STATS ChipPAC Reports Third Quarter 2008 Results

SINGAPORE--10/30/2008, UNITED STATES--(Marketwire - October 29, 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 results for the third quarter 2008.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "Revenue for the third quarter of 2008 of $472.2 million increased by 8.8% over prior quarter and by 14.0% over the third quarter of 2007. We recorded strong revenue growth in the third quarter despite the challenging global macroeconomic conditions with broad-based customer demand increase in all major markets."

Net income for the third quarter of 2008, including $21.1 million in equipment impairment charges and $5.1 million in restructuring expenses, decreased by 71.7% to $7.9 million or $0.00 per diluted ordinary share, compared to net income of $27.9 million or $0.01 per diluted ordinary share in the third quarter of 2007.

John Lau, Chief Financial Officer of STATS ChipPAC, said, "We implemented cost control measures to closely align expenses with our business growth and profitability, resulting in restructuring expenses of $5.1 million in the third quarter of 2008. Gross margin for the third quarter of 2008 was 18.5% compared to 17.2% in the prior quarter, and 20.3% in the third quarter of 2007. Our operating margin for the third quarter of 2008, including $21.1 million in equipment impairment charges and $5.1 million in restructuring expenses, was 4.6% of revenue, compared to 8.1% in the prior quarter, and 11.7% in the third quarter of 2007. Capital spending in the third quarter of 2008 was 20.6% of revenue compared to 14.8% in the prior quarter, and 21.4% in the third quarter of 2007. Capital spending increased as we invested in a new wafer bump line to support the growth of our flip chip business."

Forward-looking Statements

Certain statements in this release, including statements regarding expected future financial results and industry growth, 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; 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; our proposed capital reduction and cash distribution; availability of financing; prevailing market conditions; our ability to meet the applicable requirements for the termination of registration under the U.S. Securities Exchange Act of 1934, as amended; 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.

Since the beginning of fiscal 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 third quarter of 2008 ended on September 28, 2008, while our third quarter of 2007 ended on September 30, 2007. 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     Nine Months Ended
                              --------------------  ----------------------
                              September  September  September   September
                                 30,        28,         30,         28,
                                2007       2008        2007        2008
                              ---------  ---------  ----------  ----------
Net revenues                  $ 414,231  $ 472,191  $1,174,884  $1,333,575
Cost of revenues               (330,337)  (384,829)   (946,484) (1,096,985)
                              ---------  ---------  ----------  ----------
Gross profit                     83,894     87,362     228,400     236,590

Operating expenses:
   Selling, general and
    administrative               26,603     29,296      82,638      89,378
   Research and development       9,006     10,100      26,176      29,384
   Equipment impairment               -     21,091           -      21,091
   Restructuring charges              -      5,130         990       6,030
   Accelerated share-based
    compensation                      -          -           -       1,562
   Tender offer expenses              -          -      10,922           -
   Held for sale asset
    impairment                        -          -       1,725           -
                              ---------  ---------  ----------  ----------
       Total operating
        expenses                 35,609     65,617     122,451     147,445
                              ---------  ---------  ----------  ----------

Operating income                 48,285     21,745     105,949      89,145
Other income (expenses), net     (8,242)    (7,340)    (25,464)    (17,465)
                              ---------  ---------  ----------  ----------
Income before income taxes       40,043     14,405      80,485      71,680
Income tax expense              (10,812)    (4,921)    (24,245)    (19,550)
                              ---------  ---------  ----------  ----------
Income before minority
 interest                        29,231      9,484      56,240      52,130
Minority interest                (1,369)    (1,602)     (3,902)     (4,279)
                              ---------  ---------  ----------  ----------
Net income                    $  27,862  $   7,882  $   52,338  $   47,851
                              =========  =========  ==========  ==========

Net income per ordinary
 share:
   Basic                      $    0.01  $    0.00  $     0.03  $     0.02
   Diluted                    $    0.01  $    0.00  $     0.02  $     0.02

