STATS ChipPAC Reports Second Quarter 2010 Results

SINGAPORE--7/30/2010, UNITED STATES -- (MARKET WIRE) -- Jul 30, 2010 -- STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP), a leading semiconductor test and advanced packaging service provider, today announced results for the second quarter 2010.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "We are pleased with our second quarter performance. Revenue for second quarter of 2010 increased by 35.7% to $435.3 million compared to the second quarter of 2009 and increased by 12.2% over the prior quarter. Our second quarter revenue reflected strong demand across all segments and was better than seasonal trend. As a result of higher savings from cost reduction effort and richer product mix, profitability for the quarter significantly improved over corresponding quarter a year ago."

Net income for second quarter of 2010 was $37.3 million or $0.02 of net income per diluted ordinary share, compared to $2.2 million or $0.00 per diluted ordinary share in the second quarter of 2009 and net income of $27.5 million or $0.01 of net income per diluted ordinary share in the prior quarter.

John Lau, Chief Financial Officer of STATS ChipPAC, said, "Our gross margin in the second quarter of 2010 was 21.5% compared to 15.1% in the second quarter of 2009 and 20.0% in the prior quarter. Operating margin for second quarter of 2010 was 12.9% of revenue compared to 4.7% in the second quarter of 2009 and 11.2% in the prior quarter. Capital spending in the second quarter of 2010 was $67.7 million or 15.5% of revenue compared to $32.4 million or 10.1% of revenue in the second quarter of 2009, as we continued investments in wafer level packaging and 300mm eWLB manufacturing capacity. We ended the second quarter of 2010 with cash, cash equivalent and marketable securities of $381.1 million and debt of $451.4 million, compared to $368.1 million and $458.0 million, respectively, as of the fourth quarter of 2009."

The Company has today announced that it has commenced a cash tender offer and consent solicitation in respect of its $213.0 million of 6.75% Senior Notes due 2011 ("Existing Notes") and is concurrently offering senior notes ("New Notes") in a private placement in furtherance of its capital reduction plans, details of which are contained in a separate press release.

Forward-looking Statements

Certain statements in this release 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 include, but are not limited to, general business and economic conditions and the state of the semiconductor industry; prevailing market conditions; demand for end-use applications products such as communications equipment, consumer and multi-applications and personal computers; decisions by customers to discontinue outsourcing of test and packaging services; level of competition; our reliance on a small group of principal customers; our continued success in technological innovations; possible future application of push-down accounting; pricing pressures, including declines in average selling prices; intellectual property rights disputes and litigation; our ability to control operating expenses; our substantial level of indebtedness and access to credit markets; potential impairment charges; availability of financing; changes in our product mix; our 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; returns from research and development investments; changes in customer order patterns; shortages in supply of key components; customer credit risks; disruption of our operations; loss of key management or other personnel; defects or malfunctions in our testing equipment or packages; rescheduling or cancelling of customer orders; adverse tax and other financial consequences if the taxing authorities do not agree with our interpretation of the applicable tax laws; classification of our Company as a passive foreign investment company; our ability to develop and protect our intellectual property; changes in environmental laws and regulations; exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; majority ownership by Temasek Holdings (Private) Limited ("Temasek") that may result in conflicting interests with Temasek and our affiliates; unsuccessful acquisitions and investments in other companies and businesses; labor union problems in South Korea; uncertainties of conducting business in China and changes in laws, currency policy and political instability in other countries in Asia; natural calamities and disasters, including outbreaks of epidemics and communicable diseases, the continued trading and listing of our ordinary shares on the Singapore Exchange Securities Trading Limited ("SGX-ST"); and other risks described from time to time in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F dated March 5, 2010. You should not unduly rely on such statements. We do not intend, and do not assume any obligation, to update any forward-looking statements to reflect subsequent events or circumstances.

