STATS ChipPAC Provides Update for Third Quarter 2014

SINGAPORE 17 SEPTEMBER 2014, UNITED STATES--(Marketwired - Sep 17, 2014) - STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP) (SGX: S24), a leading semiconductor test and advanced packaging service provider, today provided an update for the third quarter 2014.

In its third quarter 2014 outlook published in the Company's second quarter 2014 results release dated 8 August 2014, the Company had expected net revenues to increase approximately 2% to 8% compared to the second quarter of 2014, with adjusted EBITDA¹ in the range of 20% to 25% of revenue, and had expected capital expenditure² in the third quarter of 2014 to be approximately $175 million to $205 million, including approximately $75 million to $95 million for progressive construction of the new factory in Korea.

STATS ChipPAC now expects net revenues for the third quarter of 2014 to be $398 million to $405 million, a decrease of approximately 1% to 3% compared to the second quarter of 2014. The delay in wafer supply at several key customers has impacted the third quarter revenue as some demand has shifted out of the third quarter of 2014. In addition, the Company is experiencing a faster shift in demand from the high-end smartphone market space to the low-cost smartphone segment that has lower average selling price. STATS ChipPAC further expects adjusted EBITDA¹ to be in the range of 20% to 23% of revenue and expects capital expenditure² to be in the range of $165 million to $185 million in the third quarter of 2014, including approximately $80 million to $90 million for progressive construction of the new factory in Korea.

The information and estimates provided in this update is subject to a number of risks and uncertainties that could cause final reported figures to differ materially from those disclosed in the third quarter 2014 update statements. These statements are based on our management's beliefs and assumptions, which involve judgments about 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 six months ended 29 June 2014 filed with the Singapore Exchange Securities Trading Limited ("SGX-ST") for the major assumptions made in preparing our outlook, including the update above, for the third quarter of 2014. 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.

¹ Adjusted EBITDA is not required by, or presented in accordance with, Singapore Financial Reporting Standards ("FRS"). We define adjusted EBITDA as net income attributable to STATS ChipPAC Ltd. plus income tax expense, interest expense, net, depreciation and amortisation, restructuring charges, share-based compensation, goodwill and equipment impairment, tender offer, debt exchange or debt redemption expenses and write-off of debt issuance costs. Adjusted EBITDA excludes the plant closure costs related to our Malaysia plant and our restructuring actions. We present adjusted EBITDA as a supplemental measure of our performance. Management believes the non-FRS financial measure is useful to investors in enabling them to perform additional analysis.

² Capital expenditure refers to acquisitions of production equipment, asset upgrades and infrastructure investments.

Forward-Looking Statements

Certain statements in this release are forward-looking statements, including our update for the third quarter of 2014, that involve a number of risks and uncertainties that could cause actual 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 utilisation; 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; customer credit risks; disruption of our operations; shortages in supply of key components and disruption in supply chain; inability to consolidate our Malaysia operations into our China operations and uncertainty as to whether such plan will achieve the expected objectives and results; the amount of the business interruption insurance claim due to flooding of the Thailand Plant; 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; labour 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"). 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.

About STATS ChipPAC Ltd.

STATS ChipPAC Ltd. (SGX-ST Code: S24) 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 throughout Asia, the United States and Europe. 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.