Ordinary shares (in
 thousands) used in per
 ordinary share calculation:
   Basic                      2,043,247  2,202,163   2,028,171   2,124,512
   Diluted                    2,194,438  2,204,307   2,185,182   2,127,594

Key Ratios and Information:
Gross Margin                       20.3%      18.5%       19.4%       17.7%
Operating Expenses as a % of
 Revenue                            8.6%      13.9%       10.4%       11.0%
Operating Margin                   11.7%       4.6%        9.0%        6.7%

Depreciation & Amortization,
 including Amortization of
 Debt Issuance Costs          $  62,883  $  73,227  $  186,967  $  218,052
Capital Expenditures          $  88,817  $  97,262  $  200,976  $  216,579

Share-based compensation
 expense included under SFAS
 123(R) were as follows:
   Cost of revenues           $   1,115  $      97  $    3,672  $      807
   Selling, general and
    administrative                  742         57       2,482         751
   Research and development         204         19         776         192
   Accelerated share-based
    compensation                      -          -           -       1,562
                              ---------  ---------  ----------  ----------
                              $   2,061  $     173  $    6,930  $    3,312
                              =========  =========  ==========  ==========



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



                                                     December   September
                                                        30,         28,
                                                       2007        2008
                                                    =========== ===========
                                                                (Unaudited)
ASSETS
Current assets:
  Cash, cash equivalents and marketable securities  $   242,691 $   290,239
  Accounts receivable, net                              271,360     275,161
  Inventories                                            83,312      86,889
  Other current assets                                   38,489      34,361
                                                    =========== ===========
    Total current assets                                635,852     686,650

  Marketable securities                                  15,296      15,332
  Property, plant and equipment, net                  1,276,490   1,264,248
  Investment in equity investee                          10,350      10,021
  Goodwill and intangible assets                        588,712     596,064
  Other non-current assets *                             70,254      56,836
                                                    =========== ===========
    Total assets                                    $ 2,596,954 $ 2,629,151
                                                    =========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts and other payables                       $   235,044 $   251,291
  Other current liabilities                             128,417     156,938
  Short-term debts                                      240,781      88,837
                                                    =========== ===========
    Total current liabilities                           604,242     497,066
Long-term debts                                         423,853     409,672
Other non-current liabilities                           125,093      86,469
                                                    =========== ===========
    Total liabilities                                 1,153,188     993,207
                                                    =========== ===========
Minority interest                                        59,797      60,843
                                                    =========== ===========
Shareholders' equity                                  1,383,969   1,575,101
                                                    =========== ===========
    Total liabilities and shareholders' equity      $ 2,596,954 $ 2,629,151
                                                    =========== ===========


  * Includes $1.0 million and $1.6 million of non-current restricted cash
    as of September 28,2008 and December 30, 2007, respectively.



                            STATS ChipPAC Ltd.
                      Other Supplemental Information
                                (Unaudited)



                                            3Q 2007    2Q 2008    3Q 2008
Net Revenues by Product Line
Packaging - laminate                            56.4%      57.0%      58.7%
Packaging - leaded                              18.5%      17.9%      17.5%
Test and other services                         25.1%      25.1%      23.8%
                                           ---------  ---------  ---------
                                               100.0%     100.0%     100.0%
                                           =========  =========  =========
Net Revenues by End User Market
Communications                                  52.4%      52.6%      51.7%
Personal Computers                              14.6%      14.3%      15.8%
Consumer, Multi-applications and Others         33.0%      33.1%      32.5%
                                           ---------  ---------  ---------
                                               100.0%     100.0%     100.0%
                                           =========  =========  =========
Net Revenues by Region
United States of America                        73.9%      73.1%      71.4%
Europe                                           3.3%       4.2%       5.2%
Asia                                            22.8%      22.7%      23.4%
                                           ---------  ---------  ---------
                                               100.0%     100.0%     100.0%
                                           =========  =========  =========

Number of Testers                                891      1,020        994
Number of Wirebonders                          3,933      4,715      4,760

Overall Equipment Utilization Rate                78%        67%        70%

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: