The Company, United Microelectronics Corporation (UMC) and other parties have entered into a joint venture to construct a wafer fabrication facility in Taiwan, known as United Silicon Inc. (USIC). The Company invested an additional $67.4 million in USIC during fiscal 1998 to bring the total cumulative investment to $101.7 million. The Company currently holds a 25% equity ownership and the right to receive 31.25% of the wafer capacity from this facility. UMC has committed to and is supplying the Company with wafers manufactured in an existing facility until capacity is available in the USIC facility. The Company is accounting for this investment using the equity method. To date, USIC's net income has resulted primarily from favorable foreign currency exchange gains as well as interest earned on its investment portfolio. Through the second quarter of fiscal 1998, equity income was immaterial and remained classified in "Interest income and other." See further discussion in Note 6 of Notes to Consolidated Financial Statements.

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