STATS ChipPAC Reports Third Quarter 2010 Results

SINGAPORE -- 28/10/2010, UNITED STATES--(Marketwire - October 28, 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 third quarter 2010.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "Revenue for third quarter of 2010 increased by 10.9% to $432.2 million compared to the third quarter of 2009 and decreased by marginal 0.7% over the prior quarter. Our third quarter revenue reflected strong demand in the communications segment offset by weakness in the personal computing and certain segments of the consumer market."

Net income for third quarter of 2010 was $24.2 million or $0.01 of net income per diluted ordinary share, compared to $25.1 million or $0.01 per diluted ordinary share in the third quarter of 2009 and net income of $37.3 million or $0.02 of net income per diluted ordinary share in the prior quarter. Net income for the third quarter of 2010 included tender offer expense for our 6.75% Senior Notes due 2011 of $3.1 million and interest expense from recent offering of $600.0 million of 7.5% Senior Notes due 2015.

John Lau, Chief Financial Officer of STATS ChipPAC, said, "Our gross margin in the third quarter of 2010 was 20.2%, similar to gross margin of 20.2% in the third quarter of 2009 and 21.5% in the prior quarter. Operating margin for third quarter of 2010 was 10.6% of revenue compared to 9.4% in the third quarter of 2009 and 12.9% in the prior quarter. Capital spending in the third quarter of 2010 was $56.4 million or 13.1% of revenue compared to $41.2 million or 10.6% of revenue in the third quarter of 2009. We ended the third quarter of 2010 with cash, cash equivalent and marketable securities of $966.8 million and debt of $995.7 million, compared to $368.1 million and $458.0 million, respectively, as of the end of fourth quarter of 2009. The proceeds from recent $600.0 million of 7.5% Senior Notes due 2015 offering completed for our capital reduction were included in our cash, cash equivalent and marketable securities as of the end of the third quarter of 2010."

Outlook

Tan Lay Koon commented, "In terms of outlook, we expect net revenues in the fourth quarter of 2010 to decline by single-digit level from prior quarter, with adjusted EBITDA(1) in the range of 23% to 27% of revenue. We expect capital expenditure(2) in the fourth quarter of 2010 will be approximately $50 million to $60 million."

The outlook is subject to a number of risks and uncertainties that could cause actual events or results to differ materially from those disclosed in the outlook statements. These statements are based on our management's beliefs and assumptions, which involve judgments about future trends, events and conditions, all of which are subject to change and many of which are beyond our control. Please refer to our Financial Statements for the three and nine months ended September 26, 2010 filed with the Singapore Exchange Securities Trading Limited ("SGX-ST") for the major assumptions made in preparing our outlook for the fourth quarter of 2010. Investors should consider these assumptions and make their own assessment of the future performance of STATS ChipPAC and note that there may not be a direct correlation between the net income of the Company with adjusted EBITDA as a percentage of revenue. Please read the "Risk Factors" section in our 2009 Annual Report on Form 20-F furnished to the U.S. Securities and Exchange Commission on March 5, 2010 for a discussion of the factors that could cause our actual results to differ materially from our expectations.

(1) Adjusted EBITDA is not required by, or presented in accordance with, U.S. GAAP. We define adjusted EBITDA as net income (loss) attributable to STATS ChipPAC Ltd. plus income tax expense, interest expense, net, depreciation and amortization, restructuring charges, stock-based compensation, held for sale asset impairment, tender offer expenses and write-off of debt issuance cost. We present adjusted EBITDA as a supplemental measure of our performance. Management believes the non-GAAP financial measure is useful to investors in enabling them to perform additional analysis.

(2) Capital expenditure refers to acquisitions of production equipment and asset upgrades.

Forward-looking Statements

Certain statements in this release are forward-looking statements, including our outlook for the fourth quarter of 2010, 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; 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 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 third quarter of 2010 ended on September 26, 2010, while our third quarter of 2009 and fiscal year 2009 ended on September 27, 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.

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          Nine Months Ended
                    --------------------------  --------------------------
                    September 27, September 26, September 27, September 26,
                        2009          2010          2009          2010
                    ------------  ------------  ------------  ------------
Net revenues        $    389,768  $    432,208  $    930,951  $  1,255,475
Cost of revenues        (311,161)     (345,097)     (806,113)     (997,093)
                    ------------  ------------  ------------  ------------
Gross profit              78,607        87,111       124,838       258,382

Operating expenses:
  Selling, general
   and
   administrative         26,714        25,576        70,827        73,549
  Research and
   development            12,044        11,245        29,440        35,037
  Tender offer
   expense                     -         3,107             -         3,107
  Restructuring
   charges                 3,139         1,421        16,072         1,421
                    ------------  ------------  ------------  ------------
    Total operating
     expenses             41,897        41,349       116,339       113,114
                    ------------  ------------  ------------  ------------

