to its reasonable satisfaction. No
Bondholder will be entitled to proceed directly against the Company unless the Trustee, having become bound to
do so, fails to do so for 60 days and such failure shall be continuing.
13. Meetings of Bondholders, Modification and Waiver
(A) The Indenture contains provisions for convening meetings of Bondholders to consider any matter
affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of the
Bonds or the provisions of the Indenture. The quorum at any such meeting for passing an Extraordinary
Resolution will be two or more persons holding or representing over 50% in principal amount of the
Bonds for the time being outstanding or, at any adjourned such meeting, two or more persons being or
representing Bondholders whatever the principal amount of the Bonds so held or represented unless the
business of such meeting includes consideration of proposals, inter alia, (i) to modify the due date for
any payment in respect of the Bonds, (ii) to reduce or cancel the principal amount or premium or any
other amount payable in respect of the Bonds, or Settlement Amount payable in respect of the Bonds or
changing the method of calculation of interest or Settlement Amount, (iii) to change the currency of
41

payment of the Bonds, (iv) to modify or cancel the Conversion Rights, or (v) to modify the provisions
concerning the quorum required at any meeting of the Bondholders or the majority required to pass an
Extraordinary Resolution, in which case the necessary quorum for passing an Extraordinary Resolution
will be two or more persons holding or representing not less than 66%, or at any adjourned such
meeting not less than 33%, in principal amount of the Bonds for the time being outstanding. An
Extraordinary Resolution passed at any meeting of Bondholders will be binding on all Bondholders,
whether or not they are present at the meeting. The Indenture provides that a written resolution signed
by or on behalf of the Bondholders of not less than 90% of the aggregate principal amount of Bonds
outstanding shall be as valid and effective as a duly passed Extraordinary Resolution.
The Indenture defines Extraordinary Resolution to mean a resolution passed at a meeting of the
Bondholders duly convened and held in accordance with the provisions of the Indenture by a majority
consisting of not less than three-quarters of the votes cast thereon.
(B) The Company, the Trustee and the Principal Paying Agent may enter into one or more indenture or
indentures supplemental to the Indenture or the Agency Agreement for any of the following purposes:
(i) to evidence the succession of another corporation to the Company and the assumption by such
successor of the covenants and obligations of the Company under the Indenture and in, or with respect
to, the Bonds, in the event of any merger, consolidation or other action in accordance with Condition
6(D) and Article 6 of the Indenture; or (ii) to add to the covenants of the Company for the benefit of the
Holders of Bonds; or (iii) to surrender any right or power conferred upon the Company; or (iv) to
reduce the Conversion Price; or (v) to cure any ambiguity, to correct or supplement any provision in
the Indenture which may be inconsistent with any other provision therein or which is otherwise
defective, or to make any other provisions with respect to matters or questions arising under the
Indenture which shall not be inconsistent with the provisions of the Indenture, provided, such action
pursuant to this clause (v) shall not adversely affect the interest of the Bondholders; or (vi) to make any
modification of the Bonds, the Indenture or the Agency Agreement of a formal, minor or technical
nature or necessary in the opinion of the Trustee to correct a manifest error or, upon advice of counsel,
to comply with mandatory provisions of ROC law, provided, such action pursuant to this clause
(vi) shall not adversely affect the interest of the Bondholders; or (vii) pursuant to Section 9.10 of the
Indenture, to seek an alternative to listing, trading and/or quotation for the Bonds by another listing
authority, stock exchange and/or quotation system other than the stock exchange on which the Bonds
are listed for the time being. Any such modification, waiver or authorization will be binding on all of
the Bondholders and upon all future Bondholders and, unless the Trustee agrees otherwise, any such
modification will be notified to the Bondholders by the Company in accordance with Condition 15 as
soon as practicable thereafter.
(C) In connection with the exercise by it of any of its trusts, powers, authorities or discretions (including,
without limitation, any modification, waiver, authorization or determination), the Trustee shall have
regard to the general interests of the Bondholders as a class but shall not have regard to any interests
arising from circumstances particular to individual Bondholders (whatever their number) and, in
particular but without limitation, shall not have regard to the consequences of the exercise of its trusts,
powers, authorities or discretions for individual Bondholders (whatever their number) resulting from
their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the
jurisdiction of, any particular territory and the Trustee shall not be entitled to require, nor shall any
Bondholder be entitled to claim, from the Company, the Trustee or any other person any
indemnification or payment in respect of any tax consequence of any such exercise upon individual
Bondholders except to the extent already provided for in Condition 9 and/or any undertaking given in
addition to, or in substitution for, Condition 9 pursuant to the Indenture.
14. Replacement of Certificates
The Indenture includes provisions for the replacement of any mutilated, defaced, destroyed, stolen or lost
Certificate at the specified office of the Registrar or at the specified office of any Paying Agent upon payment by
42

the claimant of such costs as may be incurred in connection therewith and on such terms as to evidence and
indemnity as the Company and the Registrar may require. Mutilated or defaced Certificates must be surrendered
before replacements will be issued.
In the event any such mutilated, destroyed, lost or stolen Certificate has become or is about to become due
and payable, the Company in its discretion may, instead of issuing a new Certificate, pay such Bond.
15. Notices
Notices to Bondholders shall be validly given if in writing in English and mailed by first class mail to them
at their respective addresses in the Bond Register. Notwithstanding the foregoing, so long as the Bonds are
represented by the Global Bond and the Global Bond is held on behalf of Euroclear or Clearstream, or the
Alternative Clearing System (as defined in Condition 18(F)), notices to holders of the Bonds will be given by
delivery of the relevant notice to Euroclear or Clearstream or the Alternative Clearing System, for
communication by it to entitled accountholders in substitution for notification as required by the foregoing
sentence. Any such notice shall be deemed to have been given on the later of such delivery and the seventh day
after being so mailed.
In addition, so long as the Bonds are listed on the Singapore Exchange Securities Trading Limited (the
SGX-ST) and the rules of that exchange so require, notice shall be published, at the Companys expense, either
in a newspaper having general or wide circulation in Singapore or on the Internet site of the SGX-ST
(www.sgx.com). Any such notice shall be deemed to have been given on the date of such publication.
The Company shall cause to be filed with the Trustee, and shall cause to be given to all Bondholders (A) at
least seven days prior to the applicable record date (or date of submission to a meeting of the shareholders or
directors of the Company for their approval, if such approval is required), if the Company shall (i) declare a
dividend (or other distribution) on its Shares payable otherwise than in cash out of its retained earnings, or
(ii) authorize the grant to the holders of its Shares of options, rights or warrants to subscribe for or purchase any
Shares in the authorized capital of any class or of any other rights, (B) at least 20 days prior to the applicable
record date, upon (i) a reclassification of the Shares (other than a subdivision or combination of its outstanding
Shares), or of any consolidation, merger or share exchange to which the Company is a party and for which
approval of any shareholders of the Company is required, or of any tender or exchange offer by the Company or
any Subsidiary for all or any of the Shares, or of the conveyance, lease, sale or transfer of all or substantially all
of the assets of the Company, or (ii) the voluntary or involuntary dissolution, liquidation or winding up of the
Company, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of
Shares of record to be entitled to such dividend, distribution, rights, options or warrants are to be determined, or
(y) the date on which such reclassification, consolidation, merger, share exchange, tender or exchange offer,
conveyance, lease, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Shares of record shall be entitled to exchange their Shares for
securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange,
tender or exchange offer, conveyance, lease, sale, transfer, dissolution, liquidation or winding up, and (C) within
five business days of the occurrence of an event after which the Company is obligated to provide notice pursuant
to Conditions 6(A) and 6(F).
For the purposes of subsection (C) above, business day means a day other than a Saturday or Sunday on
which banks are open for business in the ROC.
16. Indemnification
The Indenture contains provisions for the indemnification of the Trustee and for its relief from
responsibility, including provisions relieving it from taking any actions to enforce repayment unless indemnified
or secured to its reasonable satisfaction.
43

