July 11, 1996

To the Venturers and USC:

This letter agreement  clarifies the Stock Purchase  Agreement  ("SPA") among us
dated July 11, 1996 as follows:

         -        The  purchase  price  per share  under  the SPA is New  Taiwan
                  Dollars Ten (NT$10) per share, as stated in Paragraph 1.1.

         -        The option exercise price under Paragraph  5.1(b) is NT$10 per
                  share plus interest, as set forth in that Paragraph.

         -        The "Share %" column in the table in  Paragraph  1.2  reflects
                  the  correct  share  ownership  of each party,  assuming  full
                  exercise by both S3 and Alliance of their  options to purchase
                  under Paragraph 5.1(b).

         -        The  amount to be paid by a party for its shares is the number
                  of shares  purchased  times the applicable  purchase price per
                  share  (NT$10 for new  purchases  and NT$10 plus  interest for
                  option exercises).

         -        Discrepancies between the foregoing and the payment amounts in
                  the tables in  Paragraphs  1.2 and 1.3 are the result of using
                  rounded-off  amounts in the tables and are not  intended to be
                  substantive.

CONFIRMED AND AGREED:

Alliance Semiconductor Corporation

/s/ N. D. Reddy
- ---------------
N.D. Reddy, President

S3 Incorporated

/s/ Terry Holdt
- ---------------
Terry Holdt, President

United Microelectronics Corporation

/s/ John Hsuan
- --------------
John Hsuan, President

United Semiconductor Corporation

/s/ Ing Dar Liu
- ---------------
Ing Dar Liu, President



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