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) 939 3104 Fax: (208) 939 4817 email:
STATS ChipPAC Announces Restructuring Plan
| Source: STATS ChipPAC
SINGAPORE -- 12/17/2008, UNITED STATES--(Marketwire - December 17, 2008) - STATS ChipPAC Ltd.
("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP) (SES : S24 ), a leading
semiconductor test and advanced packaging service provider, today announced
a restructuring plan to better align its operations with business outlook
as a result of the global semiconductor downturn.
Since the middle of 2008, the Company has taken a number of actions to
reduce its operating costs. These included productivity improvements,
material cost reduction and reduction in capital expenditure. The Company
has also reduced labor costs through attrition and hiring freeze, mandatory
shutdown and vacation, reduction in overtime, salary freeze of executives
and voluntary separation.
To further align operating costs with the challenging business outlook, the
Company is implementing a restructuring plan to reduce its global
workforce. The current restructuring plan involves a reduction of
approximately 1,600 employees, representing approximately 12% of the
Company's global workforce. The workforce reduction is expected to be
completed in the first quarter of 2009. The Company expects to incur a
restructuring charge to be determined in due course.
"The restructuring plan that we are announcing today is a painful but
unavoidable action given the deterioration in semiconductor demand globally
as a result of the global economic crisis. While our balance sheet is
strong and our liquidity position is healthy, we need to resize our
operations to better align with the changed business environment ahead. We
are confident that with these proactive actions, we will be in a much
stronger position to weather this economic downturn and meet the challenges
ahead," said Tan Lay Koon, President and Chief Executive Officer, STATS
ChipPAC.
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. These
forward-looking statements include the timing and extent of the
restructuring plan, and the restructuring charge to be incurred in
connection therewith. 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; level of competition; demand
for end-use applications products such as communications equipment and
personal computers; decisions by customers to discontinue outsourcing of
test and packaging services; our reliance on a small group of principal
customers; our continued success in technological innovations; pricing
pressures, including declines in average selling prices; availability of
financing; prevailing market conditions; our ability to meet the applicable
requirements for the termination of registration under the Exchange Act;
our ability to meet specific conditions imposed for the continued listing
or delisting of our ordinary shares on the Singapore Exchange Securities
Trading Limited (SGX-ST); our substantial level of indebtedness; potential
impairment charges; delays in acquiring or installing new equipment;
adverse tax and other financial consequences if the South Korean taxing
authorities do not agree with our interpretation of the applicable tax
laws; our ability to develop and protect our intellectual property;
rescheduling or canceling of customer orders; changes in our product mix;
intellectual property rights disputes and litigation; our capacity
utilization; limitations imposed by our financing arrangements which may
limit our ability to maintain and grow our business; 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; 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 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 SEC filings, including its annual report on Form 20-F
dated March 7, 2008. 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. 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.