17. Governing Law and Jurisdiction

The Indenture, the Agency Agreement and the Bonds are governed by, and shall be construed in accordance
with, the laws of the State of New York. In relation to any legal action or proceedings arising out of or in
connection with the Indenture, the Agency Agreement and the Bonds, the Company has in the Indenture or the
Agency Agreement, as the case may be, irrevocably submitted to the jurisdiction of the State of New York and
United States Federal courts sitting in the Borough of Manhattan, the City of New York. The Company has
appointed UMC Group (USA), as its agent for service of process.
Under current ROC law, ROC courts may not recognize a foreign judgment where a default judgment was
rendered by the foreign court and where the defendant was not personally served while within the jurisdiction of
such foreign court or with the judicial assistance of ROC courts. The ROC courts may further decide that the
process served on the agent for service of process of the Company does not constitute a service of process in
person. Therefore, to increase the possibility of the recognition of a foreign judgment by the ROC courts, it may
be necessary to serve the Company through the judicial assistance of an ROC court. See Enforceability of
Judgments in the Republic of China.
Bondholders should note that exercise of a Conversion Right is subject not only to the provisions of the
Indenture but also to applicable ROC laws and regulations and restrictions or limitations provided thereunder
18. The Global Bond
The Global Bond contains provisions which apply to the Bonds in respect of which the Global Bond is
issued, some of which modify the effect of the Conditions. The following is a summary of those provisions.
(A) Meetings
The registered Holders of the Global Bond will be treated as being two persons for the purposes of any
quorum requirements of a meeting of Bondholders and, at any such meeting, as having one vote in respect of
each US$200,000 in principal amount of Bonds for which the Global Bond are issued. The Trustee may allow a
person with an interest in Bonds in respect of which the Global Bond has been issued to attend and speak at a
meeting of Bondholders on appropriate proof of its identity and interest.
(B) Cancellation
Cancellation of any Bond following its redemption, repurchase, conversion or purchase by the Company
will be effected by a reduction in the principal amount of the Bonds in the register of Bondholders.
(C) Trustees Powers
In considering the interests of Bondholders, while the Global Bond is registered in the name of a nominee
for a clearing system, the Trustee may, without being obliged to do so, have regard to any information provided
to it by such clearing system or its operator as to the identity (either individually or by category) of its
accountholders with entitlements to Bonds and may consider such interests as if such accountholders were the
Bondholders.
(D) Conversion
Subject to the requirements of Euroclear and Clearstream, the Conversion Right attaching to a Bond in
respect of which the Global Bond is issued may be exercised by the presentation to or to the order of the
Principal Conversion Agent or to any Conversion Agent of one or more Conversion Notices duly completed by
or on behalf of a Holder of a book-entry interest in the Bond. Such Conversion Notice is obtainable at, or may be
44

delivered by, the Principal Conversion Agent or any Conversion Agent. Deposit of the Global Bond with the
Conversion Agent together with the relevant Conversion Notice shall not be required. The Principal Conversion
Agent or such other Conversion Agent shall notify the Registrar and the Holder of the Global Bond of the
exercise of the Conversion Right.
(E) Payment
Payments in respect of Bonds, including the principal amount and any premium or other amount,
represented by the Global Bond will be made without presentation or, if no further payment is to be made in
respect of the Bonds, against presentation and surrender of the Global Bond to or to the order of the Principal
Paying Agent or such other Paying Agent as shall have been notified to the Bondholders for such purpose.
(F) Notices
So long as the Bonds are represented by the Global Bond and the Global Bond is held on behalf of
Euroclear, Clearstream or any Alternative Clearing System as shall have been designated by the Trustee (the
Alternative Clearing System), notices to Bondholders may be given by delivery of the relevant notice to
Euroclear, Clearstream, or the Alternative Clearing System, for communication by it to entitled accountholders in
substitution for notification as required by the Conditions.
(G) Individual Definitive Bonds
Bonds in definitive form for individual Bondholders will not be issued in exchange for interests in Bonds in
respect of which the Global Bond is issued, except where (i) the Common Depositary or any successor to the
Common Depositary notifies us in writing that it is at any time unwilling or unable to continue as a depositary
and a successor depositary is not appointed by us within 90 days, (ii) either Euroclear or Clearstream (or the
Alternative Clearing System in which the Bonds evidenced by the Global Bond may be held) is closed for
business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or
announces an intention permanently to cease business or does in fact do so, or (iii) if any of the Bonds shall have
become due and payable in accordance with Condition 10.
(H) Transfers
Transfers of interests in the Bonds will be effected through the records of Euroclear or Clearstream and their
respective participants in accordance with the rules and procedures of Euroclear or Clearstream and their
respective direct and indirect participants.
(I) Enforcement
For the purposes of enforcement of the provisions of the Indenture against the Trustee, the persons named in
a certificate of the Holder of the Bonds in respect of which the Global Bond is issued shall be recognized as the
beneficiaries of the trusts set out in the Indenture, to the extent of the principal amount of their interest in the
Bonds set out in the certificate of the Holder, as if they were themselves the Bondholders in such principal
amounts.

45

THE GLOBAL BOND

Phrases used in this section and not otherwise defined shall have the meanings given to them in Terms and
Conditions of the Bonds.
The Global Bond will be deposited with, and registered in the nominee name of, a common depositary for
Euroclear and Clearstream (the Common Depositary). Euroclear and Clearstream will credit their respective
account holders with the respective principal amounts of the individual interests represented by the Global Bond.
Such accounts will be designated initially by or on behalf of the Initial Purchasers. Ownership of beneficial
interests in the Global Bond will be limited to persons who have accounts with Euroclear or Clearstream, or
persons who hold interests through such account holders. Ownership of beneficial interests in the Global Bond
will be shown on, and the transfer of that ownership will be effected only through, the records maintained by
Euroclear and Clearstream (with respect to interests of their respective account holders) and the records of such
account holders (with respect to interests of persons with beneficial interests in the Global Bond other than such
account holders).
Payments of the principal of, and any premium and other amount on, the Global Bond will be made to the
Common Depositary or its nominee as the registered owner thereof. None of us, the Trustee, the Common
Depositary for the Bonds, its nominee, the Principal Paying Agent, the Paying Agents, any custodian, transfer
agent or registrar will have any responsibility or liability for the accuracy of any of the records relating to, or
payments made on account of, ownership interests in the Global Bond or for any notice permitted or required to
be given to holders of Bonds or any consent given or actions taken by such registered holders of Bonds. We
expect that upon receipt of any payment of principal and premium and any other amount in respect of the Global
Bond representing any Bonds held by it or its nominee, the Common Depositary, will immediately credit the
accounts of the participants of Euroclear and Clearstream with payments proportionate to their respective
interests in the amount of the principal or the premium or any other amount of the Global Bond as shown on their
respective records.
Transfers between account holders in Euroclear and Clearstream will be effected in accordance with their
respective rules and operating procedures.
The laws of certain jurisdictions require that certain purchasers of Bonds take physical delivery of such
Bonds in definitive form. Accordingly, the ability of beneficial owners to own, transfer or pledge beneficial
interests in the Global Bond may be limited by such laws.
Conversion through participants in Euroclear and Clearstream will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Although Euroclear and Clearstream have agreed to the foregoing procedures in order to facilitate transfers
of interests in the Global Bond among participants and account holders of Clearstream and Euroclear, they are
under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued
at any time. None of us, the Trustee, the Common Depositary, the Principal Paying Agent, the Paying Agents,
any custodian, any transfer agent, any registrar or any other agent of our company will have any responsibility
for the performance by Euroclear or Clearstream, or their respective participants, indirect participants or account
holders of their respective obligations under the rules and procedures governing their operations.
Euroclear and Clearstream each holds Bonds for participating organizations and facilitates the clearance and
settlement of Bond transactions between its respective participants through electronic book-entry changes in
accounts of such participants. Euroclear and Clearstream provide to their respective participants, among other
things, services for safekeeping, administration, clearance and settlement of internationally traded securities and
securities lending and borrowing. Euroclear and Clearstream participants are financial institutions throughout the
world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and
46

certain other organizations. Indirect access to Euroclear and Clearstream is also available to others, such as
banks, brokers, dealers and trust companies which clear through or maintain a custodial relationship with a
Euroclear or Clearstream participant, either directly or indirectly.
Individual Definitive Bonds
If (i) the Common Depositary or any successor to the Common Depositary notifies us in writing that it is at
any time unwilling or unable to continue as a depositary and a successor depositary is not appointed by us within
90 days or (ii) either Euroclear or Clearstream or a successor clearing system is closed for business for a
continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention
permanently to cease business or does in fact do so or (iii) an event of default under the Bonds or the Indenture
has occurred and is continuing, we will issue Certificates in registered form in exchange for the Global Bond.
Upon receipt of such notice from Euroclear, Clearstream or the Registrar, as the case may be, we will make
arrangements for the exchange of interests in the Global Bond for Certificates and cause the requested
Certificates to be executed and delivered to the Registrar in sufficient quantities and authenticated by the
Registrar for delivery to the Bondholders. Persons exchanging interests in the Global Bond for Certificates will
be required to provide to the Trustee, through the relevant clearing system, written instructions and other
information required by us and the Registrar to complete, execute and deliver such Certificates. Certificates
delivered in exchange for the Global Bond or beneficial interests therein will be registered in the names
requested, and issued in any denominations, approved by the relevant clearing system.