Operating income          36,710        45,762         8,499       145,268
Other income
 (expenses), net         (11,090)      (12,821)      (32,255)      (28,357)
                    ------------  ------------  ------------  ------------
Income (loss)
 before income
 taxes                    25,620        32,941       (23,756)      116,911
Income tax benefit
 (expense)                   315        (6,725)         (467)      (22,590)
                    ------------  ------------  ------------  ------------
Net income (loss)         25,935        26,216       (24,223)       94,321
Less: Net (income)
 loss attributable
 to the
 noncontrolling
 interest                   (873)       (2,031)          441        (5,354)
                    ------------  ------------  ------------  ------------
Net income (loss)
 attributable to
 STATS ChipPAC Ltd. $     25,062  $     24,185  $    (23,782) $     88,967
                    ============  ============  ============  ============

Net income (loss)
 per ordinary share
 attributable to
 STATS ChipPAC
 Ltd.:
  Basic             $       0.01  $       0.01  $      (0.01) $       0.04
  Diluted           $       0.01  $       0.01  $      (0.01) $       0.04

Ordinary shares (in
 thousands) used in
 per ordinary share
 calculation:
  Basic                2,202,218     2,202,218     2,202,218     2,202,218
  Diluted              2,202,236     2,202,274     2,202,218     2,202,251

Key Ratios and
 Information:
Gross Margin                20.2%         20.2%         13.4%         20.6%
Operating Expenses
 as a % of Revenue          10.8%          9.6%         12.5%          9.0%
Operating Margin             9.4%         10.6%          0.9%         11.6%

Depreciation &
 Amortization,
 including
 Amortization of
 Debt Issuance
 Costs              $     67,201  $     71,739  $    201,180  $    208,919
Capital
 Expenditures       $     41,156  $     56,428  $     82,999  $    223,465

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



                                                December 27,  September 26,
                                                    2009          2010
                                                ------------- -------------
                                                              (Unaudited)
ASSETS
Current assets:
  Cash, cash equivalents and marketable
   securities                                   $     351,195 $     949,758
  Accounts receivable, net                            208,766       255,592
  Inventories                                          61,859        72,202
  Other current assets *                               52,215        49,430
                                                ------------- -------------
    Total current assets                              674,035     1,326,982

  Marketable securities                                16,929        17,002
  Property, plant and equipment, net                1,115,497     1,139,154
  Investment in equity investee                         7,743         8,453
  Goodwill and intangible assets                      591,125       590,175
  Other non-current assets *                           21,611        31,266
                                                ------------- -------------
    Total assets                                $   2,426,940 $   3,113,032
                                                ------------- -------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts and other payables                   $     182,704 $     216,245
  Other current liabilities                           103,394       112,062
  Short-term debts                                    224,786        58,307
                                                ------------- -------------
    Total current liabilities                         510,884       386,614
Long-term debts                                       233,181       937,389
Other non-current liabilities                          59,329        68,388
                                                ------------- -------------
    Total liabilities                                 803,394     1,392,391
                                                ------------- -------------
STATS ChipPAC Ltd. shareholders' equity             1,564,669     1,656,882
                                                ------------- -------------
Noncontrolling interest                                58,877        63,759
                                                ------------- -------------
    Total liabilities and equity                $   2,426,940 $   3,113,032
                                                ------------- -------------

* 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 September 26, 2010.

                            STATS ChipPAC Ltd.
                      Other Supplemental Information
                                (Unaudited)



                                              3Q 2009   2Q 2010   3Q 2010
Net Revenues by Product Line
Packaging - laminate                              59.4%     55.6%     56.5%
Packaging - leaded                                14.4%     15.3%     15.2%
Test                                              21.8%     20.5%     20.0%
Wafer level processing and other services          4.4%      8.6%      8.3%
                                              --------  --------  --------
                                                 100.0%    100.0%    100.0%
                                              ========  ========  ========
Net Revenues by End User Market
Communications                                    48.6%     51.5%     53.9%
Personal Computers                                18.2%     16.1%     13.0%
Consumer, Multi-applications and Others           33.2%     32.4%     33.1%
                                              --------  --------  --------
                                                 100.0%    100.0%    100.0%
                                              ========  ========  ========
Net Revenues by Region
United States of America                          72.4%     56.7%     64.7%
Europe                                             4.9%     14.4%      8.6%
Asia                                              22.7%     28.9%     26.7%
                                              --------  --------  --------
                                                 100.0%    100.0%    100.0%
                                              ========  ========  ========

Number of Testers                                  973       940       957
Number of Wirebonders                            4,554     4,456     4,458

Overall Equipment Utilization Rate                  60%       67%       66%

Contact Information: Investor Relations Contact: Tham Kah Locke Vice President of Corporate Finance Tel: (65) 6824 7788 Fax: (65) 6720 7826 email: Media Contact: Lisa Lavin Deputy Director of Corporate Communications Tel: (208) 867 9859 email: