STATS ChipPAC Reports Second Quarter 2007 Results

UNITED STATES -- (MARKET WIRE) -- Jul 25, 2007 -- SINGAPORE -- 7/26/2007 -- STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (NASDAQ: STTS) (SGX-ST: STATSChP), a leading independent semiconductor test and advanced packaging service provider, today announced results for the second quarter 2007.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "Our second quarter was impacted by weak demand from certain large customers. As a result, our revenue declined about 5.2% from prior quarter. In general, we saw strong growth in our consumer and multi-applications market in applications like NAND flash, portable multimedia devices, digital TV and camera. Wireless communications were generally strong. Our personal computer business was weaker but improved towards the end of the second quarter on recovery of storage devices and graphics chipsets."

Revenue for the second quarter of 2007 decreased 11.5% to $370.2 million, compared to $418.1 million in the second quarter of 2006. This represents a sequential decline of 5.2% compared to the first quarter of 2007. Net income for the second quarter of 2007 was $7.4 million or $0.04 per diluted ADS, compared to net income of $18.0 million or $0.09 per diluted ADS in the second quarter of 2006. Net income for the second quarter of 2007 included approximately $2.0 million in share-based compensation expense as required under SFAS 123(R), $4.1 million in non-recurring expenses related to the tender offer from Singapore Technologies Semiconductors Pte Ltd, a wholly owned subsidiary of Temasek Holdings (Private) Limited, $1.7 million in impairment on the Company's assets used to manufacture discrete power packages that are classified as held for sale and $1.0 million in restructuring expenses.

Tham Kah Locke, acting Chief Financial Officer of STATS ChipPAC said, "We continue to focus our capital spending on strategic customer programs and to emphasize the generation of cash flow from our operations. In the second quarter of 2007, we spent approximately $55.4 million in capital expenditures, which was 15.0% of revenue compared to 26.9% of revenue in the second quarter of 2006. Gross margin in this quarter was 18.1% compared to 19.9% in prior quarter. The margin declined due to lower revenue."

Outlook

Tan Lay Koon commented, "For the third quarter, we expect revenue to be approximately in the range of $389.0 million to $408.0 million or in the range of 5% to 10% higher than the second quarter of 2007, with US GAAP net income in the range of $18.0 million to $24.0 million, which represents US GAAP net income per diluted ADS of $0.08 to $0.11, including the impact of approximately $0.01 per diluted ADS for the expensing of share-based compensation."

Investor Conference Call / Webcast Details

A conference call has been scheduled for 8:00 a.m. in Singapore on Thursday, July 26, 2007. This will be 8:00 p.m. in New York on Wednesday, July 25, 2007. During the call, time will be set aside for analysts and interested investors to ask questions of executive officers.

The call may be accessed by dialing +1-201-689-8560. A live webcast of the conference call will be available on STATS ChipPAC's website at www.statschippac.com. A replay of the call will be available 2 hours after the live call through noon on Thursday, August 2, 2007 (in Singapore) or midnight on Wednesday, August 1, 2007 (in New York) at www.statschippac.com and by telephone at +1-201-612-7415. The account number to access the replay is 3055 and the conference ID number is 246519.

About STATS ChipPAC Ltd.

STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (NASDAQ: STTS) (SGX-ST: STATSChP) is a leading service provider of semiconductor packaging design, assembly, test and distribution solutions. A trusted partner and supplier to leading semiconductor companies worldwide, STATS ChipPAC provides fully integrated, multi-site, end-to-end packaging and testing solutions that bring products to the market faster. Our customers are some of the largest wafer foundries, integrated device manufacturers (IDMs) and fabless companies in the United States, Europe and Asia. STATS ChipPAC is a leader in mixed signal testing and advanced packaging technology for semiconductors used in diverse end market applications including communications, power, digital consumer and computing. With advanced process technology capabilities and a global manufacturing presence spanning Singapore, South Korea, China, Malaysia and Taiwan, STATS ChipPAC has a reputation for providing dependable, high quality test and packaging solutions. The Company's customer support offices are centered in the United States (California's Silicon Valley, Arizona, Texas, Massachusetts, Colorado and North Carolina). Our offices outside the United States are located in South Korea, Singapore, China, Malaysia, Taiwan, Japan, the Netherlands and United Kingdom. STATS ChipPAC's facilities include those of its subsidiary, Winstek Semiconductor Corporation, in Hsinchu District, Taiwan. These facilities offer new product introduction support, pre-production wafer sort, final test, packaging and other high volume preparatory services. Together with our research and development centers in South Korea, Singapore, Malaysia, China, Taiwan and the United States as well as test facilities in the United States, this forms a global network providing dedicated test engineering development and product engineering support for customers from design to volume production. STATS ChipPAC is listed on both the Nasdaq Stock Market (NASDAQ) and the Singapore Exchange Securities Trading Limited (SGX-ST). In addition, STATS ChipPAC is also included in the Morgan Stanley Capital International (MSCI) Index. Further information is available at www.statschippac.com. Information contained in this website does not constitute a part of this release.

Forward-Looking Statements

Certain statements in this release, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this release. Factors that could cause actual results to differ from our expectations include, but are not limited to, general business and economic conditions and the state of the semiconductor industry; level of competition; demand for end-use applications products such as communications equipment and personal computers; decisions by customers to discontinue outsourcing of test and packaging services; reliance on a small group of principal customers; continued success in technological innovations; availability of financing; pricing pressures including declines in average selling prices; ability to meet specific conditions imposed for the continued trading or listing of the Company's securities on the SGX-ST and the NASDAQ; our substantial level of indebtedness; potential impairment charges; adverse tax and other financial consequences if the South Korean taxing authorities do not agree with our interpretation of the applicable tax laws; ability to develop and protect our intellectual property; rescheduling or canceling of customer orders; changes in products mix; intellectual property rights disputes and litigation; capacity utilization; delays in acquiring or installing new equipment; limitations imposed by our financing arrangements which may limit our ability to maintain and grow our business; changes in customer order patterns; shortages in supply of key components; disruption of our operations; loss of key management or other personnel; defects or malfunctions in our testing equipment or packages; changes in environmental laws and regulations; exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; significant ownership by Temasek Holdings that may result in conflicting interests with Temasek Holdings and our affiliates; unsuccessful acquisitions and investments in other companies and businesses; our ability to continue to successfully integrate the operations of the former separate STATS and ChipPAC companies and their employees; labor union problems in South Korea; uncertainties of conducting business in China; natural calamities and disasters, including outbreaks of epidemics and communicable diseases; and other risks described from time to time in the Company's SEC filings, including its annual report on Form 20-F dated March 12, 2007. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


                            STATS ChipPAC Ltd.
              Condensed Consolidated Statements of Operations
      (In thousands of U.S. Dollars, except share and per share data)
                                (Unaudited)


                                 Three Months Ended     Six Months Ended
                                --------------------  --------------------
                                June 25,    July 1,   June 25,    July 1,
                                  2006       2007       2006             2007
                                                                ---------    ---------    ---------    ---------
Net  revenues                                        $  418,133    $  370,183    $  803,842    $  760,653
Cost  of  revenues                                  (331,327)    (303,236)    (640,443)    (616,147)
                                                                ---------    ---------    ---------    ---------
Gross  profit                                              86,806          66,947        163,399        144,506

Operating  expenses:
          Selling,  general  and
            administrative                              39,914          28,036          79,625          56,035
          Research  and  development              7,909            8,985          14,882          17,170
          Tender  offer  expenses                            -            4,114                    -          10,922
          Held  for  sale  asset
            impairment                                                -            1,725                    -            1,725
          Restructuring  charges                            -                990                    -                990
                                                                ---------    ---------    ---------    ---------
              Total  operating  expenses        47,823          43,850          94,507          86,842
                                                                ---------    ---------    ---------    ---------

Operating  income                                      38,983          23,097          68,892          57,664
Other  income  (expenses),  net            (10,575)        (8,503)      (20,005)      (17,222)
                                                                ---------    ---------    ---------    ---------
Income  before  income  taxes                  28,408          14,594          48,887          40,442
Income  tax  expense                                  (7,211)        (5,782)      (13,129)      (13,433)
                                                                ---------    ---------    ---------    ---------
Income  before  minority  interest        21,197            8,812          35,758          27,009
Minority  interest                                    (3,177)        (1,383)        (5,722)        (2,533)
                                                                ---------    ---------    ---------    ---------
Net  income                                            $    18,020    $      7,429    $    30,036    $    24,476
                                                                =========    =========    =========    =========

Net  income  per  ordinary  share:
          Basic                                            $        0.01    $        0.00    $        0.02    $        0.01
          Diluted                                        $        0.01    $        0.00    $        0.01    $        0.01

Net  income  per  ADS:
          Basic                                            $        0.09    $        0.04    $        0.15    $        0.12
          Diluted                                        $        0.09    $        0.04    $        0.14    $        0.12

Ordinary  shares  (in  thousands)
  used  in  per  ordinary  share
  calculation:
          Basic                                            1,988,133    2,031,435    1,984,671    2,020,633
          Diluted                                        2,158,312    2,186,078    2,156,948    2,180,555

ADS  (in  thousands)  used  in  per
  ADS  calculation:
          Basic                                                198,813        203,144        198,467        202,063
          Diluted                                            215,831        218,608        215,695        218,056

Key  Ratios  and  Information:
Gross  Margin                                                  20.8%            18.1%            20.3%            19.0%
Operating  Expenses  as  a  %  of
  Revenue                                                          11.5%            11.9%            11.7%            11.4%
Operating  Margin                                            9.3%              6.2%              8.6%              7.6%

Depreciation  &  Amortization,
  including
          Amortization  of  Debt
            Issuance  Costs                        $    72,036    $    62,687    $  141,556    $  124,084
          Capital  Expenditures              $  112,453    $    55,373    $  245,307    $  112,159

Share-based  compensation
  expense  included  under
  SFAS  123(R)  were  as  follows:
          Cost  of  revenues                      $      1,629    $      1,069    $      3,143    $      2,557
          Selling,  general  and
            administrative                                    763                722            3,233            1,740
          Research  and  development                  391                196                852                572
                                                                ---------    ---------    ---------    ---------
                                                                $      2,783    $      1,987    $      7,228    $      4,869
                                                                =========    =========    =========    =========






                                                        STATS  ChipPAC  Ltd.
                                    Condensed  Consolidated  Balance  Sheets
                                            (In  thousands  of  U.S.  Dollars)



                                                                                                          December
                                                                                                                31,              July  1,
                                                                                                              2006                2007
                                                                                                        -----------  -----------
                                                                                                                                (Unaudited)
ASSETS
Current  assets:
    Cash,  cash  equivalents  and  marketable  securities    $      216,583  $      229,832
    Accounts  receivable,  net                                                            243,779          224,354
    Inventories                                                                                      111,614            89,645
    Other  current  assets                                                                      27,845            23,635
                                                                                                        -----------  -----------
    Total  current  assets                                                                    599,821          567,466

    Marketable  securities                                                                    15,358            15,133
    Property,  plant  and  equipment,  net                                    1,192,830      1,171,505
    Investment  in  equity  investee                                                    10,292            10,171
    Goodwill  and  intangible  assets                                                555,358          553,078
    Other  non-current  assets  *                                                          84,621            78,367
                                                                                                        -----------  -----------
        Total  assets                                                                        $  2,458,280  $  2,395,720
                                                                                                        -----------  -----------

LIABILITIES  AND  SHAREHOLDERS'    EQUITY
Current  liabilities:
    Accounts  and  other  payables                                              $      201,999  $      168,504
    Other  current  liabilities                                                          104,482            93,017
    Short-term  debts                                                                              65,373          152,024
                                                                                                        -----------  -----------
        Total  current  liabilities                                                      371,854          413,545
Long-term  debts                                                                                  697,523          534,052
Other  non-current  liabilities                                                        84,807            92,200
                                                                                                        -----------  -----------
        Total  liabilities                                                                  1,154,184      1,039,797
                                                                                                        -----------  -----------
Minority  interest                                                                                57,946            54,115
                                                                                                        -----------  -----------
Shareholders'  equity                                                                    1,246,150      1,301,808
                                                                                                        -----------  -----------
        Total  liabilities  and  shareholders'  equity            $  2,458,280  $  2,395,720
                                                                                                        -----------  -----------


    *  Includes  $980  and  $981  of  non-current  restricted  cash  as  of  July  1,
        2007  and  December  31,  2006,  respectively.




                                                        STATS  ChipPAC  Ltd.
                                            Other  Supplemental  Information
                                                                (Unaudited)



                                                                                        2Q  2006        1Q  2007        2Q  2007
Net  Revenues  by  Product  Line
Packaging  -  array                                                              55.3%            58.6%            56.0%
Packaging  -  leaded                                                            18.4%            16.9%            18.6%
Test  and  other  services                                                  26.3%            24.5%            25.4%
                                                                                      ---------    ---------    ---------
                                                                                              100.0%          100.0%          100.0%
                                                                                      =========    =========    =========
Net  Revenues  by  End  User  Market
Communications                                                                    57.3%            52.5%            50.0%
Personal  Computers                                                            19.1%            16.1%            14.8%
Consumer,  Multi-applications  and  Others                  23.6%            31.4%            35.2%
                                                                                      ---------    ---------    ---------
                                                                                              100.0%          100.0%          100.0%
                                                                                      =========    =========    =========
Net  Revenues  by  Region
United  States  of  America                                                72.3%            77.1%            71.6%
Europe                                                                                      2.9%              2.2%              3.5%
Asia                                                                                        24.8%            20.7%            24.9%
                                                                                      ---------    ---------    ---------
                                                                                              100.0%          100.0%          100.0%
                                                                                      =========    =========    =========

Number  of  Testers                                                                996                938                912
Number  of  Wirebonders                                                    3,801            3,808            3,759

Overall  Equipment  Utilization  Rate                                77%                75%                74%


 

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