STATS ChipPAC Announces Plan for Its Malaysia Plant and Provides Update for Second Quarter 2013

SINGAPORE -- 28 JUNE 2013, UNITED STATES--(Marketwired - Jun 28, 2013) - STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP) (SGX: S24), a leading provider of advanced semiconductor packaging and test services, today announced the plan to consolidate its leaded wirebond packaging and related test operations in Kuala Lumpur, Malaysia into its Qingpu, Shanghai, China operations over several phases in 2013 and 2014, and the closure of its Malaysia plant by the end of 2014.

Tan Lay Koon, President and Chief Executive Officer, STATS ChipPAC, said, "The announced plan will consolidate our manufacturing footprint into larger scale plants and achieve a more competitive cost structure over the longer term."

The Company currently expects to incur total charges of approximately $39 million, comprising employee severance and benefit costs of approximately $19 million, non-cash asset impairment charges of approximately $18 million and other associated costs of approximately $2 million. Of the total charges, approximately $37 million and $2 million will be incurred in the second quarter of 2013 and in 2014, respectively.

The plant closure will affect approximately 1,100 of our employees in Malaysia, representing approximately 11% of our total global workforce. The Company will ensure that fair severance benefits and outplacement support will be provided to affected employees.

The consolidation into China will position the Company to better engage its customers with broader product offerings and at a more competitive cost structure for its leaded wirebond solutions.

Outlook

STATS ChipPAC provided its outlook for the second quarter 2013 on 24 April 2013 when the Company expected net revenues to increase approximately 2% to 6% compared to the prior quarter, with adjusted EBITDA(1) in the range of 21% to 25% of revenue. The Company now expects net revenues for the second quarter of 2013 to decrease approximately 3% to 4% compared to the prior quarter, with adjusted EBITDA¹ in the range of 21% to 23% of revenue. We expect capital expenditure² in the second quarter of 2013 to remain at approximately $100 million to $120 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 months ended 31 March 2013 filed with the Singapore Exchange Securities Trading Limited ("SGX-ST") for the major assumptions made in preparing our outlook for the second quarter 2013. 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 restructuring, plant closure and associated charges related to our announced plan for the Malaysia plant. 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 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, inability to consolidate our Malaysia operations into our China operations; uncertainty as to whether such plan will achieve the expected objectives and results; 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; 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.