UMC founder and chairman Robert Tsao has resigned amid wider allegations of financial mismanagment.
Tsao announced on 29 December that he was leaving, citing meddling by the Taiwanese government and scrutiny of his company's business affairs for his planned departure.
The next day, the company "absolutely refuted" a media report that claimed vice-president Peter Chang had sold UMC shares for personal profit with insider knowledge.
Tsao's resignation is the latest salvo in an ongoing battle between the company and government officials in Taiwan over alleged illegal investments in a Chinese chip maker. UMC ran afoul of Taiwanese regulators in February, when police raided UMC offices in Taipei and Hsinchu, and detained a number of Taiwanese employees of Chinese chip maker He Jian Technology. The government has been gathering evidence against UMC that it invested in He Jian without applying for permission to do so, which is illegal in Taiwan.
Recently, the Taiwan Stock Exchange fined the company for its failure to report accounting errors in a timely manner.
Taiwan carefully controls chip investments to China, fearing it could lead to job losses on the island or that its technology could be used to bolster Chinese military prowess. The two separated in 1949 amid civil war, and Beijing has long threatened the use of force to take the island if it moves toward independence.
Last month, UMC restated past financial statements after the US Securities and Exchange Commission requested it rework full year earnings for 2002 through 2004 because they didn't conform to US accounting regulations. But UMC made no changes to financial statements based on Taiwanese accounting standards.
UMC released a statement regarding the planned changes to its US financial statements after US stock markets closed, but failed to notify Taiwanese shareholders in the local language until the next morning, over an hour after the Taiwanese exchange had opened, sparking a fine.
UMC says it has done nothing wrong. It issued an open letter in Taiwanese newspapers lambasting government interference into its affairs, insinuating the fine was politically motivated and lamenting the "unreasonable" attention given to its financial restatements.
The chip maker also questioned if politics had made Taiwan too chaotic, and suggested it might de-list its stock from the island's exchange.