47

CERTAIN ROC LEGAL REQUIREMENTS

Tax Guarantor for Repatriation of Profits
Non-ROC Bondholders, including the PRC Bondholders meeting the applicable requirements under ROC
laws and regulations, who convert their Bonds into our Shares and register as our shareholder are required under
current ROC laws and regulations to appoint an agent, also referred to as a Tax Guarantor in this Offering
Memorandum, in the ROC for filing tax returns and making tax payments on their behalf. A Tax Guarantor will
be required to meet the qualifications set by the ROC Ministry of Finance and will act as the guarantor of the
holders tax payment obligations. Evidence of the appointment of a Tax Guarantor and the approval of such
appointment or tax clearance certification are required as conditions to repatriating the holders profits derived
from the sale of Shares. There can be no assurance that holders will be able to appoint and obtain approval for a
Tax Guarantor in a timely manner.
Appointment of Local Agent
Non-ROC Bondholders, including the PRC Bondholders meeting the applicable requirements under ROC
laws and regulations, who convert their Bonds into our Shares are required under current ROC laws and
regulations to appoint a local agent or representative (with such qualifications as are stipulated by the
Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and the Regulations
Governing Securities Investment and Future Trading in Taiwan by Mainland Area Investors, as the case may be)
in the ROC to, among other things, open a securities trading account with a local securities brokerage firm, remit
funds, pay taxes and exercise shareholders rights, as well as appoint a local bank, approved by the ROC FSC to
provide custodial services, to act as custodian for confirmation and settlement of trades, safekeeping of securities
and cash proceeds, payment of taxes and reporting and declaration of information. Unless these requirements are
satisfied, Non-ROC Bondholders will not be able to receive and hold or otherwise transfer Shares on the TWSE.
Disclosure Obligations
A Bondholder requesting the conversion of its Bonds into Shares or such Bondholders designee may be
required to provide certain information to us or the Paying Agent, including the name and nationality of the
person to be registered as the holder of the Shares, the number of Shares such person has acquired in the past
through conversion of Bonds held by him or her, and supporting documents, before such conversion will be
effected. Under applicable ROC laws, we are required to report the status of the Bonds twice every month to the
ROC authority in charge of foreign currency and post the above information on the websites designated by the
ROC FSC as well as the information that the person exercising the conversion rights (1) is a related party to us
as defined in the International Accounting Standards No. 24 as endorsed by ROC FSC or (2) will hold,
immediately following such conversion, more than 10% of the total number of Shares deliverable upon the
conversion of the aggregate principal amount of all Bonds at the time of issue.

48

TRANSFER RESTRICTIONS
Because of the following restrictions, we encourage you to consult legal counsel prior to making any offer,
resale, pledge or other transfer of Bonds offered and sold in reliance on Regulation S or the Shares issuable
upon conversion of the Bonds.
The Bonds may not be offered or sold directly or indirectly in the ROC. The Bonds and the Shares issuable
upon conversion of the Bonds have not been, and will not be, registered by us under the Securities Act. The
Bonds and the Shares issuable upon conversion of the Bonds may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. In addition, no transfer of any interest in the Global
Bond may be made to any U.S. person outside the United States or any person in the United States for a period of
40 days after the Closing Date of this offering and, during such 40-day period, the Bonds may be converted into
Shares only by persons other than U.S. persons located outside the United States. Terms used in this section are
defined in Regulation S under the Securities Act.
Except in certain limited circumstances, interests in the Bonds may only be held through interests in the
Global Bond. Such interests in the Global Bond will be shown on, and transfers thereof will be effected only
through, records maintained by Euroclear and Clearstream and their respective direct and indirect participants.
See Global Bond.
1.

Each purchaser of the Bonds, by accepting delivery of this Offering Memorandum, will be deemed to
have acknowledged and represented to and agreed to as follows:

2.

The Bonds and the Shares issuable upon conversion of the Bonds have not been, and will not be,
registered by us under the Securities Act or with any securities regulatory authority of any state of the
United States and are subject to significant restrictions on transfer.

3.

Each owner purchasing prior to the expiration of 40 days after the Closing Date (Distribution
Compliance Period) is purchasing the Bonds in an offshore transaction meeting the requirements of
Rule 903 or 904 of Regulation S.

4.

The Bonds will not be sold, pledged or transferred to, or for the account or benefit of, any U.S. person
outside the United States or any person in the United States during the Distribution Compliance Period.

5.

Such owner will not offer, sell, pledge or otherwise transfer any interest in the Bonds and the Shares
issuable upon conversion of the Bonds except as permitted by the applicable legend set forth in
paragraph (5) below.

6.

The Bonds will bear legends to the following effect, unless we determine otherwise in compliance with
applicable law:
THE BONDS EVIDENCED HEREBY AND THE SHARES ISSUABLE UPON CONVERSION
OF THE BONDS HAVE NOT BEEN, AND WILL NOT BE, REGISTERED BY UNITED
MICROELECTRONICS CORPORATION (UMC) UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND PRIOR TO
THE EXPIRATION OF 40 DAYS AFTER THE CLOSING DATE OF THIS OFFERING (THE
DISTRIBUTION COMPLIANCE PERIOD) SUCH BONDS MAY (X) NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY U.S. PERSON OUTSIDE THE
UNITED STATES OR ANY PERSON IN THE UNITED STATES AND (Y) BE CONVERTED
INTO SHARES OF UMC ONLY BY PERSONS LOCATED OUTSIDE THE UNITED STATES
WHO ARE NOT U.S. PERSONS.
THIS LEGEND WILL BE REMOVED AFTER THE END OF THE DISTRIBUTION
COMPLIANCE PERIOD, AFTER WHICH THE BONDS EVIDENCED HEREBY AND THE
SHARES OF UMC ISSUABLE UPON CONVERSION OF THE BONDS SHALL NO LONGER
49

BE SUBJECT TO THE RESTRICTIONS PROVIDED IN THIS LEGEND, PROVIDED THAT

AT SUCH TIME AND THEREAFTER THE OFFER OR SALE OF THE BONDS EVIDENCED
HEREBY AND THE SHARES OF UMC ISSUABLE UPON CONVERSION OF THE BONDS
WOULD NOT BE RESTRICTED UNDER ANY APPLICABLE SECURITIES LAWS OF THE
UNITED STATES OR OF THE STATES OR TERRITORIES OF THE UNITED STATES.

50

USE OF PROCEEDS
We estimate that our net proceeds from this offering, after deducting underwriting discounts, including
selling concessions and other expenses, will be approximately US$597.9 million. We intend to use the net
proceeds of this offering to purchase machinery and equipment.

51

CAPITALIZATION
The following table sets forth our unaudited consolidated capitalization as of March 31, 2015 under TIFRSs
and the capitalization as of the same date as adjusted for the offering of the Bonds.
There has been no material change in our capitalization since March 31, 2015.
As of March 31, 2015
Actual
As adjusted for this offering
NT$
NT$
(amounts are in millions, unless otherwise specified)
(unaudited) (consolidated)

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . .

Short-term loans (including current portion of
long-term liabilities) . . . . . . . . . . . . . . . . . . . . . .
Bonds payable and long-term loans (excluding
current portion) (1):
Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . .
Convertible bonds payable . . . . . . . . . . . . . . .
Long-term loans . . . . . . . . . . . . . . . . . . . . . . .
Total bonds payable and long-term
loans . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders equity:
Capital stock: NT$10 par value;
Authorized: 26,000 million Shares . . . . .
Issued: 12,748 million Shares . . . . . . . . .
(12,537 million Shares outstanding) . . . .
Capital reserve . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . .
Unrealized gains or losses on available-forsale financial assets . . . . . . . . . . . . . . . . . . .
Exchange differences on translation of
foreign operations . . . . . . . . . . . . . . . . . . . .
Treasury stock (2) . . . . . . . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . .
Total capitalization . . . . . . . . . . . . . . . . .

