UNITED STATES, Jan 24, 2007 (MARKET WIRE via COMTEX) -- SINGAPORE -- 1/25/2007 -- STATS ChipPAC Ltd., a leading independent semiconductor test and advanced packaging service provider, today announced results for the fourth quarter and full year 2006.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC said, "The fourth quarter concluded a record year for our company. We achieved the highest revenue and profits in the history of our company. We also generated free cash flow and significantly improved our capital efficiency.

Our capital expenditures in 2006 were $348.5 million or 21.6% of revenue, compared to $277.7 million or 24.0% of revenue in 2005, which supported nearly 40% revenue growth in 2006.

We believe our financial performance over the last two years validates the resiliency of our post-merger business model. With a broader and more diversified customer base and end markets exposure, more comprehensive service offerings, enhanced leadership in technology and a global manufacturing footprint, we are better positioned to deliver more stable operational and financial performance through the semiconductor industry cycles."

Revenue for the fourth quarter of 2006 increased 16.4% to $416.0 million, compared to $357.5 million in the fourth quarter of 2005. This represents a sequential increase of 4.8% compared to the third quarter of 2006. On a US GAAP basis, net income for the fourth quarter of 2006 was $28.3 million or $0.13 per diluted ADS, compared to net income of $16.9 million or $0.08 per diluted ADS in the fourth quarter of 2005. US GAAP results for the fourth quarter of 2006 and 2005 include $8.2 million and $13.9 million in special items and costs associated with the merger of STATS and ChipPAC, respectively. Excluding the special items and including certain adjustments, non-GAAP adjusted net income for the fourth quarter of 2006 was $36.5 million or $0.17 per diluted ADS, compared to a non-GAAP adjusted net income of $30.8 million or $0.15 per diluted ADS in the fourth quarter of 2005. Results for the fourth quarter of 2006 include $3.0 million in share-based compensation expense as required under SFAS 123(R).

Revenue for the full year 2006 increased 39.7% to $1.6 billion, compared to $1.2 billion in 2005. On a US GAAP basis, net income for the full year 2006 was $76.8 million or $0.37 per diluted ADS, compared to a net loss of $(26.3) million or a net loss of $(0.13) per diluted ADS in 2005. US GAAP results for the full year 2006 and 2005 include $48.8 million and $59.6 million in special items and costs associated with the merger of STATS and ChipPAC, respectively. Excluding the special items and including certain adjustments, non-GAAP adjusted net income for the full year 2006 was $125.6 million or $0.59 per diluted ADS, compared to a non-GAAP adjusted net income of $33.3 million or $0.17 per diluted ADS in 2005. Results for the full year 2006 include $13.7 million in share-based compensation expense as required under SFAS 123(R).

Michael G. Potter, Chief Financial Officer of STATS ChipPAC said, "We further established STATS ChipPAC as a leader in our industry and significantly improved our financial metrics. In the fourth quarter alone, we achieved positive free cash flow, reduced our debt and improved our balance sheet. We maintained a disciplined approach to capital expenditures spending during this period, while fully supporting our customers globally. We will remain focused on taking additional costs out of all parts of our business and further improving customer service. We expect to be able to continue funding capital expenditures from the cash we generate from our business and without increasing our debt level. For the full year 2007, we expect capital expenditures to be approximately $250 million, depending on business conditions."

Outlook

Tan Lay Koon, commented, "Industry sources currently expect the overall semiconductor industry to grow about 7% in 2007. Historically, we have outpaced the growth of the semiconductor industry and we believe we are well positioned to benefit from the growing outsourcing trend and from our strategic positioning in the higher growth communication, computing and consumer markets. In 2007, we will continue to focus on margin expansion and return on invested capital, and further improve our capital efficiency and cash flow generation.

As for the first quarter of 2007, our current customer forecasts reflect the seasonal slowdown in the semiconductor industry and their general caution. Specifically, we currently expect revenue in the first quarter of 2007 to be approximately in the range of $374.0 million to $391.0 million or in the range of 6% to 10% lower than the fourth quarter of 2006, with US GAAP net income in the range of $12.0 million to $21.0 million, which represents US GAAP net income per diluted ADS of $0.06 to $0.10, including the impact of approximately $0.02 per ADS for the expensing of share-based compensation."

Investor Conference Call / Webcast Details

A conference call has been scheduled for 8:00 a.m. in Singapore on Thursday, January 25, 2007. This will be 7:00 p.m. in New York on Wednesday, January 24, 2007. During the call, time will be set-aside for analysts and interested investors to ask questions of executive officers.

The call may be accessed by dialing +1-201-689-8560. A live webcast of the conference call will be available on STATS ChipPAC's website at www.statschippac.com. A replay of the call will be available 3 hours after the live call through 12:59 p.m. on Thursday, February 1, 2007 (in Singapore) or 11:59 p.m. on Wednesday, January 31, 2007 (in New York) at www.statschippac.com and by telephone at +1-201-612-7415. The account number to access the replay is 3055 and the conference ID number is 225166.

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