Our 52-53 week fiscal year ends on the Sunday nearest and prior to December 31. Our fiscal quarters end on a Sunday and are generally thirteen weeks in length. Our second quarter of 2010 ended on June 27, 2010, while our second quarter of 2009 and fiscal year 2009 ended on June 28, 2009 and December 27, 2009, respectively. References to "US GAAP" are to Generally Accepted Accounting Principles as practiced in the United States of America and references to "$" are to the lawful currency of the United States of America.

No Offering of New Notes and No Offer to Purchase Existing Notes

This release does not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from such registration requirements. The Company has not registered and does not intend to register any part of the proposed offering of New Notes in the United States. This release also does not constitute an offer to purchase, a solicitation of an offer to purchase, or a solicitation of tenders or consents with respect to, any Existing Notes.

About STATS ChipPAC Ltd.

STATS ChipPAC Ltd. is a leading service provider of semiconductor packaging design, assembly, test and distribution solutions in diverse end market applications including communications, digital consumer and computing. With global headquarters in Singapore, STATS ChipPAC has design, research and development, manufacturing or customer support offices in 10 different countries. STATS ChipPAC is listed on the SGX-ST. Further information is available at www.statschippac.com. Information contained in this website does not constitute a part of this release.

                            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 28,    June 27,    June 28,    June 27,
                               2009        2010        2009        2010
                            ----------  ----------  ---------   ----------
Net revenues                $  320,690  $  435,320  $ 541,183   $  823,267
Cost of revenues              (272,289)   (341,726)  (494,952)    (651,996)
                            ----------  ----------  ---------   ----------
Gross profit                    48,401      93,594     46,231      171,271

Operating expenses:
  Selling, general and
   administrative               23,506      25,390     44,113        47,973
    Research  and  development              9,771            12,254          17,396              23,792
    Restructuring  charges                            -                      -          12,933                        -
                                                        ----------    ----------    ---------      ----------
        Total  operating
          expenses                                      33,277            37,644          74,442              71,765
                                                        ----------    ----------    ---------      ----------

Operating  income  (loss)                  15,124            55,950        (28,211)            99,506
Other  income  (expenses),
  net                                                      (12,532)          (7,672)      (21,165)          (15,536)
                                                        ----------    ----------    ---------      ----------
Income  (loss)  before  income
  taxes                                                      2,592            48,278        (49,376)            83,970
Income  tax  expense                                (362)          (8,882)            (782)          (15,865)
                                                        ----------    ----------    ---------      ----------
Net  income  (loss)                                2,230            39,396        (50,158)            68,105
Less:  Net  (income)  loss
  attributable  to  the
  noncontrolling  interest                        (7)          (2,064)          1,314              (3,323)
                                                        ----------    ----------    ---------      ----------
Net  income  (loss)
  attributable  to  STATS
  ChipPAC  Ltd.                              $        2,223    $      37,332    $  (48,844)    $      64,782
                                                        ==========    ==========    =========      ==========

Net  income  (loss)  per
  ordinary  share
  attributable  to  STATS
  ChipPAC  Ltd.:
    Basic                                          $          0.00    $          0.02    $      (0.02)    $          0.03
    Diluted                                      $          0.00    $          0.02    $      (0.02)    $          0.03

Ordinary  shares  (in
  thousands)  used  in  per
  ordinary  share
  calculation:
    Basic                                            2,202,218      2,202,218    2,202,218        2,202,218
    Diluted                                        2,202,223      2,202,240    2,202,218        2,202,239

Key  Ratios  and  Information:
Gross  Margin                                            15.1%              21.5%              8.5  %              20.8%
Operating  Expenses  as  a  %
  of  Revenue                                              10.4%                8.6%            13.7  %                8.7%
Operating  Margin                                      4.7%              12.9%            (5.2)%              12.1%

Depreciation  &
  Amortization,  including
  Amortization  of  Debt
  Issuance  Costs                          $      67,324    $      69,365    $  133,979      $    137,180
Capital  Expenditures                $      32,350    $      67,650    $    41,843      $    167,037





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

                                                                                                        December  27,    June  27,
                                                                                                              2009                2010
                                                                                                        -----------  -----------
                                                                                                                                (Unaudited)
ASSETS
Current  assets:
    Cash,  cash  equivalents  and  marketable  securities    $      351,195  $      364,216
    Accounts  receivable,  net                                                            208,766          255,420
    Inventories                                                                                        61,859            65,836
    Other  current  assets  *                                                                  52,215            49,012
                                                                                                        -----------  -----------
        Total  current  assets                                                                674,035          734,484

    Marketable  securities                                                                    16,929            16,849
    Property,  plant  and  equipment,  net                                    1,115,497      1,150,227
    Investment  in  equity  investee                                                      7,743              8,013
    Goodwill  and  intangible  assets                                                591,125          590,856
    Other  non-current  assets  *                                                          21,611            25,319
                                                                                                        -----------  -----------
        Total  assets                                                                        $  2,426,940  $  2,525,748
                                                                                                        -----------  -----------

LIABILITIES  AND  SHAREHOLDERS'  EQUITY
Current  liabilities:
    Accounts  and  other  payables                                              $      182,704  $      213,083
    Other  current  liabilities                                                          103,394          104,836
    Short-term  debts                                                                            224,786            77,155
                                                                                                        -----------  -----------
        Total  current  liabilities                                                      510,884          395,074
Long-term  debts                                                                                  233,181          374,254
Other  non-current  liabilities                                                        59,329            65,847
                                                                                                        -----------  -----------
        Total  liabilities                                                                      803,394          835,175
                                                                                                        -----------  -----------
STATS  ChipPAC  Ltd.  shareholders'  equity                              1,564,669      1,629,702
                                                                                                        -----------  -----------
Noncontrolling  interest                                                                    58,877            60,871
                                                                                                        -----------  -----------
        Total  liabilities  and  equity                                        $  2,426,940  $  2,525,748
                                                                                                        -----------  -----------

*  Includes  $0.4  million  of  non-current  restricted  cash  as  of  December  27,
    2009,  and  $0.03  million  of  current  restricted  cash  and  $0.4  million  of
    non-current  restricted  cash  as  of  June  27,  2010.




                                                        STATS  ChipPAC  Ltd.
                                            Other  Supplemental  Information
                                                                (Unaudited)


                                        
                                                                                                  2Q  2009    1Q  2010    2Q  2010
Net  Revenues  by  Product  Line
Packaging  -  laminate                                                                58.5%        55.5%        55.6%
Packaging  -  leaded                                                                    14.7%        15.3%        15.3%
Test                                                                                                23.0%        22.2%        20.5%
Wafer  level  processing  and  other  services                        3.8%          7.0%          8.6%
                                                                                                  -------    -------    -------
                                                                                                      100.0%      100.0%      100.0%
                                                                                                  =======    =======    =======
Net  Revenues  by  End  User  Market
Communications                                                                            53.3%        52.3%        51.5%
Personal  Computers                                                                    17.5%        15.4%        16.1%
Consumer,  Multi-applications  and  Others                          29.2%        32.3%        32.4%
                                                                                                  -------    -------    -------
                                                                                                      100.0%      100.0%      100.0%
                                                                                                  =======    =======    =======
Net  Revenues  by  Region
United  States  of  America                                                        76.2%        61.5%        56.7%
Europe                                                                                              3.9%        12.8%        14.4%
Asia                                                                                                19.9%        25.7%        28.9%
                                                                                                  -------    -------    -------
                                                                                                      100.0%      100.0%      100.0%
                                                                                                  =======    =======    =======

Number  of  Testers                                                                        962            929            940
Number  of  Wirebonders                                                            4,596        4,538        4,456

Overall  Equipment  Utilization  Rate                                        51%            63%            67%
 

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