STATS ChipPAC Reports Second Quarter 2010 Results

SINGAPORE--7/30/2010, UNITED STATES--(Marketwire - July 30, 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 second quarter 2010.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "We are pleased with our second quarter performance. Revenue for second quarter of 2010 increased by 35.7% to $435.3 million compared to the second quarter of 2009 and increased by 12.2% over the prior quarter. Our second quarter revenue reflected strong demand across all segments and was better than seasonal trend. As a result of higher savings from cost reduction effort and richer product mix, profitability for the quarter significantly improved over corresponding quarter a year ago."

Net income for second quarter of 2010 was $37.3 million or $0.02 of net income per diluted ordinary share, compared to $2.2 million or $0.00 per diluted ordinary share in the second quarter of 2009 and net income of $27.5 million or $0.01 of net income per diluted ordinary share in the prior quarter.

John Lau, Chief Financial Officer of STATS ChipPAC, said, "Our gross margin in the second quarter of 2010 was 21.5% compared to 15.1% in the second quarter of 2009 and 20.0% in the prior quarter. Operating margin for second quarter of 2010 was 12.9% of revenue compared to 4.7% in the second quarter of 2009 and 11.2% in the prior quarter. Capital spending in the second quarter of 2010 was $67.7 million or 15.5% of revenue compared to $32.4 million or 10.1% of revenue in the second quarter of 2009, as we continued investments in wafer level packaging and 300mm eWLB manufacturing capacity. We ended the second quarter of 2010 with cash, cash equivalent and marketable securities of $381.1 million and debt of $451.4 million, compared to $368.1 million and $458.0 million, respectively, as of the fourth quarter of 2009."

The Company has today announced that it has commenced a cash tender offer and consent solicitation in respect of its $213.0 million of 6.75% Senior Notes due 2011 ("Existing Notes") and is concurrently offering senior notes ("New Notes") in a private placement in furtherance of its capital reduction plans, details of which are contained in a separate press release.

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, 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; 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; 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 Singapore Exchange Securities Trading Limited ("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 second quarter of 2010 ended on June 27, 2010, while our second quarter of 2009 and fiscal year 2009 ended on June 28, 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.

No Offering of New Notes and No Offer to Purchase Existing Notes

This release does not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from such registration requirements. The Company has not registered and does not intend to register any part of the proposed offering of New Notes in the United States. This release also does not constitute an offer to purchase, a solicitation of an offer to purchase, or a solicitation of tenders or consents with respect to, any Existing Notes.

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 28,    June 27,    June 28,    June 27,
                               2009        2010        2009        2010
                            ----------  ----------  ---------   ----------
Net revenues                $  320,690  $  435,320  $ 541,183   $  823,267
Cost of revenues              (272,289)   (341,726)  (494,952)    (651,996)
                            ----------  ----------  ---------   ----------
Gross profit                    48,401      93,594     46,231      171,271

Operating expenses:
  Selling, general and
   administrative               23,506      25,390     44,113       47,973
  Research and development       9,771      12,254     17,396       23,792
  Restructuring charges              -           -     12,933            -
                            ----------  ----------  ---------   ----------
    Total operating
     expenses                   33,277      37,644     74,442       71,765
                            ----------  ----------  ---------   ----------

Operating income (loss)         15,124      55,950    (28,211)      99,506
Other income (expenses),
 net                           (12,532)     (7,672)   (21,165)     (15,536)
                            ----------  ----------  ---------   ----------
Income (loss) before income
 taxes                           2,592      48,278    (49,376)      83,970
Income tax expense                (362)     (8,882)      (782)     (15,865)
                            ----------  ----------  ---------   ----------
Net income (loss)                2,230      39,396    (50,158)      68,105
Less: Net (income) loss
 attributable to the
 noncontrolling interest            (7)     (2,064)     1,314       (3,323)
                            ----------  ----------  ---------   ----------
Net income (loss)
 attributable to STATS
 ChipPAC Ltd.               $    2,223  $   37,332  $ (48,844)  $   64,782
                            ==========  ==========  =========   ==========

