STATS ChipPAC Reports Second Quarter 2009 Results


SINGAPORE - 7/28/2009, UNITED STATES--(Marketwire - July 28, 2009) - STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP), a leading semiconductor test and advanced packaging service provider, today announced results for second quarter 2009.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "Revenue for second quarter of 2009 increased by 45.4% to $320.7 million compared to prior quarter and decreased by 26.1% over the second quarter of 2008. Our second quarter revenue reflected improved business conditions as we benefited from the rebound in demand for our services from the restocking of inventories by our customers and the launch of new products."

Net income for second quarter of 2009 was $2.2 million or $0.00 of net income per diluted ordinary share, compared to net income of $22.1 million or $0.01 of net income per diluted ordinary share in the second quarter of 2008.

John Lau, Chief Financial Officer of STATS ChipPAC, said, "The gross margin in second quarter of 2009 was 15.1% compared to (1.0)% in the prior quarter, and 17.2% in the second quarter of 2008. Operating margin for second quarter of 2009, was 4.7% of revenue, compared to (19.7)% in the prior quarter, and 8.1% in the second quarter of 2008. Capital spending in the second quarter of 2009 was $32.4 million or 10.1% of revenue compared to $64.1 million or 14.8% of revenue in the second quarter of 2008. We ended the second quarter of 2009 with $325.4 million of cash, cash equivalent and marketable securities and $467.2 million of debt, compared to $352.8 million and $473.5 million respectively as of the fourth quarter of 2008."

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, extent of deterioration in 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; customer credit risks; 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; our ability to generate cash; potential impairment charges; availability of financing; adverse tax and other financial consequences if the South Korean taxing authorities do not agree with our interpretation of the applicable tax laws; classification of the Company as a passive foreign investment company; our ability to develop and protect our intellectual property; rescheduling or canceling of customer orders; 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; 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; our ability to meet specific conditions imposed for the continued listing or delisting of our ordinary shares under the Singapore Exchange Securities Trading Limited (SGX-ST); 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; 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 9, 2009. 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.

Since the beginning of fiscal year 2005, we have employed quarterly and fiscal year reporting periods. 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 2009 ended on June 28, 2009, while our second quarter of 2008 and fiscal year 2008 ended on June 29, 2008 and December 28, 2008, 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       Six Months Ended
                            ----------------------  ----------------------
                             June 29,    June 28,    June 29,    June 28,
                               2008        2009        2008        2009
                            ----------  ----------  ----------  ---------
Net revenues                $  434,142  $  320,690  $  861,384  $ 541,183
Cost of revenues              (359,452)   (272,289)   (712,156)  (494,952)
                            ----------  ----------  ----------  ---------
Gross profit                    74,690      48,401     149,228     46,231

Operating expenses:
  Selling, general and
   administrative               28,616      23,506      60,082     44,113
  Research and development       9,279       9,771      19,284     17,396
  Restructuring charges              -           -         900     12,933
  Accelerated share-based
   compensation                  1,562           -       1,562          -
                            ----------  ----------  ----------  ---------
    Total operating
     expenses                   39,457      33,277      81,828     74,442
                            ----------  ----------  ----------  ---------

Operating income (loss)         35,233      15,124      67,400    (28,211)
Other income (expenses),
 net                            (4,818)    (12,532)    (10,125)   (21,165)
                            ----------  ----------  ----------  ---------
Income (loss) before income
 taxes                          30,415       2,592      57,275    (49,376)
Income tax expense              (7,009)       (362)    (14,629)      (782)
                            ----------  ----------  ----------  ---------
Net income (loss)               23,406       2,230      42,646    (50,158)
Less: Net (income) loss
 attributable to the
 noncontrolling interest        (1,290)         (7)     (2,677)     1,314
                            ----------  ----------  ----------  ---------
Net income (loss)
 attributable to STATS
 ChipPAC Ltd.               $   22,116  $    2,223  $   39,969  $ (48,844)
                            ==========  ==========  ==========  =========

Net income (loss) per
 ordinary share
 attributable to STATS
 ChipPAC Ltd.:
  Basic                     $     0.01  $     0.00  $     0.02  $   (0.02)
  Diluted                   $     0.01  $     0.00  $     0.02  $   (0.02)

Ordinary shares (in
 thousands) used in per
 ordinary share
 calculation:
  Basic                      2,118,538   2,202,218   2,085,687  2,202,218
  Diluted                    2,120,798   2,022,223   2,089,239  2,202,218

Key Ratios and Information:
Gross Margin                      17.2%       15.1%       17.3%       8.5 %
Operating Expenses as a %
 of Revenue                        9.1%       10.4%        9.5%      13.7 %
Operating Margin                   8.1%        4.7%        7.8%      (5.2)%

Depreciation & Amortization,
Including Amortization of
Debt Issuance Costs         $   72,562  $   67,324  $  144,825  $ 133,979
Capital Expenditures        $   64,101  $   32,350  $  119,317  $  41,843



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

                                                    December 28,  June 28,
                                                       2008        2009
                                                    ----------- -----------
                                                                (Unaudited)
ASSETS
Current assets:
  Cash, cash equivalents and marketable securities  $   337,230 $   309,365
  Accounts receivable, net                              139,520     173,810
  Inventories                                            60,717      61,641
  Other current assets                                   33,841      35,822
                                                    ----------- -----------
    Total current assets                                571,308     580,638

  Marketable securities                                  15,587      16,061
  Property, plant and equipment, net                  1,216,342   1,129,283
  Investment in equity investee                           9,001       7,731
  Goodwill and intangible assets                        595,894     593,735
  Other non-current assets *                             38,931      31,096
                                                    ----------- -----------
    Total assets                                    $ 2,447,063 $ 2,358,544
                                                    ----------- -----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts and other payables                       $   148,931 $   152,610
  Other current liabilities                             152,836     118,198
  Short-term debts                                       76,953      66,136
                                                    ----------- -----------
    Total current liabilities                           378,720     336,944
Long-term debts                                         396,500     401,085
Other non-current liabilities                            64,144      60,023
                                                    ----------- -----------
    Total liabilities                                   839,364     798,052
                                                    ----------- -----------
STATS ChipPAC Ltd. shareholders' equity               1,548,657   1,504,842
                                                    ----------- -----------
Noncontrolling interest                                  59,042      55,650
                                                    ----------- -----------
    Total liabilities and equity                    $ 2,447,063 $ 2,358,544
                                                    ----------- -----------


* Includes $1.0 million of non-current restricted cash in each of June
  28, 2009 and December 28, 2008.


                          STATS ChipPAC Ltd.
                   Other Supplemental Information
                            (Unaudited)


                                            2Q 2008    1Q 2009    2Q 2009
Net Revenues by Product Line
Packaging - laminate                            57.0%      56.5%      58.5%
Packaging - leaded                              17.9%      16.7%      14.7%
Test and other services                         25.1%      26.8%      26.8%
                                           ---------  ---------  ---------
                                               100.0%     100.0%     100.0%
                                           =========  =========  =========
Net Revenues by End User Market
Communications                                  52.6%      50.4%      53.3%
Personal Computers                              14.3%      12.3%      17.5%
Consumer, Multi-applications and Others         33.1%      37.3%      29.2%
                                           ---------  ---------  ---------
                                               100.0%     100.0%     100.0%
                                           =========  =========  =========
Net Revenues by Region
United States of America                        73.1%      80.1%      76.2%
Europe                                           4.2%       5.4%       3.9%
Asia                                            22.7%      14.5%      19.9%
                                           ---------  ---------  ---------
                                               100.0%     100.0%     100.0%
                                           =========  =========  =========

Number of Testers                              1,020        954        962
Number of Wirebonders                          4,715      4,607      4,596

Overall Equipment Utilization Rate                67%        33%        51%

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:

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