53,632

72,057

10,854

10,854

24,979

9,911

24,979
17,634
9,911

34,890

52,524

127,510
39,606
48,315

127,510
40,397
48,315

14,107

14,107

(1,804)
(2,304)
3,832
229,262
328,638

(1,804)
(2,304)
3,832
230,053
365,488

(1) Includes bonds payable and long-term loans, but excludes current portion of long-term loans.
(2) An aggregate of 211.0 million Shares, including 16.1 million Shares held by our subsidiaries.

52

THE SECURITIES MARKET OF TAIWAN

The information presented in this section has been extracted from publicly available documents that have
not been prepared or independently verified by us, the Managers or any of our respective affiliates or advisors in
connection with this offering. Reference to the ROC Financial Supervisory Commission, or ROC FSC, in this
section and section titled Foreign Investment and Exchange Controls in Taiwan include all of both the ROC
Securities and Exchange Commission, the ROC Securities and Futures Commission, and the ROC Financial
Supervisory Commission and its subdivision, ROC Securities and Futures Bureau.
In September 1960, the ROC government established the ROC Securities and Exchange Commission to
supervise and control all aspects of the existing domestic securities market and the TWSE began to take shape
soon thereafter. In the 1970s and the early 1980s, the ROC government implemented a number of steps
designed to upgrade the quality and importance of the ROC securities markets, such as encouraging listing on the
TWSE and establishing an over-the counter securities exchange. In the mid-1980s, the ROC government began
to revise its laws and regulations in a manner designed to facilitate the gradual internationalization of the ROC
securities markets. In 1997, the ROC Securities and Exchange Commission was renamed the ROC Securities and
Futures Commission. Effective July 1, 2004, the ROC Securities and Futures Commission has been renamed the
ROC Securities and Futures Bureau of the FSC, and its supervisory authority has been transferred from the
Ministry of Finance to the Financial Supervisory Commission, Executive Yuan.
The Taiwan Stock Exchange
In 1961, the TWSE was established to provide a marketplace for securities trading. The TWSE is a
corporation owned by government-controlled and private banks and enterprises. The TWSE is independent of the
entities transacting business through it, each of which pays to the TWSE a users fee. Subject to limited
exceptions, all transactions in listed securities by brokers, traders and integrated securities firms must be made
through the TWSE.
The TWSE commenced operations in 1962. During the early 1980s, the ROC FSC actively encouraged new
listings on the TWSE and the number of listed companies has grown from 119 in 1983 to 854 as of December 31,
2014. As of December 31, 2014, the market capitalization of companies listed on the TWSE was approximately
NT$26.9 trillion.
Historically, ROC companies have listed only shares and bonds on the TWSE. However, the ROC FSC has
encouraged companies to list other types of securities. In 1988, the Ministry of Finance permitted the issuance of
ROCs first exchangeable bonds. Since 1989, there have been offerings of domestic convertible bonds and
convertible preferred shares. In addition, beneficiary units evidencing beneficiary interests in closed-end
investment funds and bonds issued by super-national financial institutions are also listed on the TWSE or traded
on the Taipei Exchange (previously known as GTSM, which is discussed below). The ROC FSC also has
promulgated regulations which permit foreign issuers to list certain securities on the TWSE or Taipei Exchange.

The TWSE or Taipei Exchange considers the following factors when evaluating a company for listing:

the number and distribution of shareholders, including the diversification of such shareholders;

length of time in business;

amount of paid-in capital; and

profitability.

However, special listing criteria apply to technology companies and key businesses that are engaged in
national economic development.

53

The following table shows for the periods indicated information relating to the TWSE Index.

Period

No. of Listed
Companies at
Period End

Stock
Trading
Values
(in NT$
billions)

Index High

Index Low

Index at
Period End

375
404
437
462
531
584
638
669
697
691
688
698
718
741
758
790
809
838
854
858

12,907.6
37,241.2
29,619.0
29,291.0
30,526.6
18,354.9
21,874.0
20,333.2
23,875.4
18,818.9
23,900.4
33,043.9
26,115.4
29,680.5
28,218.7
26,197.4
20,238.2
18,940.9
21,898.5
6,721.6

6,982.81
10,116.84
9,277.09
8,608.91
10,202.20
6,104.20
6,462.30
6,142.32
7,034.10
6,575.53
7,823.72
9,809.88
9,295.20
8,188.11
8,972.50
9,145.35
8,144.04
8,623.43
9,569.17
9,973.1

4,690.22
6,820.35
6,251.38
5,475.00
4,614.60
3,446.30
3,850.04
4,139.50
5,316.87
5,632.97
6,257.80
7,344.56
4,089.93
4,242.61
7,071.67
6,633.33
6,894.66
7.616.64
8,264.48
9,048.3

6,933.94
8,187.27
6,418.43
8,448.84
4,739.09
5,551.24
4,452.45
5,890.69
6,139.69
6,548.34
7,823.70
8,506.28
4,592.22
8,188.11
8,972.50
7,072.08
7,699.50
8,611.51
9,307.26
9,820.1

1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 (through April 30, 2015) . . . . . . . . . . . . . . . . .

Source: TWSE; World Federation of Stock Exchanges (www.fibv.com) for Number of Listed Companies at the
Period End information.
The Taipei Exchange (ROC GreTai Securities Market)
To complement the TWSE, the GTSM was established in September 1982 on the initiative of the ROC FSC
to encourage the trading of securities of companies that do not qualify for listing on the TWSE and has been later
renamed as Taipei Exchange since February 24, 2015. As of December 31, 2014, 685 companies had listed
equity securities on the Taipei Exchange and the total market capitalization of those companies was NT$2,686.9
billion.
Price Limits, Commissions, Transaction Tax and Other Matters
The TWSE has placed limits on block trading and on the range of daily price movements. According to the
TWSEs block trading guidelines, transactions in one class of securities that involve 500 or more trading lots or
trading amounts of NT$15 million or more, and transactions involving five or more different classes of securities
and trading amounts of NT$15 million or more must be registered and executed in accordance with the
guidelines. Except for certain limited circumstances set forth in TWSE rules, fluctuations in the price of stock
traded on the TWSE are currently subject to a restriction of 7% above and below the previous day closing price
(or reference price set by the TWSE if the previous day closing price is not available because of lack of trading
activity). However, these restrictions have been modified from time to time by the ROC FSC based on market
conditions. The ROC FSC has announced that limitations on price fluctuations will be relaxed to 10% from
June 1, 2015 and the relevant regulations and rules has been amended accordingly by the TWSE on April 2,
2015. Brokerage commission can be set at any rate of the transaction price, provided that any rate exceeding

54

0.1425% shall be reported to the TWSE and notified to the client through an appropriate method before accepting
the order, and such notification record shall be retained. A securities transaction tax, currently levied at 0.3% of
the transaction price, is payable by the seller of equity securities. Such securities transaction taxes are withheld at
the time of the transaction giving rise to such tax. Sales of shares of companies listed on the TWSE are currently
sold in round lots of 1,000 shares. Investors who desire to sell less than 1,000 shares of a listed company
occasionally experience delays in effecting such sales.
Regulation and Supervision
The ROC FSC has extensive regulatory authority over public companies. Public companies are generally
required to obtain the deemed approval from the ROC FSC for all securities offerings. The ROC FSC has
promulgated regulations requiring, unless otherwise exempted, periodic reporting of financial and operating
information by all public companies. In addition, the ROC FSC establishes standards for financial reporting and
carries out licensing and supervision of participants in the ROC securities market.
The ROC FSC has responsibility for implementing ROC Securities and Exchange Act and for overall
administration of governmental policies in the ROC securities market. It has extensive regulatory authority over
the offering, issuance and trading of securities. In addition, ROC Securities and Exchange Act specifically
empowers the ROC FSC to promulgate necessary rules. ROC Securities and Exchange Act prohibits market
manipulation. For example, it permits an issuer to recover short-swing trading profits made through purchases
and sales within six months by directors, managerial personnel, supervisors, as well as the spouses, minor
children and nominees of these parties, and shareholders (together with their spouses, minor children and
nominees) who hold 10% or more of the shares of the issuer. ROC Securities and Exchange Act prohibits trading
by insiders based on non-public information that materially affects share price movement after the information
is confirmed and either prior to publication of such information or within 18 hours after publication of such
information. Insiders include:

directors, supervisors, managers, as well as the spouses, minor children and nominees of these parties,
and shareholders (together with their spouses, minor children and nominees) who hold 10% or more of
the issuing companys shares and any individual designated by a governmental or corporate director or
supervisor to act on its behalf;

any person who has learned material, non-public information due to an occupational or controlling
relationship with the issuing company;

any person who has discharged from the status or position in the first and second bullet points for not
more than six months; and

any person who has learned material, non-public information from any of the above.

Sanctions include imprisonment. In addition, damages may be awarded to persons injured by the
transaction. ROC Securities and Exchange Act also imposes criminal liability on certified public accountants and
lawyers who make false certifications in their examination and audit of an issuers contracts, reports and other
documents related to securities transactions. The ROC FSC regulations require that financial reports of listed
companies be audited by accounting firms consisting of at least three certified public accountants and be signed
by at least two certified public accountants.
In addition, ROC Securities and Exchange Act provides for civil liability for material misstatements or
omissions made by issuers and tender offerors. The ROC FSC does not have criminal or civil enforcement
powers under ROC Securities and Exchange Act. Criminal actions in connection with the ROC Securities and
Exchange Act may be pursued by government prosecutors, instead of the ROC FSC. Civil actions in connection
with the ROC Securities and Exchange Act may only be brought by plaintiffs who assert that they have suffered
damages. The ROC FSC is empowered to curb abuses and violations of laws and regulations only through
administrative measures including:

issuance of warnings;
55

temporary suspension of operation;

imposition of administrative fines; and

revocation of licenses.

In addition to providing a market for securities trading, the TWSE reviews applications by ROC issuers to
list securities on the TWSE. If issuers of listed securities violate laws and regulations or encounter significant
difficulties, the TWSE may, with reporting to the ROC FSC for record, delist the securities of these issuers.

56

FOREIGN INVESTMENT AND EXCHANGE CONTROLS IN TAIWAN

The information presented in this section has been extracted from publicly available documents that have
not been prepared or independently verified by us, the Managers or any of our respective affiliates or advisors in
connection with the Offering.
General
Historically, foreign investment in the ROC securities markets has been restricted. Since 1983, the
ROC government has periodically enacted legislation and adopted regulations to permit foreign investment in the
ROC securities market.
Regulations Governing Investment in Securities By Overseas Chinese and Foreign Nationals (the Foreign
Regulations), which was approved by the Executive Yuan on May 26, 1983 and amended on March 23, 2006,
and the Regulations Governing Mainland China Investors Securities Investments and Futures Trading in Taiwan
(the PRC Regulations), which was announced by the FSC on April 30, 2009 and amended on October 6, 2010,
are two of the major regulations governing foreign investment in securities and future trading in Taiwan.
Under the Foreign Regulations, foreign investors (other than PRC persons) are classified as either onshore
foreign investors or offshore foreign investors according to their respective geographical location. Unless
otherwise specified in the laws and regulations, both onshore and offshore foreign investors are allowed to invest
in ROC securities after they register with the TWSE. The Foreign Regulations further classify foreign investors
into foreign institutional investors and foreign individual investors. Foreign institutional investors refer to
those investors incorporated and registered in accordance with foreign laws outside of the ROC (i.e., offshore
foreign institutional investors) or their branches set up and recognized within the ROC (i.e., onshore foreign
institutional investors). According to the provisions of Foreign Regulations, offshore overseas Chinese and
foreign individual investors are subject to a maximum investment ceiling that will be separately determined by
the FSC after consultation with the Central Bank of the Republic of China (Taiwan) (the CBC). However,
currently, there is no maximum investment ceiling for offshore overseas Chinese and foreign individual investors
which has been determined by ROC FSC. On the other hand, foreign institutional investors are not subject to any
ceiling for investment in the ROC securities market.
In the past, PRC persons were prohibited from investing, whether directly or indirectly, in the ROC. The
PRC Regulations loosen these restrictions. Under the PRC Regulations, PRC qualified domestic institutional
investors (QDII) and other very limited persons who meet the qualifications set forth in the PRC Regulations
(collectively, the Qualified PRC Investor(s)), are allowed to invest in ROC securities (including less than
10% shareholding of an ROC company listed on TWSE or Taipei Exchange). Nevertheless, the total investment
amount of QDIIs cannot exceed US$500 million. In addition, QDIIs are currently prohibited from investing in
certain industries, and their investment in a given company is restricted to a certain percentage pursuant to a list
promulgated by the ROC FSC and amended from time to time. The custodians of QDIIs must apply with the
TWSE for the remittance amount of each QDII, which cannot exceed US$100 million, and QDII can only invest
in the ROC securities market with the amount approved by the TWSE. As to the investment restrictions for such
limited PRC persons are subject to rules and regulations further promulgated by the ROC authorities.
Overseas Corporate Bonds
Since 1989, the ROC FSC has approved a series of overseas bonds issued by ROC companies listed on the
TWSE in offerings outside the ROC. Under current ROC law, subject to ROC FSC approval, such overseas
corporate bonds (i) can be converted by bondholders into shares of ROC companies or (ii) may be converted into
depositary receipts issued by the same ROC company or by the issuing company of the exchange shares, in the
case of exchangeable bonds. A PRC holder of overseas convertible bonds may not convert such convertible
bonds into shares unless (i) it is a Qualified PRC Investor or (ii) if all the businesses of the issuer are not in the
57

negative list promulgated by the ROC FSC. If the shares converted from overseas convertible bonds account for
10% or more of the issuers shares, it shall obtain the approval of the Investment Commission of the Ministry of
Economic Affairs. However, Qualified PRC Investors are currently prohibited from investing in certain
industries, and their investment in a given company in certain other industries is restricted to a certain percentage
pursuant to a list promulgated by the FSC and amended from time to time. In addition, there are restrictions on
the remittance amount to or from Taiwan by each individual QDII and by QDIIs in the aggregate. Accordingly,
the qualification criteria for a PRC person to make investment, the restrictions on investment in certain industries
and the investment caps imposed by the FSC might cause a holder of the overseas convertible bonds who is a
PRC person to be unable to convert the bonds and hold the shares issuable upon conversion of the bonds. The
relevant regulations also permit public issuing companies to issue corporate debt in offerings outside the ROC.
Proceeds from the sale of the shares converted from overseas convertible bonds may be used for reinvestment in
securities listed on the TWSE or traded on the Taipei Exchange, subject to registration with the TWSE.
Under current ROC law, a non-ROC converting bondholder, when exercising his conversion right to convert
bonds into common shares, is required to register with the TWSE and appoint a local agent (with such
qualifications as are set by the FSC) to open a securities trading account with a local brokerage firm and an
NT dollar bank account, pay ROC taxes, remit funds, exercise rights relating to the securities and perform such
other matters as may be designated by such converting bondholder on behalf of and as agent for such converting
bondholder. Also, any such converting bondholder is also required to appoint a custodian bank to hold the
securities and any cash proceeds in safekeeping, to make confirmations, to settle trades and to report all relevant
information. In addition, such converting bondholder is required to appoint a tax guarantor for filing tax returns
and making tax payments. Without meeting these requirements, the converting holder would not be able to
receive, hold, sell or otherwise transfer the shares into which the overseas bonds may have been converted on the
TWSE or otherwise.
Unless otherwise limited by the CBC, an ROC company may, without obtaining further approvals from the
CBC or any other government authority of the ROC, convert NT dollars to other non-ROC currencies, including
U.S. dollars, for making payments in respect of redemption of the bonds or repayment of principal of and interest
on the bonds. A non-ROC converting bondholder may, through its local agent and without obtaining prior
approval from the CBC, convert into foreign currencies net proceeds realized from the sale of converted common
shares or any stock dividends relating to such shares, or any cash dividend or other cash distribution in respect of
such common shares. However, a converting bondholder must obtain prior approval from the CBC on a
payment-by-payment basis for conversion from NT dollars into other currencies in respect of the proceeds from
the sale of subscription rights for newly issued shares if the proceeds are in excess of US$100,000 per remittance.
Other Foreign Investment and Other PRC Investment
In addition to investments permitted under the Foreign Regulations and the PRC Regulations, foreign
investors, who wish to make direct investments in the shares of ROC companies (or 10% or more shareholding of
an ROC company listed on TWSE or Taipei Exchange) in any single investment tranche, and PRC investors who
wish to make direct investment in the shares of ROC private companies or investment, in any single tranche or
cumulatively, in 10% or more shareholding of an ROC company listed on TWSE or Taipei Exchange in certain
industries in the Positive List, as promulgated by the Executive Yuan, are required to submit an Investment
Approval application to the Investment Commission of the ROC Ministry of Economic Affairs or other
government authority. The Investment Commission or such other government authority reviews each Investment
Approval application and approves or disapproves each application after consultation with other governmental
agencies (such as the CBC and the FSC).
Under current law, any non-ROC person possessing an Investment Approval may remit capital for the
approved investment and is entitled to repatriate annual net profits, interest and cash dividends attributable to
such investment. Dividends attributable to such investment may be repatriated upon submitting certain required
58

documents to the remitting bank, and investment capital and capital gains attributable to such investment may be
repatriated after approvals of the Investment Commission or other authorities have been obtained.
In addition to the general restriction against direct investment by non-ROC persons in securities of
ROC companies, foreign investors (except in certain limited cases) are currently prohibited from investing in
certain industries in the ROC pursuant to a Negative List, as amended by the Executive Yuan. The prohibition on
foreign investment in the prohibited industries specified in the Negative List is absolute in the absence of specific
exemption from the application of the Negative List. Pursuant to the Negative List, certain other industries are
restricted so that foreign investors (except in certain limited cases) may invest in such industries only up to a
specified level and with the specific approval of the relevant competent authority which is responsible for
enforcing the relevant legislation which the Negative List is intended to implement.
On the other hand, in addition to the general restriction against direct investment by PRC investors in
securities of ROC companies, PRC investors may only invest in certain industries in the Positive List, as
promulgated by the Executive Yuan. In addition, PRC investor who wishes to be elected as an ROC companys
directors or supervisors shall also submit an Investment Approval application to the Investment Commission of
the ROC Ministry of Economic Affairs or other government authority for approval.
Exchange Controls
The ROC Foreign Exchange Control Statute and regulations provide that all foreign exchange transactions
must be executed by banks designated by the FSC and the CBC to handle foreign exchange transactions. 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 freely from the designated foreign
exchange banks.
Aside from trade-related foreign exchange transactions, ROC companies and individual residents of the
ROC reaching the age of 20 years old may, without foreign exchange approval, 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. In addition, all enterprises are required to register all medium- and long-term foreign
debt with the CBC.
In addition, a foreign person may, subject to certain requirements but without foreign exchange approval,
remit to and from Taiwan foreign currencies of up to US$100,000 (or its equivalent) per remittance if the
required documentation is provided to the ROC authorities. This limit applies only to remittances involving a
conversion between NT dollars and U.S. dollars or other foreign currencies and vice versa.

59

ROC TAXATION
The following is a summary of certain ROC tax considerations that may be relevant to Bondholders or
holders of our Shares who are (i) individuals who are not citizens of the ROC and who are not physically present
in the ROC for 183 days or more within a calendar year (Non-ROC Individuals) or (ii) corporations that are
incorporated and non-corporate bodies that are established outside the ROC for profit which do not have a
permanent establishment in the ROC (Non-ROC Entities, collectively with Non-ROC Individuals, NonROC Holders). The summary does not purport to be a comprehensive description of all of the tax considerations
that may be relevant to a decision to purchase Bonds and is based on tax laws of the ROC in effect on the date of
this Offering Memorandum which are subject to change.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN ADVISORS CONCERNING THE
TAX CONSEQUENCES OF AN INVESTMENT IN BONDS OR SHARES.
Bonds
Interest
Payments of interest or premium, if any, on the Bonds to a Non-ROC Holder are subject to ROC
withholding tax, currently at a rate of 15%, at the time of payment. We have agreed to pay additional amounts in
respect of such withholding tax on the payments of interest or premium, if any. See Terms and Conditions of the
Bonds.
Sale
Securities transaction tax will be imposed on the sale of bonds issued by ROC companies at the rate of
0.1%. However, this securities transaction tax is not applicable to the sale of the Bonds outside of the ROC
according to a letter issued by ROC Ministry of Finance, dated January 17, 2001.
Gains on sale of property in the ROC are generally subject to ROC income tax. Under current ROC law,
however, capital gains from the sale of corporate bonds issued by ROC companies are exempt from income tax.
This exemption applies to capital gains derived from the sale of the Bonds.
Conversion into Shares
The conversion of Bonds into Shares will not be taxable to Non-ROC Holders under ROC income tax law.
Shares
Dividends
Dividends, whether in cash or stock, declared by us out of retained earnings and distributed to a Non-ROC
Holder in respect of our Shares are subject to ROC withholding tax, currently at the rate of 20%, on the amount
of the distribution (in the case of cash dividends) or on the par value of the Shares (in the case of stock dividends)
unless a lower withholding rate is provided under an applicable tax treaty between the ROC and the jurisdiction
where the Non-ROC Holder is a resident.
A 10% retained earnings tax is imposed on an ROC companys after-tax earnings generated after January 1,
1998 that are not distributed in the following year. The retained earnings tax so paid reduces the retained
earnings available for future distribution. When we declares dividends out of those retained earnings, up to a
maximum amount of half of the amount of such tax of the declared dividends will be credited against the 20%
withholding tax imposed on a dividend to the Non-ROC Holders from January 1, 2015 onwards.
Sale
Securities transaction tax is payable and withheld by the seller at the rate of 0.3% of the transaction price
upon a sale of our Shares.
60

Starting from January 1, 2013, Non-ROC Entities remain exempt from income tax on capital gains from the
sale or disposal of the Shares. However, Non-ROC Individuals are now subject to ROC income tax on capital
gains from the sale or disposal of the Shares. Capital loss incurred therefrom can be deducted from capital gains
in calculating the net capital gain and income tax liability, but cannot be carried forward to subsequent years.
Capital gains are taxed at a flat rate of 15%. In addition, only 50% of the net capital gains are subject to income
tax if the Non-ROC Individuals has held the underlying Shares for one year or longer. As a result, the tax agent
of each Non-ROC Individuals should pay the income tax payable, if any, and file an income tax return in
May 2015 for the capital gains that the Non-ROC Individuals generates in year 2014. However, if Non-ROC
Individuals leave Taiwan prior to the end of the tax year, they shall instead file departure returns before leaving.
Subscription Rights
Distributions of statutory subscription rights for our Shares in compliance with the Company Act are not
subject to ROC tax. Proceeds derived from sales of statutory subscription rights evidenced by securities are
subject to securities transaction tax, currently at the rate of 0.3% of the gross amount received, as well as the
ROC securities income tax. Proceeds derived from sales of statutory subscription rights that are not evidenced by
securities are subject to capital gains tax at the rate of 20% of the gross amount received for Non-ROC Holders.
Subject to compliance with ROC law, we have the sole discretion to determine whether statutory subscription
rights are evidenced by securities or not.
Inheritance Tax and Gift Tax
ROC inheritance tax is payable on any property within the ROC of a deceased Non-ROC individual, and
ROC gift tax is payable on any property within the ROC donated by any such person. ROC inheritance tax and
ROC gift tax are payable at a fixed rate of 10%. Under ROC Inheritance and Gift Tax Law, bonds and shares
issued by ROC companies are deemed located in the ROC irrespective of the location of the owner.
Tax Treaties
The United States does not have an income tax treaty with the ROC. At present, the ROC has entered into
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, Thailand, Kiribati, Luxembourg, and
Austria which may limit the rate of Republic of China withholding tax on dividends paid with respect to common
shares in Taiwan companies.
Tax Guarantor
Non-ROC Bondholders, including the PRC Bondholders meeting the applicable requirements under ROC
laws and regulations, who convert their Bonds into our Shares and register as our shareholder are required under
current ROC laws and regulations to appoint an agent, also referred to as a Tax Guarantor in this Offering
Memorandum, in the ROC for filing tax returns and making tax payments on their behalf. A Tax Guarantor will
be required to meet the qualifications set by the ROC Ministry of Finance and will act as the guarantor of the
holders tax payment obligations. Evidence of the appointment of a Tax Guarantor and the approval of such
appointment or tax clearance certification are required as conditions to repatriating the holders profits derived
from the sale of Shares. There can be no assurance that holders will be able to appoint and obtain approval for a
Tax Guarantor in a timely manner.

61

PLAN OF DISTRIBUTION
Under the terms and subject to the conditions contained in a Purchase Agreement dated May 11, 2015, the
initial purchasers named below (the Initial Purchasers) have severally agreed to purchase, and we have agreed
to sell to them, the principal amount of the Bonds set forth opposite to their respective names below at a purchase
price of 100% of such principal amount:
Principal Amount
of the Bonds

Initial Purchasers

Credit Suisse (Hong Kong) Limited . . . . . . . . . . . . .

Morgan Stanley Services Pty Limited . . . . . . . . . . . .
The Hongkong and Shanghai Banking Corporation
Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CIMB Bank (L) Limited . . . . . . . . . . . . . . . . . . . . . .

US$312,000,000
129,000,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

US$600,000,000

129,000,000
30,000,000

The Initial Purchasers are offering the Bonds subject to their acceptance of the Bonds from us and subject to
prior sale. The Purchase Agreement provides that the several obligations of the Initial Purchasers to pay for and
accept delivery of the Bonds are subject to approval of certain legal matters by their counsel and to certain other
conditions. The Initial Purchasers are obligated to take and pay for all of the Bonds offered by this Offering
Memorandum if any such Bonds are taken.
The Purchase Agreement may be terminated by the Initial Purchasers in certain circumstances prior to
payment for the Bonds to us. We have agreed to indemnify the Initial Purchasers against certain liabilities in
connection with the issue of the Bonds.
We have agreed that, without the prior written consent of Credit Suisse, Morgan Stanley and HSBC on
behalf of the Initial Purchasers, during the period commencing on the date of the Purchase Agreement and ending
90 days after the date of this Offering Memorandum, we will not (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, publicly announce an intention to do any of the foregoing, or otherwise transfer or dispose of,
directly or indirectly, any Shares or ADSs, or any securities convertible into or exercisable or exchangeable for
Shares or ADSs, or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of the Shares or ADSs, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Shares, ADSs or such other securities, in cash or otherwise,
provided however, that the aforementioned arrangements will not be applicable to the (a) related transfer of
Shares or issuance of ADSs upon the conversion of the Bonds, or the issuance of Shares in connection therewith,
(b) transactions relating to ADSs, Shares or other securities acquired in open market transactions after the
completion of the Offering, or (c) the issuance and sale of ADSs or Shares pursuant to our employee stock bonus,
option or other incentive plan. We have further agreed that during the period ending 90 days after the date of this
Offering Memorandum, we will not, subject to certain exceptions (including any issuance of ADSs in connection
with a conversion sale program pursuant to Rule 144 of, or any available registration exemption under, the
Securities Act) (1) provide publicly disclosable assistance, including making public filings with the SEC and
certain regulatory authorities in the ROC and amending the Deposit Agreement to facilitate the issuance of
additional ADSs other than those currently provided therein, to any other person (including our shareholders
seeking to effect any transaction described above), (2) nor will we make any demand for or exercise any right
with respect to the registration of any ADSs or Shares or any security convertible into or exercisable or
exchangeable for ADSs or Shares.
Although we have received approval in-principle for the listing of the Bonds on the SGX-ST, the Bonds are
a new issue of securities with no established trading market.
62

In order to facilitate the offering of the Bonds, the Representatives may engage in transactions that stabilize,
maintain or otherwise affect the price of the Bonds. Specifically, the Representatives may bid for and purchase
Bonds in the open market, which may stabilize or maintain the market price of the Bonds above independent
market levels. The Representatives are not required to engage in such activities and may end such activities at
any time.
The offering of the Bonds and the issuance of the Shares upon conversion of the Bonds have not been, and
will not be, registered under the Securities Act, and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in certain transactions exempt from the registration
requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by
Regulation S.
The Initial Purchasers have agreed to pay or reimburse us for certain third party expenses in connection with
the offering of the Bonds.
In the ordinary course of their respective businesses, the Initial Purchasers and their affiliates have engaged,
and may in the future engage, in commercial banking and/or investment banking transactions with our company
and our affiliates. Affiliates of any of the Initial Purchasers may purchase Bonds for their own respective
account, subject to the terms described in this offering memorandum.
Each Initial Purchaser has represented and agreed that, except as permitted by the Purchase Agreement, it
will offer or sell the Bonds (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later
of the commencement of this offering and the latest closing date of this offering, only in accordance with Rule
903 of Regulation S; accordingly, neither the Initial Purchasers, their affiliates nor any persons acting on their
behalf have engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with
respect to the Bonds, and the Initial Purchasers, their affiliates and any such persons have complied and will
comply with the offering restrictions requirement of Regulation S.
United Kingdom
Each of the Initial Purchasers: (i) (A) is a person whose ordinary activities involve it in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of its business and (B) has not
offered or sold and will not offer or sell the Bonds other than to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of its
businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or
agent) for the purposes of its businesses where the issue of the Bonds would otherwise constitute a contravention
of Section 19 of the Financial Services and Markets Act of 2000 (the FSMA) by the Company; (ii) has only
communicated or caused to be communicated and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA)
received by it in connection with the issue or sale of the Bonds in circumstances in which Section 21(1) of the
FSMA does not apply to the Company; and (iii) has complied and will comply with all applicable provisions of
the FSMA with respect to anything done by it in relation to the Bonds in, from or otherwise involving the
United Kingdom.
Hong Kong
Each of the Initial Purchasers has not (i) offered or sold and will not offer or sell in Hong Kong, by means of
any document, any Bonds other than (A) to professional investors as defined in the Securities and Futures
Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (B) in other circumstances
which do not result in the document being a prospectus as defined in the Companies (Winding Up and
Miscellaneous Provision) Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public
within the meaning of that Ordinance; and (ii) issued or had in its possession for the purposes of issue, and will
63

not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any
advertisement, invitation or document relating to the Bonds, which is directed at, or the contents of which are
likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws
of Hong Kong) other than with respect to the Bonds which are or are intended to be disposed of only to persons
outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance and
any rules made under that Ordinance.
Singapore
Each of the Initial Purchasers acknowledges that this Offering Memorandum has not been registered as a
prospectus with the Monetary Authority of Singapore. Accordingly, each of the Initial Purchasers has represented
and agreed that it has not offered or sold any Bonds or caused the Bonds to be made the subject of an invitation
for subscription or purchase nor will it offer or sell the Bonds or cause the Bonds to be made the subject of an
invitation for subscription or purchase, nor has it circulated or distributed nor will it circulate or distribute this
Base Prospectus or any other document or material in connection with the offer or sale, or invitation for
subscription or purchase, of the Bonds, whether directly or indirectly, to persons in Singapore other than (i) to an
institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the SFA),
(ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance
with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with
the conditions of, any other applicable provision of the SFA.
This Offering Memorandum has not been registered as a prospectus with the Monetary Authority of
Singapore. Accordingly, this Offering Memorandum and any other document or material in connection with the
offer or sale, or invitation for subscription or purchase, of Bonds may not be circulated or distributed, nor may
Bonds be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or
indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the SFA, (ii) to
a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with
the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
Where the Bonds are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole
business of which is to hold investments and the entire share capital of which is owned by one or more
individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and
each beneficiary of the trust is an individual who is an accredited investor,
securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries rights and interest
(howsoever described) in that trust shall not be transferred within six months after that corporation or that trust
has acquired the Bonds pursuant to an offer made under Section 275 of the SFA except:
(1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any
person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
(2) where no consideration is or will be given for the transfer;
(3) where the transfer is by operation of law;
(4) as specified in Section 276(7) of the SFA; or
(5) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and
Debentures) Regulations 2005 of Singapore.
64

Japan
Each of the Initial Purchasers agrees that the Bonds have not been and will not be registered under the
Securities and Exchange Law of Japan (the Securities and Exchange Law), and it has not offered or sold and
will not offer or sell, directly or indirectly, the Bonds in Japan or to or for the account of any resident of Japan,
except (A) pursuant to an exemption from the registration requirements of the Securities and Exchange Law and
(B) in compliance with any other applicable requirements of Japanese law.
France
Each of the Initial Purchasers acknowledges and agrees that offers and sales of the Bonds will only be made
in France to a limited number of investors (cercle restreint dinvestisseurs) acting for its own accounts and/or
qualified investors (investisseurs qualifis) acting for its own accounts, in each case in accordance with Article
L.411-2 of the Code Montaire et Financier and Decret no. 98-880 dated October 1, 1998; and that this Offering
Memorandum has not been and will not be submitted to the Commission des Oprations de Bourse. Neither this
Offering Memorandum nor any other offering material will be distributed to the public in France and neither the
Bonds nor the Common Shares will be offered or sold, directly or indirectly, to the public in France.
Netherlands
Each of the Initial Purchasers represents and agrees that it has not offered, transferred, delivered or sold and
will not offer, transfer, deliver or sell any Bonds or Common Shares in or from Netherlands as part of its initial
distribution or as part of any re-offering, and that it will not distribute this Offering Memorandum or any other
document in respect of the offering in or from the Netherlands, other than to individuals or legal entities, who or
which trade or invest in securities in the conduct of its profession or trade (which include banks, investment
banks, securities firms, insurance companies, pension funds, other institutional investors and treasury
departments and finance companies of large enterprises). In addition, transfer requirements may apply to Bonds
that qualify as savings certificates as defined in the Savings Certificates Act (Wet inzake spaarbewijzen).
Italy
Each of the Initial Purchasers represents and agrees that this Offering Memorandum does not constitute an
offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any
person to whom it is unlawful to make such offer or solicitation. This Offering Memorandum has not been
submitted to the clearance procedure of Commissione Nazionale per le Societ e la Borsa (CONSOB) and may
not be used in connection with any offering of the notes in Italy other than to Professional Investors, as defined
in Article 31, paragraph 2 of CONSOB Regulation No. 11522 of July 1, 1998, or in such other circumstances
where an exemption from compliance with the solicitation restrictions under Legislative Decree No. 58 of
February 24, 1998 or CONSOB Regulation No. 11971 of May 14, 1999 applies.
Peoples Republic of China
Each of the Initial Purchasers has represented, warranted and agreed that the Bonds are not being offered or
sold and may not be offered or sold, directly or indirectly, in the Peoples Republic of China (for such purposes,
not including the Hong Kong and Macau Special Administrative Regions or Republic of China).
Under current ROC law, regulations and policies, except under very limited circumstances, PRC persons are
not permitted to hold the Shares or to register as shareholders of our company. Under the Regulations Governing
Securities Investment and Futures Trading in Taiwan by Mainland Area Investors promulgated by the ROC
Executive Yuan on April 30, 2009 and amended on October 6, 2010, only Qualified PRC Investors are permitted
to own certain securities of ROC listed companies provided that their shareholdings and the industries in which
they are allowed to invest are subject to certain restrictions set forth in the regulations and the applicable rulings
65

mentioned above. In addition, a Qualified PRC Investor will be required to apply for a separate approval if its
investment, individually or in aggregate, amounts to or exceeds 10% of the shares of a ROC listed company.
Republic of China
Each of the Initial Purchasers has not offered or sold, and agrees not to offer or sell, any Bonds, directly or
indirectly in the ROC.
Under applicable ROC laws and regulations, we and the Initial Purchasers are prohibited from offering and
selling the Bonds to (i) any of our strategic investors or (ii) related parties as defined in the Regulations
Governing Preparation of Financial Reports by Securities Issuers or as specified in Sections 36 and 43-1 of the
Taiwan Securities Association Rules Governing Underwriting and Resale of Securities by Securities Firms.
Investors who purchase the Bonds are deemed to have represented to us and to the Initial Purchasers that (i) they
are not one of our strategic investors or a related party and (ii) the source of the funds used to purchase the
Bonds are in compliance with Article 9.1(9) of the ROC Regulations Governing the Offering and Issuance of
Overseas Securities by Issuers.

66

LEGAL MATTERS
We are represented by Chen & Lin Attorneys-at-Law regarding matters of the law of the Republic of China.
The Initial Purchasers are represented by Simpson Thacher & Bartlett LLP regarding matters of New York State
and United States federal laws. Simpson Thacher & Bartlett LLP will pass on the validity of the Bonds and
Chen & Lin Attorneys-at-Law will pass upon the validity of the Shares.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our consolidated financial statements appearing in the Year 2014 Annual Report have been audited by
Ernst & Young, independent registered public accounting firm, as set forth in their report thereon, included
therein and incorporated by reference herein.
The consent filed with the U.S. Securities and Exchange Commission under Section 7 of the Securities Act,
as incorporated by reference herein, is applicable only to transactions involving securities registered under the
Securities Act. As the Notes have not been and will not be registered under the Securities Act, Ernst & Young
has not filed a consent under Section 7 of the Securities Act with regards to this Offering.
Ernst & Young is located at 9th Floor, International Trade Building, Taipei World Trade Center, 333
Keelung Road, Section 1, Taipei 110, Taiwan, Republic of China. They are a member of the Taiwan CPA
Association.

67

GENERAL INFORMATION
1. Authorizations. The offering of the Bonds and the issuance of Shares issuable upon conversion of the
Bonds was authorized and approved by our board of directors at a meeting held on March 18, 2015. All consents,
approvals, authorizations or other orders required under the prevailing laws of the ROC have been given or
obtained for the offer, issue and sale of the Bonds. A copy of this Offering Memorandum will be filed with the
ROC FSC subsequent to the closing of this offering.
2. Clearance. The Bonds have been accepted for clearance through the facilities of the Euroclear and
Clearstream. Certain information about the Bonds is set forth below:
Common Code number

ISIN number

1228110000

XS1228110000

3. Listing and Trading. We have received approval in-principle for the listing of the Bonds on the
SGX-ST. As long as the Bonds are listed on the SGX-ST and the rules of the SGX-ST so require, we will appoint
and maintain a paying agent in Singapore, where the Bonds may be presented or surrendered for payment or
redemption, in the event that the Global Bond is exchanged for certificates in definitive form. In addition, in the
event that the Global Bond is exchanged for certificates in definitive form, announcement of such exchange shall
be made by or on our behalf through the SGX-ST and such announcement will include all material information
with respect to the delivery of the Certificates in definitive form, including details of the paying agent in
Singapore.
4. Material Change. Except as disclosed in this Offering Memorandum, there has been no significant
adverse change in our financial position or prospects since March 31, 2015, the date of the latest unaudited
consolidated financial statements.
5. Litigation. Except as otherwise disclosed in this Offering Memorandum, neither we nor any of our
subsidiaries is involved in any litigation or arbitration proceedings that may have, or have had during the
12 months preceding the date of this Offering Memorandum, a significant adverse effect on the financial position
of our company or our subsidiaries, nor are we or any of our subsidiaries aware that any such proceedings are
pending or threatened.

68

REGISTERED OFFICE OF THE ISSUER

United Microelectronics Corporation
No. 3 Li-Hsin Road II
Hsinchu Science Park
Hsinchu, Taiwan
Republic of China
INDEPENDENT AUDITORS
Ernst & Young
9th Floor, International Trade Building
Taipei World Trade Center
333 Keelung Road, Section 1
Taipei 110, Taiwan
Republic of China
REGISTRAR, PRINCIPAL PAYING,
CONVERSION AND TRANSFER AGENT

TRUSTEE
Citicorp International Limited
39th Floor, Citibank Tower
Citibank Plaza
3 Garden Road, Central
Hong Kong

Citibank, N.A., London Branch

c/o Citibank, N.A., Dublin
DUB-01-11
Ground Floor
1 North Wall Quay
Dubin 1
Ireland

PAYING, CONVERSION AND TRANSFER AGENT

Citibank, N.A., London Branch
c/o Citibank, N.A., Dublin
DUB-01-11
Ground Floor
1 North Wall Quay
Dubin 1
Ireland
LEGAL ADVISERS
To the Issuer
as to Republic of China law

To the Initial Purchasers

as to United States law

Chen & Lin Attorneys-at-Law

Bank Tower, 12th Floor
205 Tun Hwa North Road
Taipei 105, Taiwan

Simpson Thacher & Bartlett LLP

ICBC Tower
35th Floor
3 Garden Road, Central
Hong Kong