Net income (loss) per
 ordinary share
 attributable to STATS
 ChipPAC Ltd.:
  Basic                     $     0.00  $     0.02  $   (0.02)  $     0.03
  Diluted                   $     0.00  $     0.02  $   (0.02)  $     0.03

Ordinary shares (in
 thousands) used in per
 ordinary share
 calculation:
  Basic                      2,202,218   2,202,218  2,202,218    2,202,218
  Diluted                    2,202,223   2,202,240  2,202,218    2,202,239

Key Ratios and Information:
Gross Margin                      15.1%       21.5%       8.5 %       20.8%
Operating Expenses as a %
 of Revenue                       10.4%        8.6%      13.7 %        8.7%
Operating Margin                   4.7%       12.9%      (5.2)%       12.1%

Depreciation &
 Amortization, including
 Amortization of Debt
 Issuance Costs             $   67,324  $   69,365  $ 133,979   $  137,180
Capital Expenditures        $   32,350  $   67,650  $  41,843   $  167,037





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

                                                    December 27,  June 27,
                                                       2009        2010
                                                    ----------- -----------
                                                                (Unaudited)
ASSETS
Current assets:
  Cash, cash equivalents and marketable securities  $   351,195 $   364,216
  Accounts receivable, net                              208,766     255,420
  Inventories                                            61,859      65,836
  Other current assets *                                 52,215      49,012
                                                    ----------- -----------
    Total current assets                                674,035     734,484

  Marketable securities                                  16,929      16,849
  Property, plant and equipment, net                  1,115,497   1,150,227
  Investment in equity investee                           7,743       8,013
  Goodwill and intangible assets                        591,125     590,856
  Other non-current assets *                             21,611      25,319
                                                    ----------- -----------
    Total assets                                    $ 2,426,940 $ 2,525,748
                                                    ----------- -----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts and other payables                       $   182,704 $   213,083
  Other current liabilities                             103,394     104,836
  Short-term debts                                      224,786      77,155
                                                    ----------- -----------
    Total current liabilities                           510,884     395,074
Long-term debts                                         233,181     374,254
Other non-current liabilities                            59,329      65,847
                                                    ----------- -----------
    Total liabilities                                   803,394     835,175
                                                    ----------- -----------
STATS ChipPAC Ltd. shareholders' equity               1,564,669   1,629,702
                                                    ----------- -----------
Noncontrolling interest                                  58,877      60,871
                                                    ----------- -----------
    Total liabilities and equity                    $ 2,426,940 $ 2,525,748
                                                    ----------- -----------

* 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 June 27, 2010.




                            STATS ChipPAC Ltd.
                      Other Supplemental Information
                                (Unaudited)


                    
                                                 2Q 2009  1Q 2010  2Q 2010
Net Revenues by Product Line
Packaging - laminate                                58.5%    55.5%    55.6%
Packaging - leaded                                  14.7%    15.3%    15.3%
Test                                                23.0%    22.2%    20.5%
Wafer level processing and other services            3.8%     7.0%     8.6%
                                                 -------  -------  -------
                                                   100.0%   100.0%   100.0%
                                                 =======  =======  =======
Net Revenues by End User Market
Communications                                      53.3%    52.3%    51.5%
Personal Computers                                  17.5%    15.4%    16.1%
Consumer, Multi-applications and Others             29.2%    32.3%    32.4%
                                                 -------  -------  -------
                                                   100.0%   100.0%   100.0%
                                                 =======  =======  =======
Net Revenues by Region
United States of America                            76.2%    61.5%    56.7%
Europe                                               3.9%    12.8%    14.4%
Asia                                                19.9%    25.7%    28.9%
                                                 -------  -------  -------
                                                   100.0%   100.0%   100.0%
                                                 =======  =======  =======

Number of Testers                                    962      929      940
Number of Wirebonders                              4,596    4,538    4,456

Overall Equipment Utilization Rate                    51%      63%      67%

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: