SOURCE: STATS ChipPAC

June 12, 2006 08:00 ET

STATS ChipPAC Streamlines Supply Chain Logistics With Turnkey Solutions Management

Providing Increased Visibility and Efficiency

UNITED STATES -- (MARKET WIRE) -- June 12, 2006 -- SINGAPORE -- 06/12/06 -- STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (NASDAQ: STTS) and (SGX-ST: STATSChP), a leading independent semiconductor test and advanced packaging service provider, today announced it has established a dedicated Turnkey Solutions Management team as part of a comprehensive program to streamline supply chain logistics for wafer bump, wafer sort, package assembly, and final test customers.

As semiconductor companies utilize more complex and collaborative supply chain models to meet ever increasing market pressure for fast time to market at the lowest possible cost, the entire outsourced assembly and test supply chain management process from material procurement to final order fulfillment becomes more complicated and multifaceted. The number of suppliers involved in the supply chain has increased and they are often in multiple geographies. The management of materials and information throughout the supply chain must evolve to provide fast and efficient feedback to stakeholders up and down the supply chain and facilitate rapid response to changes in the demand profile.

Over the last several years, STATS ChipPAC has built its packaging and test portfolio around fully integrated turnkey solutions which encompass wafer sort, wafer bump, assembly, test, and drop shipment. STATS ChipPAC is expanding the standard supply chain management services it provides customers with a specialized team dedicated to Turnkey Solutions Management. This team serves as a resource to customers in working through complex supply chain issues from material management to final shipment of product. They will assist customers in working through transportation and logistics issues so customers can efficiently have a single product manufactured in multiple geographies while meeting cost targets and aggressive cycle times.

"As our industry continues to evolve, we see an increasing opportunity for our company to better serve our customers by taking a more active role in managing the upstream supply chain and reduce the time and energy our customers have to spend on this," said Regina Liew, STATS ChipPAC's Corporate Vice President, Business Account Management. "We manage the complexities of manufacturing in multiple geographies, navigate the often complex transportation and customs issues from one country to the next, and meet stringent time to market deadlines."

With a centralized capacity planning and logistics management process, the Turnkey Solutions Management team examines customer requirements on a global level and determines the optimum factory and geography for products to be built based on the technology requirements, current and future capacity demands, and optimized time to market goals. The Turnkey Solutions Management team works to ensure that the appropriate supply chain is in place and optimized for the specific countries which the customer's products are to be manufactured in.

STATS ChipPAC's Turnkey Solutions Management team utilizes a global information technology network to provide real-time data and reports to ensure customers have better visibility of their supply chains and have a single billing and management process which extends across multiple factories in multiple geographies. A central data warehouse collects pertinent information from each of the Company's factories and provides a single view of the parts as they flow through the manufacturing process. Customers are able to access the status of their lots through a web portal and view scheduled reports or business to business transactions. STATS ChipPAC is currently working to integrate its suppliers into the global IT network in order to further expand supply chain visibility for its customers.

About STATS ChipPAC Ltd.

STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company" (NASDAQ: STTS) and (SGX-ST: STATSChP) is a leading service provider of semiconductor packaging design, assembly, test and distribution solutions. A trusted partner and supplier to leading semiconductor companies worldwide, STATS ChipPAC provides fully integrated, multi-site, end-to-end packaging and testing solutions that bring products to the market faster. Our customers are some of the largest wafer foundries, integrated device manufacturers (IDMs) and fabless companies in the United States, Europe and Asia. STATS ChipPAC is a leader in mixed signal testing and advanced packaging technology for semiconductors used in diverse end market applications including communications, power, digital consumer and computing. With advanced process technology capabilities and a global manufacturing presence spanning Singapore, South Korea, China, Malaysia and Taiwan, STATS ChipPAC has a reputation for providing dependable, high quality test and packaging solutions. The Company's customer support offices are centered in the United States (California's Silicon Valley, Arizona, Texas, Massachusetts, Colorado and North Carolina). Our offices outside the United States are located in South Korea, Singapore, China, Malaysia, Taiwan, Japan, the Netherlands and United Kingdom. STATS ChipPAC's facilities include those of its subsidiary, Winstek Semiconductor Corporation, in Hsinchu District, Taiwan. These facilities offer new product introduction support, pre-production wafer sort, final test, packaging and other high volume preparatory services. Together with our research and development centers in South Korea, Singapore, Malaysia, China, Taiwan and the United States as well as test facilities in the United States, this forms a global network providing dedicated test engineering development and product engineering support for customers from design to volume production. STATS ChipPAC is listed on both the Nasdaq National Market and the Singapore Exchange Securities Trading Limited. In addition, STATS ChipPAC is also included in the Morgan Stanley Capital International (MSCI) Index and the Straits Times Industrial Index. Further information is available at www.statschippac.com. Information contained in this website does not constitute a part of this release.

Certain statements in this press 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 press release. Factors that could cause actual results to differ include 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; reliance on a small group of principal customers; decisions by customers to discontinue outsourcing of test and packaging services; continued success in technological innovations; availability of financing; delays in acquiring or installing new equipment; our substantial level of indebtedness; potential impairment charges; ability to develop and protect our intellectual property; intellectual property rights disputes and litigation; capacity utilization; limitations imposed by our financing arrangements which may limit our ability to maintain and grow our business; pricing pressures including declines in average selling prices; 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; significant ownership by Temasek Holdings (Private) Limited (Temasek Holdings) that may result in conflicting interests with Temasek Holdings and our affiliates; our ability to successfully integrate the operations of former STATS and ChipPAC and their employees; labor union problems in South Korea; uncertainties of conducting business in China; unsuccessful acquisitions and investments in other companies and businesses; and other risks described from time to time in the Company's SEC filings, including its annual report on Form 20-F dated February 28, 2006. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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