20-F

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)

o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

or

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 27, 2009

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

or

o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report __________

Commission file number 000-29103

STATS ChipPAC Ltd.

(Exact Name of Registrant as specified in its charter)

	10 Ang Mo Kio Street 65
	#05-17/20 Techpoint
Republic of Singapore	Singapore 569059
(Jurisdiction of incorporation or organization)	(Address of principal executive offices)

Janet T. Taylor
General Counsel
10 Ang Mo Kio Street 65
#05-17/20 Techpoint
Singapore 569059
Telephone: (65) 6824 7777 Facsimile: (65) 6720 7829

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

None	None
(Title of Class)	(Name of Exchange on which registered)

Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None

     Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

2,202,218,293 Ordinary Shares of Registrant.

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o     No þ

     If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes þ     No o

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes o     No þ

     Note: The registrant, as a voluntary filer, is not subject to the filing requirements under Section 13 or 15(d) of the Securities Exchange Act of 1934, but has been filing all reports required to be filed by those sections for the preceding 12 months.

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Securities Exchange Act of 1934. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o

     Note: The registrant deregistered and terminated its reporting obligations under the Act in August 2009 and is filing this annual report on Form 20-F as a voluntary filer.

     Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP þ International Financial Reporting Standards as issued by the
International Accounting Standards Board o Other o

     If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o     Item 18 o

     If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes o     No þ

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

     Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o     No o

TABLE OF CONTENTS

		PAGE
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS		2
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE		2
ITEM 3.	KEY INFORMATION		2
ITEM 4.	INFORMATION ON THE COMPANY		24
ITEM 4A.	UNRESOLVED STAFF COMMENTS		48
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS		48
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		69
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		83
ITEM 8.	FINANCIAL INFORMATION		86
ITEM 9.	THE OFFER AND LISTING		87
ITEM 10.	ADDITIONAL INFORMATION		88
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		102
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		103
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		103
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		103
ITEM 15.	CONTROLS AND PROCEDURES		103
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT		104
ITEM 16B.	CODE OF ETHICS		104
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES		105
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE		106
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS		106
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT		106
ITEM 16G.	CORPORATE GOVERNANCE		106
ITEM 17.	FINANCIAL STATEMENTS		106
ITEM 18.	FINANCIAL STATEMENTS		106
ITEM 19.	EXHIBITS		107
SIGNATURES			110
INDEX TO FINANCIAL STATEMENTS			F-1
Ex-1.2 Amended Articles of Association of STATS ChipPAC Ltd.
Ex-4.24 STATS ChipPAC Ltd. Performance Share Plan 2009
Ex-4.25 STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors
Ex-4.44 English translation of Chinese language US$3,000,000 Loan Contract dated June 30, 2009 by and between STATS ChipPAC Shanghai Co., Ltd. and Bank of Communications Co., Ltd.
Ex-4.45 English translation of Chinese language US$12,000,000 Loan Contract dated June 30, 2009 by and between STATS ChipPAC Shanghai Co., Ltd. and Bank of Communications Co., Ltd.
Ex-4.46 US$25,000,000 Uncommitted Facility Agreement dated September 4, 2009 by and between STATS ChipPAC Korea Ltd. and DBS Bank Ltd.
Ex-12.1 Certification by the Chief Executive Officer pursuant to 17 CFR 240. 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Ex-12.2 Certification by the Chief Financial Officer pursuant to 17 CFR 240. 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Ex-13.1 Certification by the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002
Ex-13.2 Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Ex-15.1 Consent of PricewaterhouseCoopers LLP, Singapore, independent registered public accounting firm

GENERAL INFORMATION

     References to “U.S. dollars,” “$” and “US$” in this annual report mean United States dollars, the legal currency of the United States of America. References to “Singapore dollars” and “S$” mean Singapore dollars, the legal currency of the Republic of Singapore. References to “South Korean Won” and “KRW” mean Korean Republic Won, the legal currency of the Republic of Korea. References to “Chinese Renminbi” and “RMB” mean Chinese Renminbi, the legal currency of People’s Republic of China. References to “Malaysian Ringgit” and “MYR” mean Malaysian Ringgit, the legal currency of Malaysia. References to “Thai Baht” and “THB” mean Thai Baht, the legal currency of Thailand. References to “New Taiwan dollar” and “NT$” mean New Taiwan dollars, the legal currency of Taiwan. References to “Japanese Yen” and “¥” mean Japanese Yen, the legal currency of Japan. The closing rate appearing on Reuters on February 1, 2010 was S$1.41 per $1.00 for Singapore dollars, KRW1,165.75 per $1.00 for South Korean Won, RMB6.83 per $1.00 for Chinese Renminbi, MYR3.42 per $1.00 for Malaysian Ringgit, Thai Baht 33.18 per $1.00 for Thai Baht, NT$32.02 per $1.00 for New Taiwan dollars and ¥90.63 per $1.00 for Japanese Yen. For your convenience, unless otherwise indicated, certain amounts in these currencies have been translated into U.S. dollars based on these exchange rates. Certain amounts (including percentage amounts) have been rounded for convenience; as a result, certain figures may not sum to total amounts or equal quotients.

     No representation is made that the U.S. dollar, Singapore dollar, South Korean Won, Chinese Renminbi, Malaysian Ringgit, Thai Baht, New Taiwan dollar or Japanese Yen amounts shown in this annual report could have been or could be converted at such rate or at any other rate.

     In this annual report, unless otherwise specified or the context requires, the terms “our Company,” “STATS ChipPAC,” “we,” “our,” and “us” refer to STATS ChipPAC Ltd., a Singapore incorporated company, and its consolidated subsidiaries.

     Our ordinary shares, no par value, are listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”) under the ticker symbol “STATSChP.” Prior to December 31, 2007, our ordinary shares were also traded in the form of American Depositary Shares (“ADSs”) (each representing ten ordinary shares) in the U.S. on the Nasdaq Global Select Market (“Nasdaq”) under the ticker symbol “STTS.” We voluntarily delisted our ADSs from Nasdaq, effective December 31, 2007, and terminated our American Depositary Receipt (“ADR”) program with effect from April 30, 2008. On May 22, 2009, we filed a certification on Form 15F with the U.S. Securities and Exchange Commission (“SEC”) to deregister and terminate our reporting obligations under the U.S. Securities Exchange Act of 1934, as amended (“Exchange Act”), with respect to our ordinary shares, and our 6.75% senior notes due 2011 and our 7.5% senior notes due 2010 (together, “our senior notes”). Under the SEC’s rules, our SEC reporting obligations under the Exchange Act were immediately suspended upon the filing of the Form 15F and the deregistration became effective 90 days after the filing on August 20, 2009. However, we remain obligated under our senior notes to continue filing with or submitting to the SEC the reports required under the terms of our senior notes on a voluntary basis.

     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 first three quarters of 2009 ended on March 29, June 28 and September 27, respectively, and our fourth quarter and fiscal year 2009 ended on December 27. Our first three quarters of 2008 ended on March 30, June 29 and September 28, respectively, and our fourth quarter and fiscal year 2008 ended on December 28. Our first three quarters of 2007 ended on April 1, July 1 and September 30, respectively, and our fourth quarter and fiscal year 2007 ended on December 30. Our first three quarters of 2006 ended on March 26, June 25 and September 24, respectively, and our fourth quarter and fiscal year 2006 ended on December 31. Our first three quarters of 2005 ended on March 27, June 26 and September 25, respectively, and our fourth quarter and fiscal year 2005 ended on December 25. Unless otherwise stated, all years and dates refer to STATS ChipPAC’s fiscal years.

FORWARD-LOOKING STATEMENTS

     Certain of the statements in this annual report on Form 20-F are forward-looking statements that are based on management’s current views and assumptions and involve a number of risks and uncertainties which could cause actual results to differ materially. These include statements regarding the continued trading and listing of our ordinary shares on the SGX-ST, our financial condition and results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies and synergies, budget, capital and other expenditures, competitive positions, growth opportunities for existing products, benefits from new technology, plans or objectives of management, outcome of litigation, industry growth, the impact of regulatory initiatives, markets for our securities and other statements on underlying assumptions, other than statements of historical fact, including but not limited to those that are identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects” and similar expressions.

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     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 (“PCs”); 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 canceling 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; and other risks described in “Item 3. Key Information — D. Risk Factors.”

     You should not unduly rely on such statements. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this annual report to reflect subsequent events or circumstances.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

     Not applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

     Not applicable

ITEM 3. KEY INFORMATION

A. Selected Financial Data

     You should read the following selected consolidated financial data in conjunction with our consolidated financial statements and the related notes and “Item 5. Operating and Financial Review and Prospects” included elsewhere in this annual report. The selected consolidated financial data as of December 28, 2008 and December 27, 2009 and for 2007, 2008 and 2009 are derived from our consolidated financial statements which have been audited by PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, and are included in “Item 18. Financial Statements.” The selected consolidated financial data as of December 25, 2005, December 31, 2006 and December 30, 2007 and for 2005 and 2006 are derived from our audited consolidated financial statements, which are not included in this annual report.

     Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

	Year Ended
	December 25,			December 31,			December 30,			December 28,			December 27,
	2005			2006			2007			2008			2009
	(In thousands except per share data)
Statement of Operations Data:
Net revenues	$	1,157,253		$	1,616,933		$	1,651,560		$	1,658,188		$	1,325,685
Cost of revenues		(968,023	)		(1,290,773	)		(1,330,284	)		(1,383,797	)		(1,117,308	)
Gross profit		189,230			326,160			321,276			274,391			208,377

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	Year Ended
	December 25,			December 31,			December 30,			December 28,			December 27,
	2005			2006			2007			2008			2009
	(In thousands except per share data)
Operating expenses:
Selling, general and administrative		135,751			139,466			112,593			118,337			95,516
Research and development		26,071			30,446			34,918			37,825			43,358
Restructuring charges (1)		830			1,938			990			19,790			16,072
Equipment impairment (2)		—			—			—			21,091			—
Accelerated share-based compensation		—			—			—			1,562			—
Tender offer expenses		—			—			10,922			—			—
Held for sale asset impairment (3)		—			—			1,725			—			—
Total operating expenses		162,652			171,850			161,148			198,605			154,946
Operating income (4)		26,578			154,310			160,128			75,786			53,431
Other income (expense), net:
Interest income (expense), net		(36,215	)		(40,415	)		(33,192	)		(30,301	)		(28,887	)
Foreign currency exchange gain (loss)		531			(1,578	)		2,487			5,247			(6,469	)
Equity income (loss) from investment in equity investee		—			152			102			(1,437	)		(1,321	)
Other non-operating income (expense), net		(1,076	)		108			(442	)		27			(2,016	)
Total other expense, net		(36,760	)		(41,733	)		(31,045	)		(26,464	)		(38,693	)
Income (loss) before income taxes		(10,182	)		112,577			129,083			49,322			14,738
Income tax expense		(9,689	)		(25,759	)		(29,581	)		(19,172	)		(3,712	)
Net income (loss)		(19,871	)		86,818			99,502			30,150			11,026
Less: Net income attributable to the noncontrolling interest		(6,440	)		(10,010	)		(5,818	)		(4,448	)		(973	)
Net income (loss) attributable to STATS ChipPAC	$	(26,311	)	$	76,808		$	93,684		$	25,702		$	10,053
Net income (loss) per ordinary share attributable to STATS ChipPAC:
Basic	$	(0.01	)	$	0.04		$	0.05		$	0.01		$	0.00
Diluted	$	(0.01	)	$	0.04		$	0.04		$	0.01		$	0.00
Net income (loss) per ADS attributable to STATS ChipPAC (5):
Basic	$	(0.13	)	$	0.39		$	0.46			n.a.			n.a.
Diluted	$	(0.13	)	$	0.37		$	0.44			n.a.			n.a.
Ordinary shares (in thousands) used in per ordinary share calculation:
Basic		1,961,950			1,991,110			2,032,962			2,143,934			2,202,218
Diluted		1,961,950			2,161,545			2,188,687			2,146,249			2,202,230
ADS (in thousands) used in per ADS calculation (5):
Basic		196,195			199,111			203,296			n.a.			n.a.
Diluted		196,195			216,154			218,869			n.a.			n.a.

	Year Ended
	December 25,			December 31,			December 30,			December 28,			December 27,
	2005			2006			2007			2008			2009
	(In thousands except per share data)
Other Financial Data:
Depreciation and amortization, including amortization of debt issuance cost	$	256,099		$	268,688		$	256,913		$	286,428		$	268,349
Amortization of leasing prepayments		25,790			7,386			11			—			—
Capital expenditures		277,712			348,495			268,754			239,020			159,222
Net cash provided by operating activities		270,729			427,771			411,512			419,525			174,872
Net cash used in investing activities		(262,993	)		(425,783	)		(299,088	)		(283,714	)		(164,482	)
Net cash used in financing activities	$	(9,423	)	$	(54,861	)	$	(70,450	)	$	(53,465	)	$	(17,495	)

	As Of
	December 25,		December 31,		December 30,		December 28,		December 27,
	2005		2006		2007		2008		2009
	(In thousands except per share data)
Balance Sheet Data:
Cash and cash equivalents	$	224,720	$	171,457	$	213,461	$	295,916	$	288,683
Working capital		250,369		227,967		31,610		192,588		163,151
Total assets		2,393,382		2,458,280		2,596,954		2,447,063		2,426,940

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	As Of
	December 25,		December 31,		December 30,		December 28,		December 27,
	2005		2006		2007		2008		2009
	(In thousands except per share data)
Net assets		1,190,321		1,304,096		1,443,766		1,607,699		1,623,546
Current installments of obligations under capital leases		7,091		3,680		—		—		—
Short-term borrowings and current installments of long-term debt		35,542		61,693		240,781		76,953		224,786
Obligation under capital leases, excluding current installments		3,680		—		—		—		—
Long-term debt, excluding current installments		775,425		697,523		423,853		396,500		233,181
Shareholders’ equity		1,141,652		1,246,150		1,383,969		1,548,657		1,564,669
Share capital (6)		303,052		1,847,002		1,891,546		2,035,235		2,035,573
Additional paid-in capital (6)	$	1,517,118	$	—	$	—	$	—	$	—
Ordinary shares outstanding (in thousands)		1,976,292		2,002,814		2,047,334		2,202,218		2,202,218

Notes:
(1)	Restructuring charges recorded in connection with our reduction of our workforce of $830,000, $1,938,000, $990,000, $19,790,000 and $16,072,000 in 2005, 2006, 2007, 2008 and 2009, respectively, to align our operating costs with the operating environment during those periods and to realign our organization’s structure and efficiency.
(2)	In 2008, we recorded equipment impairment charges of $21,091,000 as a result of our ongoing assessment of property, plant and equipment for impairment.
(3)	In 2007, we recorded impairment charges of $1,725,000 on the disposal of the packaging and test equipment related to discrete power packages to Ningbo Mingxin Microelectronics Co. Ltd. (“Mingxin”).
(4)	Includes intrinsic value of share-based compensation of $743,000, in 2005, and fair value of share-based compensation of $13,688,000, $8,869,000, $3,570,000 and $501,000 in 2006, 2007, 2008 and 2009, respectively.
(5)	We voluntarily delisted our ADSs from Nasdaq effective December 31, 2007.
(6)	Effective January 30, 2006, our Company was subjected to the amendments promulgated under the Companies (Amendment) Act of 2005 of Singapore. These amendments included the abolition of the ordinary share par value and authorized capital. As a result of the abolition of the ordinary share par value, the balance of additional paid-in capital, amounting to $1,517,175,000 became part of our share capital as of January 30, 2006.

B. Capitalization and Indebtedness

     Not applicable

C. Reasons for the Offer and Use of Proceeds

     Not applicable

D. Risk Factors

     In addition to the other information and risks described elsewhere in this annual report, our business is subject to the following risks:

Risks Relating to Our Company

The current global economic condition has adversely affected the semiconductor markets and the demand for our products and services, and a protracted global economic crisis would have a material adverse effect on us.

     Our customers include a range of organizations in the semiconductor industry whose success is intrinsically linked to the health of the economy generally and of the semiconductor markets specifically. The semiconductor industry is highly cyclical and experiences significant fluctuations in customer demand, evolving industry standards, competitive pricing pressure that leads to steady declines in

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average selling prices, rapid technological changes, risk associated with foreign currencies and enforcement of intellectual property rights. Additionally, the market in which we operate is very competitive. The United States and other countries have experienced difficult economic conditions, including unprecedented financial market disruption. The current downturn in the global economy and the semiconductor markets that accelerated during the second half of 2008 and continued well into 2009 have adversely affected, and we expect will continue to affect, demand for our products and services. Our revenue decreased 20.0% in 2009 compared to 2008 primarily due to lower demand for our services as a result of the global economic downturn. The protracted decline in the global economy and semiconductor markets may also cause our customers to do the following:

• cancel or reduce planned expenditures for our products and services;

• seek to lower their costs by renegotiating their contracts with us;

• consolidate the number of suppliers they use which may result in our loss of customers; or

• switch to lower-priced products or services provided by our competitors.

     The current uncertainty in global economic conditions may also make it difficult for our customers to accurately forecast and plan future business activities. We cannot predict the timing, strength, or duration of the global economic slowdown and downturn in the semiconductor industry or subsequent recovery. Despite the recent improvement in the global economic conditions, the uncertainty in global economic conditions remains and there can be no assurance that global economic conditions will continue to improve. A sustained global economic slowdown and downturn in the semiconductor industry would have a material adverse effect on our results of operations, cash flow, financial position and/or prospects.

Downturns in the semiconductor industry have adversely affected our operating results and may continue to adversely affect our operating results.

     Our results of operations have been and will be significantly affected by conditions in the semiconductor industry. Downturns in the semiconductor industry are characterized by:

• decreases in product demand;

• excess capacity;

• excess inventories;

• increased competition from competitors; and

• accelerated erosion in average selling prices.

     In late 2006, we experienced a softening of our business as our customers corrected their excess inventory positions. In 2008, the semiconductor industry again experienced excess inventory issues due to the weakening global economic conditions and weakening in the semiconductor markets that accelerated in the second half of 2008 and continued well into 2009. Even though there was some level of recovery in the second half of 2009, there is no assurance that there will not be a further decline in the semiconductor industry in 2010 and beyond which will result in a material adverse effect on our business, financial condition and results of operations.

A decrease in demand for communications equipment, consumer and multi-applications, or PCs may adversely affect our business.

     Substantially all of our net revenues are derived from customers who use our test or packaging services for semiconductors used in communications equipment, consumer and multi-applications, or PCs. The significant decrease in the demand for communications equipment, consumer and multi-applications, or PCs that we experienced in the fourth quarter 2008 through to 2009 has had a negative impact on our business, financial condition and results of operations. There is no assurance that demand for communications equipment, consumer and multi-applications, or PCs will not continue to decrease in 2010 and beyond which will result in a material adverse effect on our business, financial condition and results of operations.

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     In addition, the declining average selling prices of communications equipment, consumer and multi-applications, or PCs place significant pressure on the prices of the components that are used in these products. If the average selling prices of communications equipment, consumer and multi-applications, or PCs continue to decrease, the pricing pressure on services provided by us may reduce our net revenues and therefore significantly reduce our gross profit margin.

Decisions by our IDM customers to curtail outsourcing may adversely affect our business.

     Historically, we have been dependent on the trend in outsourcing of packaging and test services by integrated device manufacturers (“IDMs”). Our IDM customers continually evaluate the outsourced services against their own in-house packaging and test services. As a result, at any time, IDMs may decide to shift some or all of their outsourced packaging and test services to internally sourced capacity. Any such shift or a slowdown in this trend of outsourcing packaging and test services is likely to adversely affect our business, financial condition and results of operations.

     In a downturn in the semiconductor industry, IDMs would typically respond by shifting some outsourced packaging and test services to internally serviced capacity on a short-term basis. This would have a material adverse effect on our business, financial condition and results of operations.

We may not be able to compete successfully in our industry.

     The independent semiconductor assembly and test service (“SATS”) industry is very competitive and diverse, and requires us to bring the most technologically advanced packages to market as quickly as our competitors as well as be capable of testing increasingly complex semiconductors. The industry comprises both large multi-national companies and small niche market competitors. We face intense competition from a number of competitors including, among others, Advanced Semiconductor Engineering, Inc., Amkor Technology, Inc. and Siliconware Precision Industries Co., Ltd. Their facilities are also primarily located in the Asia Pacific region.

     Each of these companies has significant manufacturing capacity, financial resources, research and development operations, marketing and other capabilities and has been in operation for some time. Such companies have also established relationships with many of our current or potential customers.

     We also face competition from the internal capabilities and capacity of many of our current and potential IDM customers. Many IDMs have greater financial, technical and other resources than we have and may rely on internal sources for packaging and test services for a number of reasons including due to:

• their desire to realize higher utilization of their existing test and packaging capacity;

• their unwillingness to disclose proprietary technology;

• their possession of more advanced packaging and testing technologies; and

• the guaranteed availability of their own packaging and test capacity.

     We cannot assure you that we will be able to compete successfully in the future against our existing or potential competitors or that our customers will not rely on internal sources for test and packaging services, or that our business, financial condition and results of operations will not be adversely affected by such increased competition.

We depend on a small number of customers for a significant portion of our revenues and any decrease in sales to any of them could adversely affect our business and results of operations.

     We are dependent on a small group of customers for substantially all of our net revenues. In 2009, our ten largest customers accounted for 71.8% of our net revenues. Our top three largest customers contributed approximately 14%, 13% and 12%, respectively, of our net revenues.

     Although no single customer is expected to account for more than 15% of our Company’s net revenues, we anticipate that our ten largest customers will continue to account for a significant portion of our net revenues for the foreseeable future. Our ability to retain and grow our business with these and other customers, and to add new customers, is important to our ongoing success. However, we

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believe our ability to grow our business with these and other customers is limited because our customers typically allocate their requirements to more than one supplier to limit their dependence on any one supplier. Furthermore, the loss of one or more of our ten largest customers due to the termination of product lines, shifting of business to their other suppliers or otherwise, financial difficulties or reduced and delayed demand from any of our ten largest customers, could have a material adverse effect on our business, financial condition and results of operations. In 2007, two of our 2006 top ten customers significantly decreased their business with us primarily due to a decline in demand from their end customers and shifting of business to their other suppliers, as a result of which one of them ceased to be among our top ten customers in 2007.

     In line with industry practice, new customers usually require us to pass a lengthy and rigorous qualification process that can take up to six months at a significant cost to the customer. As a result, customers are reluctant to qualify new packaging and test service providers and it may be difficult for us to attract new major customers and/or break into new markets. In addition, if we fail to qualify packages with potential customers or customers with whom we have recently become qualified do not use our services, then our customer base could become more concentrated with an even more limited number of customers accounting for a significant portion of our net revenues. Furthermore, we believe that once a semiconductor company has selected a particular packaging and test company’s services, the semiconductor company generally relies on that supplier’s packages for specific applications and, to the extent possible, subsequent generations of that supplier’s packages. Accordingly, it may be difficult to achieve significant sales from a customer once it selects another supplier’s packaging and test services. See “Item 4. Information on the Company — B. Business Overview — Customers.”

We may not be able to develop or access leading technology which may affect our ability to compete effectively.

     The semiconductor packaging and test markets are characterized by rapid technological change and increasing complexity. We must be able to offer our customers packaging and test services based upon the most advanced technology. This requirement could result in significant research and development expenditures and capital expenditures in the future. We periodically review our equipment for obsolescence and impairment. If we determine that, due to technological advances, changes in market direction, reduced demand in certain end markets or otherwise, the anticipated future usage of any of our equipment has been diminished, we will write down the carrying book values of such equipment. For example, we recognized an equipment impairment charge of $21.1 million in 2008 as a result of our Company’s ongoing assessment of property, plant and equipment for impairment. We cannot assure you that we would not have to further write down the carrying book values of our equipment in the future.

     Developing new technology may result in longer sales cycles and product implementations, which may cause revenue and operating income to fluctuate or fail to meet expectations. Also, we would miss the opportunity to benefit from the higher average selling prices which are derived from newer and emerging packaging and test services. In addition, our choice of test and packaging equipment is important because obtaining the wrong test and packaging equipment or failing to understand market requirements will make us less competitive and will lower our asset utilization. In order to remain competitive, we must be able to upgrade or migrate our test and packaging equipment to respond to changing technological requirements. If we fail to develop advanced test and packaging services or to access those developed by others in a timely manner, we could lose existing customers or fail to acquire potential customers demanding these advanced services.

The application of push-down accounting or any other change in accounting standards could affect our results of operations.

     As of February 1, 2010, Temasek, through its wholly-owned subsidiary, Singapore Technologies Semiconductor Pte Ltd (“STSPL”), beneficially owned approximately 83.8% of our outstanding ordinary shares. Temasek, a private limited company incorporated in Singapore, is wholly-owned by the Minister for Finance (Incorporated) of Singapore, a body corporate constituted by the Minister for Finance (Incorporation) Act (Cap. 183). In the event that Temasek or its affiliates increase their ownership in our ordinary shares to 95% or above, resulting in our Company becoming substantially wholly-owned by Temasek, the SEC will require us to apply push-down accounting in accordance with SEC Staff Accounting Bulletin No. 54, “Application of “Push-down” Basis of Accounting in the Separate Financial Statements of Subsidiaries Acquired in Purchase Transactions,” as interpreted by Emerging Issues Task Force Topic No. D-97, Push-down Accounting.

     Push-down accounting requires the establishment of a new basis for assets and liabilities based on the purchase price of the parent. Accordingly, we may be required to reflect Temasek’s investment basis or purchase price with respect to a proportionate amount of our underlying assets acquired and liabilities assumed (including any identifiable intangible assets and goodwill on acquisition) based on the respective estimates of the fair value of our assets and liabilities as at the date of acquisition. Push-down accounting could also result in changes to our income statement. Our financial condition and results of operations may differ based on the application of

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push-down accounting, which could also affect our ability to maintain the covenants required by our debt instruments. A breach of any of the covenants contained in our debt instruments could result in an event of default. Such default could allow our debt holders to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies, and/or to declare all borrowings outstanding thereunder to be due and payable. If our debt is accelerated, our assets may not be sufficient to repay such debt in full. At maturity, the entire outstanding principal amount of the notes together with accrued and unpaid interest, will become due and payable.

     In addition, we may change our accounting standards from U.S. GAAP to International Financial Reporting Standards or Singapore Financial Reporting Standards upon termination of our obligation under our senior notes to continue filing with or submitting to the SEC the reports required under the terms of our senior notes on a voluntary basis or otherwise. We have not quantified the impact of any such change in accounting standards on the presentation of our accounts or the financial ratios or covenants governing the notes and our financial condition and results of operations.

Our profitability will be affected by average selling prices of packaging and test services that have experienced pricing pressures and have a tendency to decline.

     Decreases in the average selling prices of our packaging and test services can have a material adverse effect on our profitability. The average selling prices of packaging and test services have declined historically, with packaging services in particular experiencing severe pricing pressure. This pricing pressure for packaging and test services is likely to continue and may intensify, particularly if the downturn in the semiconductor industry is sustained. Our ability to maintain or increase our profitability will continue to be dependent, in large part, upon our ability to offset decreases in average selling prices by improving production efficiency, increasing unit volumes packaged and tested, or by shifting to higher margin packaging and test services. If we are unable to do so, our business, financial condition and results of operations could be materially and adversely affected.

We may be subject to intellectual property rights disputes which could materially and adversely affect our business.

     Our ability to compete successfully will depend, in part, on our ability to operate without infringing the proprietary rights of others. However, we may not be aware of the intellectual property rights of others or whether such rights conflict with our rights, or be familiar with the laws governing such rights in certain countries in which our products and services are or may be sold. As the number of patents, copyrights and other intellectual property rights in our industry increases, and as the coverage of these rights increases, we may face more frequent patent and other intellectual property infringement claims brought by third parties.

     In the event that any valid claim is made against us, we could be required to:

• stop using certain processes or other intellectual property;

• cease manufacturing, using, importing or selling infringing packages;

• pay substantial damages;

• develop non-infringing technologies; or

• attempt to acquire licenses to use the infringed technology.

     It is the nature of the semiconductor industry that, from time to time, we may receive communications alleging that we have infringed intellectual property rights of others. Although we may seek licenses from or enter into agreements with third parties covering the intellectual property that we are allegedly infringing, we cannot assure you that any such licenses could be obtained on acceptable terms, if at all. We may also have to commence lawsuits against companies who infringe our intellectual property rights. Such claims could result in substantial costs and diversion of our resources.

     Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

We may be subject to claims and litigations which could materially and adversely affect our business.

     We are subject to claims and litigations, which arise in the normal course of business.

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     For example, on April 24, 2009, Freescale Semiconductor, Inc. (“Freescale”), a customer of our Company, notified us that, on April 21, 2009, it filed a complaint against our Company in the United States District Court for the Western District of Texas, claiming damages of approximately $7 million plus an unspecified amount of consequential damages, attorneys’ fees and costs in connection with an alleged breach of contract and other claims arising out of an alleged manufacturing defect in parts packaged for Freescale by our Company. Freescale demanded mediation of the claims, as required by its underlying contract with our Company.

     On August 7, 2009, we filed an answer to Freescale’s complaint as well as a counterclaim for various breaches of contract, claiming damages in excess of $1.56 million, in the United States District Court for the Western District of Texas. The parties reached an amicable settlement of the aforementioned claim by Freescale and our Company’s counterclaim in the third quarter of 2009. The associated legal settlement costs have been fully reserved and reflected in our financial statements for 2009.

     In February 2006, our Company and its wholly-owned subsidiaries, STATS ChipPAC Inc. (“ChipPAC”) and STATS ChipPAC (BVI) Limited, were named as defendants in a patent infringement lawsuit filed in the United States Federal Court for the Northern District of California (the “California Litigation”). The plaintiff, Tessera Technologies, Inc. (“Tessera”), has asserted that semiconductor chip packaging, specifically devices having Ball Grid Array (“BGA”) and multi-chip BGA configurations used by the defendants infringe certain patents of Tessera. Tessera has further asserted that our Company is in breach of an existing license agreement entered into by Tessera with ChipPAC, which agreement has been assigned by ChipPAC to our Company. In May 2007, at Tessera’s request, the United States International Trade Commission (the “ITC”) instituted an investigation (the “First ITC Investigation”) of certain of our Company’s co-defendants in the California Litigation and other companies, including certain of our Company’s customers. In addition, in April 2007, Tessera instituted an action in the Federal District Court for the Eastern District of Texas (the “Texas Action”) against certain of our Company’s co-defendants in the California Litigation and other companies. In the First ITC Investigation, the ITC issued a limited exclusion order in May 2009 preventing the named companies from importing certain packaged semiconductor chips and products containing them into the United States. The respondents in the First ITC Investigation appealed to the U.S. Court of Appeals for the Federal Circuit and the appeal is pending. The Texas Action seeks damages and injunctive relief against the named defendants. Both the First ITC Investigation and the Texas Action allege infringement of two of the same patents asserted by Tessera in the California Litigation, and may involve some of the same products packaged by our Company that are included in the California Litigation. Further, in May 2008, the ITC instituted an investigation (the “Second ITC Investigation”) of our Company and other semiconductor package assembly service providers that are included in the California Litigation. In the Second ITC Investigation, Tessera sought an order to prevent our Company and other named companies (collectively, the “Respondents”) from providing packaging or assembly services for certain packaged semiconductor chips incorporating small format non-tape BGA semiconductor packages and products containing them, for importation into the United States. In addition, Tessera sought a general exclusion order excluding from importation all small format non-tape BGA semiconductor packages (and downstream products containing such packages), regardless of whether such packages are assembled by the Respondents. The Second ITC Investigation alleged infringement of three of the same patents asserted by Tessera in the California Litigation. We responded to the complaint in June 2008. In February 2009, the Second ITC Investigation was stayed pending the outcome of the First ITC Investigation. In March 2009, Tessera moved to terminate the Second ITC Investigation. In August 2009, the ITC issued a final determination terminating the Second ITC Investigation. The district court in the California Litigation has vacated the trial schedule and stayed all proceedings pending a final resolution of the First ITC Investigation. The U.S. Patent and Trademark Office (the “PTO”) has also instituted reexamination proceedings on all of the patents Tessera has asserted in the California Litigation and the Second ITC Investigation. See “Item 4. Information on the Company — B. Business Overview — Intellectual Property” and “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Contingencies.”

     We believe that we have a meritorious defense to these claims and intend to defend the lawsuit(s) vigorously. A court or ITC determination that our products or processes infringe the intellectual property rights of others could result in significant liability and/or require us to make material changes to our products and/or processes. Due to the inherent uncertainties of the lawsuit(s) and investigation(s), we cannot accurately predict the ultimate outcome and it could result in significant liability and/or injunction and could have a material adverse effect on the business, financial condition and the results of operations of our Company.

     Any claims and litigations that we may be subject to, such as the foregoing, could have a material adverse effect on our business, financial condition and results of operations.

     We also, from time to time, receive from customers, requests for indemnification against pending or threatened infringement claims brought against such customers, such as the Tessera cases described above. The resolution of any future allegation or request for indemnification could have a material adverse effect on our business, financial condition and results of operations.

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We may not be able to successfully implement our strategy if we do not control our operating expenses.

     The successful implementation of our strategy depends, to a substantial degree, on our ability to increase our revenue while at the same time, reducing or controlling our operating expenses. Cost reduction initiatives we have implemented and continue to implement include productivity improvements, material cost reduction, reduction in capital expenditures and reduction in labor cost through other measures.

     We cannot assure you that our efforts will produce the expected cost savings and other benefits. In addition, the cost reduction efforts may adversely affect the effectiveness of our financial and operational controls and may result in disruptions to our operations.

We have experienced substantial losses in the past and may do so in the future.

     Although in 2009, we achieved an operating income of $53.4 million and net income of $10.1 million, we incurred an operating loss of $28.2 million and net loss of $48.8 million in the first half of 2009 primarily as a result of the downturn in the semiconductor industry and our restructuring activities. If the downturn in the semiconductor industry continues, we may incur additional losses in the future.

Our substantial indebtedness could adversely affect our financial health.

     We have a substantial amount of indebtedness. As of December 27, 2009, we had total indebtedness of $458.0 million, consisting of $363.0 million of unsecured senior notes, $2.9 million of secured debt and $92.1 million of unsecured debt. Of this amount, $150.0 million principal amount of our unsecured senior notes are due in July 2010. In addition, we are permitted to incur additional debt under the terms of our existing debt. We may incur additional debt for general working capital. Any additional indebtedness that we may incur may be on terms more stringent than those governing our current indebtedness.

     Our substantial indebtedness could have a material adverse effect on our business, financial condition and results of operations by:

• increasing our vulnerability to general adverse economic and industry conditions by limiting our flexibility in planning for, or reacting to, changes in the business and the industry in which we operate;

• requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thus reducing the availability of cash flow to fund working capital, capital expenditures, research and development, and other general corporate purposes;

• placing us at a competitive disadvantage relative to our competitors that have less leverage; and

• limiting, along with the financial and other restrictive covenants in the indebtedness, our ability to borrow additional funds.

     In addition, holders of our various senior notes may, in certain circumstances, including a change in control of our Company, in each case as defined in the respective indenture relating to such senior notes, require us to redeem all or a portion of the holders’ senior notes. We may be required to refinance our debt in order to make such payments. If such an event were to occur, we cannot assure you that we will have sufficient funds or would be able to arrange financing on terms that are acceptable to us or at all or to obtain waivers of prohibitions from lenders under our other financing arrangements to make the required purchase or redemption. If we do not have sufficient funds or are unable to obtain adequate financing or waivers to repurchase or redeem such senior notes, we will be in default under the terms of those senior notes.

To service our indebtedness and other potential liquidity requirements, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and we may need to access the credit market to meet our liquidity requirements.

     Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures and research and development will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Furthermore, given that the uncertainty over global economic conditions remains, there can be no assurance that our business activity will be maintained at the expected level to generate the anticipated cash flows from operations or that our credit facilities would be available or sufficient. If the downturn in

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the semiconductor industry continues, we will experience a decrease in demand for our services, resulting in our cash flows from operations being lower than anticipated. This may in turn result in our need to obtain additional financing.

     Our ability to obtain external indebtedness could be impacted by our debt ratings. Any increase in our level of debt, change in status of debt from unsecured to secured debt, or deterioration in our operating results and our industry may cause a reduction in our current debt rating. Any downgrade in our current debt rating could impair our ability to obtain additional financing on acceptable terms. Furthermore, the credit markets have recently experienced adverse conditions. Continuing volatility in the capital markets may increase costs associated with issuing debt instruments due to increased spreads over relevant interest rate benchmarks or affect our ability to access those markets.

     We may need to refinance all or a portion of our indebtedness on or before maturity including $150.0 million principal amount of our senior notes coming due in July 2010. We cannot assure you that we will be able to refinance any of our indebtedness, including our senior notes, on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all.

We recorded an impairment charge of $453.0 million to our earnings in 2004 and may be required to record another significant charge to earnings in the future when we review our goodwill or other intangible assets for potential impairment.

     As of December 27, 2009, we had goodwill and other intangible assets of approximately $551.1 million and $40.0 million, respectively. Under U.S. GAAP, we are required to review our goodwill and intangible assets for impairment whenever circumstances indicate the carrying value may not be recoverable. In addition, goodwill and other intangible assets with indefinite lives are required to be tested for impairment at least annually. Various uncertainties, including deterioration in the global economic condition and downturn in the semiconductor industry, could impact expected cash flows to be generated by the goodwill or other intangible assets, and may result in impairment of these assets in the future. We performed an impairment review and recorded an impairment charge of $453.0 million to our earnings in 2004. Although our impairment review of goodwill in 2007, 2008 and 2009 did not indicate any impairment, we may be required in the future to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill or other intangible assets is determined. Notwithstanding that any such impairment would be a non-cash expense, such charges will likely have a significant adverse impact on our results of operations.

We expect to incur significant capital expenditures in the future and therefore may require additional financing in the future, which may not be available on terms favorable to us, if at all.

     Our capital expenditures are largely driven by the demand for our services. Our capital expenditures were $268.8 million in 2007, $239.0 million in 2008 and $159.2 million in 2009. In 2010, we expect our capital expenditures to be approximately $200.0 million, depending on business conditions. To grow our business, we will need to increase our assembly and test capacity, to replace existing equipment from time to time and to expand our facilities. This will require substantial capital expenditures for additional equipment. These expenditures will likely be made in advance of generating sales revenue. We cannot assure you that our net revenues will be maintained or will increase after these expenditures are incurred. Failure to generate revenue after these expenditures could have a material adverse effect on our business, financial condition and results of operations.

     We may need to obtain additional debt or equity financing to fund our capital expenditures. However, we cannot assure you that we will be able to obtain additional financing on terms that are acceptable to us or at all. An inability to pursue additional expansion opportunities will have a material adverse effect on our ability to achieve our desired level of revenue growth in future periods.

     Additional debt financing, if available, may:

• limit our Company or our subsidiaries’ ability to pay dividends or require us to seek consents for the payment of dividends;

• increase our vulnerability to general adverse economic and industry conditions;

• limit our ability to pursue our growth plan;

• require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund capital expenditures, working capital and other general corporate purposes; and

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• limit our flexibility in planning for, or reacting to, changes in our business and our industry.

     If we expend significant amounts of cash or incur additional debt, our liquidity may decline and we may be more vulnerable to a global economic downturn.

Our operating results have fluctuated, and may continue to fluctuate, from quarter to quarter, which may make it difficult to predict our future performance.

     Our operating results have fluctuated and may continue to fluctuate substantially from quarter to quarter due to a wide variety of factors, including:

• general economic conditions in the semiconductor industry and the markets addressed by end-users of semiconductors;

• a shift by IDMs between internal and outsourced test and packaging services;

• the seasonality of the semiconductor industry;

• the short-term nature of our customers’ commitments;

• the rescheduling or cancellation of large orders;

• the timing and volume of orders relative to our capacity;

• changes in capacity utilization;

• the erosion of the selling prices of packages;

• changes in our product mix;

• the rescheduling, cancellation and timing of expenditures in anticipation of future orders;

• disruptions caused by the installation of new equipment;

• the ability to obtain adequate equipment and materials on a timely and cost-effective basis;

• any exposure to currency and interest rate fluctuations that may not be adequately covered under our hedging policy;

• weakness in the supply of wafers and substrates;

• loss of key personnel or the shortage of available skilled workers;

• goodwill and equipment impairments;

• restructuring charges; and

• changes in effective tax rates.

     As a result of all of these factors, we believe that using historical results to predict our future performance may not be meaningful. In addition, unfavorable changes in any of the above factors may adversely affect our business, financial condition and results of operations.

If we are unable to maintain or increase our capacity utilization, our gross margin will be adversely affected.

     As a result of the capital intensive nature of our business, our operations are characterized by high fixed costs. Consequently, high capacity utilization allows us to maintain higher gross margins because it enables us to allocate fixed costs over a greater number of

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units tested and packaged. Insufficient utilization of installed capacity can have a material adverse effect on our gross margin. Although our capacity utilization maintained at the same level in 2007 as in 2006, our capacity utilization rates declined in 2008 primarily as a result of the decrease in demand for our packaging and test services resulting from the downturn in the semiconductor industry. The decline continued in the first half of 2009, although, in the second half of 2009, our capacity utilization improved. Market research data projects a growth in the semiconductor industry of approximately 10% to 13% in 2010. We expect the outsourced semiconductor assembly and test industry to grow at a faster rate than the semiconductor industry as a whole. We expect our capacity utilization to improve in 2010 given such outlook. However, despite the positive outlook, there can be no assurance that our capacity utilization will increase or be maintained or that it will not decline and adversely affect our gross margin.

     Our ability to maintain or enhance our gross margins will continue to be dependent, in large part, upon our ability to maintain or increase capacity utilization. Capacity utilization may be affected by a number of factors and circumstances, including:

• overall industry conditions;

• installation of new equipment in anticipation of future business;

• the level of customer orders;

• operating efficiencies;

• mechanical failure;

• disruption of operations due to expansion of operations, introduction of new packages or relocation of equipment;

• disruption in supply of raw materials;

• changes in product mix; and

• fire or other natural disasters.

     We cannot assure you that our capacity utilization will not be materially and adversely affected by further declines in the semiconductor industry, declines in industries that purchase semiconductors or other factors. Any inability on our part to maintain or increase our capacity utilization could have a material adverse effect on our business, financial condition and results of operations.

If we are unable to obtain packaging and testing equipment in a timely manner or on reasonably favorable terms and prices, we may be unable to meet customer demand and our revenue may decline.

     The semiconductor assembly and test business is capital intensive and requires investment in expensive capital equipment manufactured by a limited number of suppliers which are located principally in the United States, Singapore, Europe, South Korea and Japan. The market for capital equipment used in semiconductor assembly and testing is characterized, from time to time, by intense demand, limited supply and long delivery cycles. Our operations and expansion plans are highly dependent upon our ability to obtain a significant amount of such capital equipment from a limited number of suppliers. If we are unable to obtain certain equipment, such as testers and wire bonders, in a timely manner, we may be unable to fulfill our customers’ orders which would negatively impact our business, financial condition and results of operations.

     Generally, we have no binding supply agreements with any of our suppliers and we acquire our equipment on a purchase order basis which exposes us to substantial risks. For example, increased levels of demand for the type of capital equipment required in our business may cause an increase in the price of such equipment and may lengthen delivery cycles, which could have a material adverse effect on our business, financial condition and results of operations. In addition, adverse fluctuations in foreign currency exchange rates, particularly the Japanese Yen, could result in increased prices for certain equipment purchased by us, which could have a material adverse effect on our business, financial condition and results of operations.

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We have entered into a number of financing arrangements that impose limitations on our actions which may limit our ability to maintain and grow our business.

     The terms of our senior notes contain restrictions applicable to us that limit our ability to, among other things:

• incur additional debt and issue certain preferred stock;

• declare or pay dividends, repurchase stock and make other distributions;

• prepay subordinated debt, make investments and other restricted payments;

• create or incur liens or encumbrances;

• create restrictions on the ability of our subsidiaries to pay dividends or make other payments;

• enter into transactions with affiliates;

• sell assets, consolidate or merge with or into other companies or reorganize our Company;

• enter into sale and leaseback transactions; and

• designate any of our subsidiaries as unrestricted subsidiaries (as such term is defined in the indenture governing the respective notes).

     The restrictions contained in the indentures governing our senior notes could limit our ability to plan for or react to market conditions, meet capital needs or make acquisitions or otherwise restrict our activities or business plans. We may encounter difficulties obtaining the required consents from our existing debt holders to engage in the above or other activities in connection with our business, in particular, to obtain the necessary financing to maintain or grow our business, on a timely basis or at all. This could have a material adverse effect on our business, financial condition and results of operations.

     A breach of any of the covenants or restrictions contained in any of the indentures could result in an event of default. Such default could allow our debt holders to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies, and/or to declare all borrowings outstanding hereunder to be due and payable. If our debt is accelerated, our assets may not be sufficient to repay such debt in full.

Research and development investments may not yield profitable and commercially viable packages or test services and thus will not necessarily result in increases in revenues for us.

     We invest significant resources in our research and development. Research and development costs for new packages and test services continue to increase. We may incur substantially higher research and development costs as products have become more complicated and have a shorter lifespan. However, research and development may not yield commercially viable packages or test services. The process to prove out and qualify new packages and test services is conducted in various stages which may take one or more years to complete, and during each stage there is a substantial risk that we will have to abandon a potential package or test service which is no longer marketable and in which we have invested significant resources. In the event we are able to qualify new packages or test services, a significant amount of time will have elapsed between our investment in new packages or test services and the receipt of any related revenues. In addition, from time to time, our customers may request, and have requested, research and development services relating to the development of packages and/or services. These customers may not, and generally do not, reimburse us for our research and development expenses if the developed package or service does not achieve expected levels of demand or utilization.

We do not have any significant backlog because our customers do not place purchase orders far in advance, which makes us vulnerable to sudden changes in customer demand.

     Our customers generally do not place purchase orders far in advance, and our contracts with major customers do not generally require minimum purchases of our products or services. In addition, our customers’ purchase orders vary significantly from period to

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period because demand for their products is often volatile and unpredictable. As a result, we do not typically operate with any significant backlog. The lack of a significant backlog makes it difficult for us to forecast our net operating revenues in future periods and causes our operating results to fluctuate from period to period. Moreover, our expense levels are based in part on our expectations of future revenue and we may be unable to adjust costs in a timely manner to compensate for any revenue shortfalls. We expect that in the future our net operating revenues in any period will continue to be substantially dependent upon purchase orders received in the relevant period. We cannot assure you that any of our customers will continue to place orders with us in the future at the same levels as in prior periods. We also cannot assure you that our customers’ orders will be consistent with our expectations when we made or will make the necessary investments in raw materials, labor and equipment. Further, any adverse change in the global economic conditions could restrict our customers’ ability to accurately forecast demand which could adversely affect our business, financial condition and results of operations.

We generally do not have any long-term supply contracts with our raw materials suppliers and may not be able to obtain the raw materials required for our business at reasonable prices, which could have a material adverse effect on our business.

     We obtain the raw materials we need for our packaging services from outside suppliers. We purchase our materials, including substrates, gold and other commodity materials such as copper, as required on a purchase order basis and have not generally entered into long-term contracts with our suppliers. The price of gold and other commodities used in our business fluctuate from time to time. If we cannot obtain sufficient quantities of raw materials at reasonable prices or if we are not able to pass on higher materials costs to our customers, this could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to adequately assess and monitor credit risks of our customers which may result in longer collection cycles and bad debt expense.

     Our exposure to credit risks from our customers may increase if the global economic downturn affects the liquidity and solvency of our customers, and this would have a material adverse effect on our financial condition and results of operations if the credit risks of our customers are not adequately assessed and monitored.

We need a controlled environment for our operations and any prolonged inability to maintain a clean room environment may disrupt our operations and, materially and adversely affect our business.

     Our packaging and testing operations take place in areas where air purity, temperature and humidity are controlled. If we are unable to control our packaging or testing environment, our packaging or test equipment may become nonfunctional or the tested and packaged semiconductors may be defective. If we experience prolonged interruption in our operations due to problems in the clean room environment, this could have a material adverse effect on our business, financial condition and results of operations.

Loss of our key management and other personnel, or an inability to attract such management and other personnel, could impact our business.

     We depend on our key senior management to run our business. We do not maintain “key man” life insurance on any of our personnel. The loss of these persons could have a material adverse effect on our business, financial condition and results of operations, particularly if we are unable to find, relocate and integrate adequate replacements for any of these persons. Further, in order to develop or grow our business, we will require experienced technical, customer support, sales and management personnel and other skilled employees. We may be unable to attract or retain these persons. This could disrupt our operations or materially and adversely affect the success of our business.

The packaging and testing process is complex and our production yields and customer relationships may suffer from defects or malfunctions in our testing equipment or defective packages and the introduction of new packages.

     Semiconductor packaging and testing are complex processes that require significant technological and process expertise. Semiconductor testing involves sophisticated testing equipment and computer software. We develop computer software which is used to test our customers’ semiconductors. We also develop conversion software programs which enable us to test semiconductors on different types of testers. Similar to most software programs, these software programs are complex and may contain programming errors or “bugs.” In addition, the testing process is subject to operator error by our employees who operate our testing equipment and related software. Any significant defect in our testing or conversion software, malfunction in our testing equipment or operator error could reduce our production yields, damage our customer relationships and materially harm our business.

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     The packaging process is complex and involves a number of precise steps. Defective packages primarily result from:

• contaminants in the manufacturing environment;

• human error;

• equipment malfunction;

• defective raw materials; or

• defective plating services.

     These and other factors have, from time to time, contributed to lower production yields. They may do so in the future, particularly as we expand our capacity or change our processing steps. In addition, to be competitive, we must continue to expand our offering of packages. Our production yields on new packages typically are significantly lower than our production yields on our more established packages.

     Our failure to maintain high standards or acceptable production yields, if significant and prolonged, could result in loss of customers, increased costs of production, delays, substantial amounts of returned goods and claims by customers relating thereto. Any of these problems could have a material adverse effect on our business, financial condition and results of operations.

We could suffer adverse tax and other financial consequences if taxing authorities do not agree with our interpretation of applicable tax laws.

     We are subject to laws and regulations in various tax jurisdictions and as a result are subject to taxation and continual examination by a number of taxing authorities. Tax rates vary among the jurisdictions in which we operate and we have been granted preferential income tax and tax holidays in some of these jurisdictions. A change in the foreign tax laws or in the construction of the foreign tax laws governing these preferential income tax and tax holidays, or our failure to comply with the terms and conditions governing the preferential income tax and tax holidays, could result in us not recognizing the anticipated benefits we expect to derive from them, which would decrease our profitability in those jurisdictions.

     From time to time, the taxing authorities of the relevant jurisdictions may conduct examinations of our income tax returns and other regulatory filings. Tax authorities may disagree with our intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. For example, in 2002, the South Korean National Tax Service’s (“NTS”) issued tax assessments to ChipPAC relating to withholding tax not collected on the interest income between ChipPAC’s subsidiaries in South Korea and Hungary for the period from 1999 to 2006. Following the completion and settlement of the NTS’ examination through a Mutual Agreement Procedure (“MAP”), a revised tax assessment was issued to ChipPAC for 10.6 billion South Korean Won ($9.1 million), which we settled in September 2009. We regularly assess the likely outcomes of these examinations in order to determine the appropriateness of our tax provision. However, there can be no assurance that we will accurately predict the outcomes of these examinations, and the amounts ultimately paid upon resolution of examinations could be materially different from the amounts previously included in our income tax expense and therefore could have a material adverse impact on our results of operations and financial position.

We may be classified as a passive foreign investment company which could result in adverse U.S. federal income tax consequences to U.S. Holders.

     Based on the price of our ordinary shares and the composition of our income and assets, we believe that we were not a passive foreign investment company (“PFIC”), for U.S. federal income tax purposes for our taxable year ended December 27, 2009. However, our PFIC status is a factual determination made after the close of each taxable year and thus there can be no assurance that we will not become a PFIC in our current taxable year or any future taxable year as a result of changes in our assets, income or business operations or fluctuations in the value of our ordinary shares. A non-U.S. corporation will be considered a PFIC for any taxable year if either (1) at least 75% of its gross income is passive income or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income. The market value of our assets will be determined based on the market price of our ordinary shares, which is likely to fluctuate. If we were treated as a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional

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Information — E. Taxation — United States Federal Income Taxation”) held an ordinary share, certain adverse U.S. federal income tax consequences could apply to the U.S. Holder. For example, if we are a PFIC, U.S. Holders will become subject to increased tax liabilities under U.S. tax laws and regulations with respect to any gain recognized or the sale of our ordinary shares and certain distributions, and will become subject to burdensome reporting requirements. See “Item 10. Additional Information — E. Taxation — United States Federal Income Taxation — Passive Foreign Investment Company.”

Our intellectual property is important to our ability to succeed in our business but may be difficult to obtain and protect.

     Our ability to compete successfully and achieve future growth in net revenues will depend, in part, on our ability to develop and to protect our intellectual property and the intellectual property of our customers. We seek to protect proprietary information and know-how through patents, the use of confidentiality and non-disclosure agreements and limited access to and distribution of proprietary information. As of February 1, 2010, our Company and our various subsidiaries held a total of approximately 1,361 issued patents and pending patent applications. Of these, we have approximately 329 patents granted or allowed by the PTO and approximately 101 patents registered or allowed in Singapore, South Korea and other countries.

     We cannot assure you that any of our pending applications for patents will be granted, or, if granted, will not be challenged, invalidated or circumvented or will offer us any meaningful protection. Further, we cannot assure you that the Asian countries in which we market our products will protect our intellectual property rights in the same manner or to the same extent as the United States. Additionally, we cannot assure you that our competitors will not challenge our rights in such intellectual property, or develop, patent or gain access to similar know-how and technology, or reverse engineer our packaging services, or that any confidentiality and non-disclosure agreements upon which we rely to protect our trade secrets and other proprietary information will be adequate protection. The occurrence of any such events could have a material adverse effect on our business, financial condition and results of operations.

     We have licenses to use third party patents, patent applications and other technology rights, as well as trademark rights, in the operation of our business. To the extent these licenses are not perpetual and irrevocable, we believe that these licenses will be renewable under normal or reasonable commercial terms upon their expiration. However, we may be unable to utilize the technologies under these licenses if they are not extended or otherwise renewed or if any of these licenses are terminated by the licensor. Alternatively, if we are able to renew these licenses, we cannot assure you that they will be renewed on the same terms as currently exist. Any termination of, or failure to extend or renew, these licenses could cause us to incur substantial liabilities and to suspend the services and processes that utilize these technologies.

Liabilities and obligations under certain environmental laws and regulations could require us to spend additional funds and could adversely affect our business, financial condition and results of operations.

     We are subject to a variety of environmental laws and regulations in the countries in which we have operations, including laws and regulations relating to the use, storage, discharge and disposal of hazardous materials and the chemical by-products of, and waste water discharges from, our packaging and testing processes. Furthermore, our activities are also subject to regulatory requirements on the environmental impacts of products such as the European Union’s Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment. As a result of these laws and regulations, we expect that our customers will increasingly demand products that do not contain these restricted substances, such as lead as an alloy in soldering material. Such requirements may adversely affect our manufacturing costs by requiring us to acquire costly equipment or materials or to redesign some of our processes, thereby resulting in further cost increases from research and development and quality controls. In addition, failure to meet these demands could materially and adversely affect our product sales. We may also be subject to liability under such laws and regulations for the investigation or cleanup of contamination caused by, or other damages associated with, the release of hazardous materials in connection with current or historical operations at our facilities or off-site locations. While we believe that we are currently in material compliance with such laws and regulations, failure to comply with such laws and regulations in the future could subject us to liabilities that may have an adverse effect on our business, financial condition and results of operations. While we believe that we do not face material liabilities associated with contamination conditions and that in some cases we have contractual indemnification agreements with predecessors relating to such conditions, should these predecessors become unable or unwilling to address these conditions, or should other yet unknown conditions be identified in the future that are not subject to such indemnification agreements, we could face environmental liabilities that may have an adverse effect on our business, financial condition and results of operations.

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Significant fluctuations in exchange rates may affect our business, financial condition and results of operations.

     Our financial statements are prepared in U.S. dollars. Our net revenues are generally denominated in U.S. dollars and operating expenses are generally incurred in U.S. dollars, Singapore dollars, South Korean Won, Chinese Renminbi, Malaysian Ringgit, Thai Baht, New Taiwan dollars and Japanese Yen. Our capital expenditures are generally denominated in U.S. dollars, Singapore dollars, South Korean Won, Japanese Yen and other currencies. As a result, we are affected by significant fluctuations in foreign currency exchange rates among the U.S. dollar, the Singapore dollar, and other currencies, including the South Korean Won, the Chinese Renminbi, the Malaysian Ringgit, the Thai Baht, the New Taiwan dollar and the Japanese Yen.

     Based on our overall currency rate exposure, we have adopted a foreign currency hedging policy for committed or forecasted currency exposures. These programs reduce, but do not always entirely eliminate, the impact of currency exchange movements. The goal of the hedging policy is to effectively manage risk associated with fluctuations in the value of the foreign currency, thereby making financial results more stable and predictable. However, we cannot assure you that any hedging policy we implement will be effective and we may not offset a portion of the adverse financial impact resulting from currency variations. Gains and losses associated with hedging activities may have an adverse effect on our results of operations.

Our ability to make further investments in our subsidiaries may be dependent on regulatory approvals.

     Our subsidiaries may require future equity-related financing, and any capital contributions to certain of our subsidiaries including, but not limited to, STATS ChipPAC Taiwan Semiconductor Corporation and our China subsidiaries, may require the approval of the relevant authorities in the jurisdiction in which the subsidiary is incorporated. The approvals are required from the investment commissions or similar agency of the particular jurisdiction and relate to any initial or additional investment by foreign entities in local corporations. We may not be able to obtain any such approval in the future in a timely manner or at all. Any delay or inability to provide capital to our subsidiaries may adversely affect our business.

Temasek controls our Company and its interests may conflict with the interests of our other shareholders.

     As of February 1, 2010, Temasek, through its wholly-owned subsidiary, STSPL, beneficially owned approximately 83.8% of our outstanding ordinary shares. As a result, Temasek is able to exercise control over matters requiring the approval of our shareholders.

     Matters that typically require the approval of our shareholders include, among other things:

• the election of directors;

• the merger or consolidation of our Company with any other entity;

• any sale of all or substantially all of our assets; and

• the timing and payment of dividends.

     Specifically, Temasek and STSPL have disclosed in their Amendment No. 17 and No. 18 to the Schedule 13D filed with the SEC on October 16, 2007 and December 12, 2007, respectively, that they may seek to cause our Company to voluntarily delist our ordinary shares from the SGX-ST if it becomes eligible to do so. On December 29, 2009, Temasek and STSPL disclosed in an announcement filed with the SGX that they are still considering seeking to cause our Company to voluntarily delist our ordinary shares from the SGX-ST. In addition, Temasek and STSPL have disclosed in their Schedule 13D that they and their affiliates may from time to time hold discussions with our management or directors or other parties regarding any or all of the following, and STSPL and Temasek have specifically reserved the right to change their intention with respect to any or all of such matters:

• the acquisition by any person of additional securities of our Company, or the disposition of securities of our Company;

• an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving our Company or any of our subsidiaries;

• a sale or transfer of a material amount of assets of our Company or any of our subsidiaries;

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• any change in our present Board of Directors or management of our Company, including plans or proposals to change the number or term of directors or to fill any existing vacancies on our Board of Directors;

• any material change in the present capitalization or dividend policy of our Company;

• any other material change in our Company’s business or corporate structure;

• changes in our Company’s charter or bylaws or other actions which may impede the acquisition of control of our Company by any person; or

• any action similar to any of those enumerated above.

     The actions of Temasek and STSPL, particularly through the election of directors and subsequent selection of management by those directors, can affect our strategic decisions, our legal and capital structure and our day-to-day operations. This concentration of ownership may also delay, deter or prevent acts that would result in a change of control which may be against the interests of holders of our ordinary shares, or reduce the liquidity of our ordinary shares and adversely affect their trading prices.

We may have conflicts of interest with our affiliates which may not be resolved in our favor.

     We have certain contractual and other business relationships and may engage in material transactions with the Government of Singapore and companies within the Temasek group, and with our joint venture with China Resources Logic Limited (“CR Logic”). Although all new material related party transactions generally will require the approval of the audit committee of our Board of Directors and in certain circumstances may also require separate approval of a majority of our Board of Directors, circumstances may arise in which the interests of our affiliates may conflict with the interests of our other shareholders. In addition, Temasek and its affiliates make investments in various companies. They have invested in the past, and may invest in the future, in entities that compete with us. In the context of negotiating commercial arrangements with affiliates, conflicts of interest have arisen in the past and may arise, in this or other contexts, in the future. We cannot assure you that any such conflicts of interest will be resolved in our favor.

We may not be successful in our acquisitions and investments in other companies and businesses and may face difficulties in integrating our acquisitions.

     From time to time, we may make acquisitions of, or investments in, other companies or businesses that we believe could expand our business, augment our market coverage, enhance our technical capabilities or otherwise offer growth opportunities. In October 2007, we completed the acquisition of an assembly and test operation in Pathumthani, Thailand, with LSI Corporation (“LSI”).

     The success of any acquisitions and investments depends on a number of factors, including:

• our ability to identify suitable opportunities for investment or acquisition;

• our ability to finance any future acquisition or investment on terms acceptable to us or at all;

• whether we are able to reach an acquisition or investment agreement on terms that are satisfactory to us or at all;

• the extent to which we are able to exercise control over the acquired company;

• the economic, business or other strategic objectives and goals of the acquired company compared to those of our Company; and

• our ability to successfully integrate the acquired company or business with our business.

     If we are unsuccessful in our acquisitions and investments or face difficulties in integrating our acquisitions and investments, or if our acquisitions and investments were to subject us to contingent or unknown liabilities, our financial condition may be materially and adversely affected, and we may be unable to realize the anticipated results or synergies from these acquisitions or investments.

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If we encounter future labor problems, we may fail to deliver our products in a timely manner which could adversely affect our revenues and profitability.

     The employees at our Icheon, South Korea, facility are represented by the STATS ChipPAC Korea Labor Union and are covered by collective bargaining and wage agreements. The wage agreement is renewed every year, and the collective bargaining agreement, which covers basic union activities, working conditions and welfare programs, among other things, is renewed every other year. The wage agreement was renewed in April 2009 and is effective through March 31, 2010. The collective bargaining agreement was renewed in May 2009 and is effective through April 30, 2011. As of December 27, 2009, approximately 72% of our South Korean employees were represented by the STATS ChipPAC Korea Labor Union. We cannot assure you that issues with the labor union or other employees will be resolved favorably for us in the future, that we will not experience significant work stoppages in future years or that we will not record significant charges related to those work stoppages.

New laws and regulations, currency policy and political instability in countries in which we operate, particularly in South Korea, China, Malaysia, Taiwan and Thailand could make it more difficult for us to operate successfully.

     A significant portion of our unit shipments are sent out to and a significant portion of our packaging and test facilities are located in South Korea, China, Malaysia, Taiwan and Thailand. In addition, we believe that the end markets for certain of our ten largest customers are located in Asia. The following are some of the risks inherent in doing business internationally:

• regulatory limitations imposed by foreign governments;

• fluctuations in currency exchange rates;

• political, military and terrorist risks;

• disruptions or delays in shipments caused by customs brokers or government agencies;

• unexpected changes in regulatory requirements, tariffs, customs, duties and other trade barriers;

• difficulties in staffing and managing foreign operations; and

• potentially adverse tax consequences resulting from changes in tax laws.

     There can be no assurance that economic, political or legal developments in any of these countries would not have a material adverse effect on our business, financial condition and results of operations.

Conducting business in China involves uncertainties and there can be no assurances that the intended benefits from our new China facility will be realized.

     In October 2007, we expanded our facilities in China to include additional buildings next to our facility in Qing Pu, Shanghai. The expansion increased floor space by approximately 500,000 square feet. Many legal, operational and financial risks may prevent us from realizing our intended benefits in China in connection with our investment in the facility in China. These risks include:

• economic and political uncertainties in China;

• local infrastructure problems, such as electrical power interruptions;

• transportation difficulties that may be encountered in receiving supplies and/or in shipping finished products by land or by air;

• an unwillingness or hesitancy on the part of customers to qualify their products in the new facilities;

• an inability to attract and retain sufficient and qualified engineering and management talent and resources;

• measures which may be introduced to control inflation or deflation;

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• continuing appreciation in the value of the Chinese Renminbi currency; and

• modifications to fiscal, banking or monetary policies to reduce the rate of future growth in China.

Because a significant portion of STATS ChipPAC Taiwan Semiconductor Corporation’s business and operations, our 300mm wafer bumping facilities, the production facilities of many of our suppliers and customers and providers of complementary semiconductor manufacturing services, are located in Taiwan, a severe earthquake could severely disrupt their normal operations and adversely affect our earnings.

     Taiwan is susceptible to earthquakes. For example, on December 26, 2006, tremors from an earthquake near the southern tip of Taiwan caused casualties, property damage and also damaged several undersea cables, disrupting internet and telecommunications across various parts of Asia. There were no major disruptions to operations at STATS ChipPAC Taiwan Semiconductor Corporation and our 300mm wafer bumping facilities. However, the production facilities of many of our suppliers and customers and providers of complementary semiconductor manufacturing services, including foundries, are located in Taiwan. If our customers are affected, it could result in a decline in the demand for our testing and packaging services. If suppliers and providers of complementary semiconductor manufacturing services are affected, our production schedule could be interrupted or delayed. As a result, a major earthquake in Taiwan could severely disrupt the normal operation of business, in particular STATS ChipPAC Taiwan Semiconductor Corporation’s and our 300mm wafer bumping business, and may have a material adverse effect on our business, financial condition and results of operations.

With our operations conducted in a limited number of facilities, a fire, flood or other calamity at one of our facilities could adversely affect us.

     We conduct our packaging and testing operations at a limited number of facilities. Significant damage or other impediments to any of these facilities, whether as a result of fire, weather, disease, civil strife, industrial strikes, breakdowns of equipment, difficulties or delays in obtaining materials and equipment, natural disasters, terrorist incidents, industrial accidents or other causes could temporarily disrupt or even shut down our operations, which would have a material adverse effect on our business, financial condition and results of operations. For example, our operations in South Korea, Taiwan and China are vulnerable to regional typhoons that can bring with them destructive winds and torrential rains, which can in turn cause plant closures, power supply, telecommunications and transportation interruptions. In addition, some of the processes that we utilize in our operations place us at risk of fire and other damage. For example, highly flammable gases are used in the preparation of wafers holding semiconductor devices for flip-chip packaging. While we maintain insurance policies for various types of property, casualty and other risks, which we consider to be adequate, we do not carry insurance for all the above referred risks and with regard to the insurance we do maintain, we cannot assure you that it would be sufficient to cover all of our potential losses.

Outbreaks of epidemics and communicable diseases in China and other parts of Asia may disrupt our business operations, causing us to lose customers and revenue.

     China and certain other countries, largely in Asia, have experienced the spread of the Severe Acute Respiratory Syndrome (“SARS”) virus and avian influenza viruses. More recently, the H1N1 flu virus has been a health threat in many countries, including countries across Asia. There can be no assurance that the SARS virus, avian influenza viruses, H1N1 flu virus and/or different or even more virulent viruses will not make a re-appearance in the future. If such an outbreak were to occur in Singapore, South Korea, China, Malaysia, Taiwan or Thailand, and if the outbreak were to be prolonged, uncontrolled and/or associated with high mortality, our operations could be severely impacted, such as through facility closures and the imposition of other emergency measures, any of which would have a material adverse effect on our business, financial condition and results of operations. Furthermore, any outbreak in any of our premises or manufacturing facilities could result in our management and employees being quarantined and our operations being required to be suspended.

Risks Relating to Our Ordinary Shares

     We voluntarily delisted our ADSs from Nasdaq, effective December 31, 2007, and terminated our ADR program with effect from April 30, 2008. Since December 31, 2007 until April 30, 2008 upon the termination of our ADR program, our ADSs traded on the Pink over-the-counter (“OTC”) Markets under the symbol “SCIPF.PK.” The Pink OTC Markets is not a listing service or exchange, but is instead a dealer quotation service for subscribing members. On May 22, 2009, we filed a certification on Form 15F with the SEC to deregister and terminate our reporting obligations under the Exchange Act with respect to our ordinary shares and our senior notes. Under the SEC’s rules, our SEC reporting obligations under the Exchange Act were immediately suspended upon the filing of

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the Form 15F and the deregistration became effective 90 days after the filing on August 20, 2009. However, we remain obligated under our senior notes to continue filing with or submitting to the SEC the reports required under the terms of our senior notes on a voluntary basis.

The trading price of our ordinary shares has been and may continue to be volatile.

     The trading price of our ordinary shares has been and may continue to be subject to large fluctuations. Our ordinary share price may increase or decrease in response to a number of events and factors, including:

• quarterly variations in operating results;

• changes in financial estimates and recommendations by securities analysts;

• the operating and stock price performance of other companies in our industry;

• developments affecting us, our customers or our competitors;

• changes in government regulation;

• changes in general economic conditions;

• changes in accounting principles;

• the timing of the termination of the registration of our ordinary shares and reporting obligations under the Exchange Act; and

• other events or factors described in this annual report.

     The stock market has recently experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market prices of securities issued by many companies for reasons unrelated to their operating performance. These broad market fluctuations may adversely affect the price of our ordinary shares, regardless of our operating performance.

The SGX-ST may suspend and/or delist our ordinary shares on the SGX-ST. Furthermore, we may voluntarily delist our ordinary shares from the SGX-ST.

     The SGX-ST may suspend and/or delist the listing of our ordinary shares on the SGX-ST if STSPL, other substantial shareholders (i.e., shareholders who have an interest in 5% or more of our outstanding ordinary shares) and our directors and chief executive officer, together with their respective associates (as defined in the listing manual of the SGX-ST), own in the aggregate more than 90% of our issued ordinary shares. As of February 1, 2010, STSPL owned approximately 83.8% of our outstanding ordinary shares. In addition we received notice from Marathon Asset Management LLP (“Marathon”) in May 2007 that it had voting control over 102,305,000 ordinary shares which represented approximately 4.65% of our outstanding ordinary shares as of February 1, 2010, and non-voting control over an additional 37,549,000 ordinary shares which represented approximately 1.70% of our outstanding ordinary shares as of February 1, 2010. Further purchases of ordinary shares by STSPL, other substantial shareholders, our directors, or their respective associates may result in the suspension of the listing and/or delisting of our ordinary shares on the SGX-ST.

     Furthermore, Temasek and STSPL may seek to cause us to voluntarily delist from the SGX-ST, and have also discussed with us the possibility of our Company voluntarily delisting from the SGX-ST. On December 29, 2009, Temasek and STSPL disclosed in an announcement filed with the SGX that they are still considering seeking to cause our Company to voluntarily delist our ordinary shares from the SGX-ST if it becomes eligible to do so. However, as any delisting from the SGX-ST is subject to certain conditions being satisfied, such as obtaining shareholders’ approval as discussed below and making an offer to all holders of outstanding ordinary shares of a reasonable exit alternative (which would normally be in cash), there is no certainty as to whether STSPL and Temasek will proceed to seek a delisting from the SGX-ST. Furthermore, any voluntary delisting from the SGX-ST is subject to the decision of our Board of Directors.

     Under the listing manual of the SGX-ST, the SGX-ST may agree, upon our application, to delist our Company if, subject to compliance with other requirements under the listing manual of the SGX-ST, the proposal to delist is approved at a general meeting by

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a majority of at least 75% of the ordinary shares held by the shareholders present and voting on a poll, and the proposal is not voted against by 10% or more of the ordinary shares held by the shareholders present and voting on a poll. On a poll, each shareholder has one vote for each share that the shareholder holds. Under the listing manual of the SGX-ST, our directors and our controlling shareholder (namely, STSPL) may vote on the proposal to delist.

     Delisting from the SGX-ST would mean that shareholders who continue to hold our ordinary shares after such delisting would hold shares in an unlisted company, and it is likely to be difficult for such shareholders to sell their ordinary shares in the absence of a public market for the ordinary shares. Furthermore, after delisting, we would no longer be obliged to comply with the listing manual of the SGX-ST, in particular the corporate disclosure requirements applicable to Singapore listed companies which would substantially reduce the information required to be furnished by us to our shareholders and to the SGX-ST.

Our public shareholders may have more difficulty protecting their interests than they would as shareholders of a company incorporated in the United States.

     Our corporate affairs are governed by our Memorandum and Articles of Association and by the laws governing companies incorporated in Singapore. The rights of our shareholders and the responsibilities of our management and the members of our Board of Directors under Singapore law may be different from those applicable to a company incorporated in the United States. For example, controlling shareholders of U.S. companies have fiduciary duties to minority shareholders while controlling shareholders in Singapore companies are not subject to such duties. Therefore, our public shareholders may have more difficulty in protecting their interests in connection with actions taken by our management, members of our Board of Directors or our controlling shareholder than they would as shareholders of a company incorporated in the United States.

It may be difficult for you to enforce any judgment obtained in the United States against us or our affiliates.

     Our Company is a company incorporated under the laws of Singapore as a company limited by shares. Most of our directors and a majority of our senior management reside outside the United States. In addition, a majority of our assets and the assets of those persons are located outside the United States. As a result, it may be difficult to enforce in the United States any judgment obtained in the United States against us or any of these persons, including judgments based upon the civil liability provisions of the United States securities laws. In addition, in original actions brought in courts in jurisdictions located outside the United States, it may be difficult for shareholders to enforce liabilities based upon United States federal securities laws. We have been advised that judgments of U.S. courts based on the civil liability provisions of the federal securities laws of the United States may not be enforceable in Singapore courts. We have also been advised that there is doubt as to whether Singapore courts will enter judgments in original actions brought in Singapore courts based solely upon the civil liability provisions of the federal securities laws of the United States.

The Singapore securities market is relatively small and more volatile than markets in the United States and may cause the market price of our ordinary shares to fluctuate.

     The SGX-ST is relatively small and more volatile than stock exchanges in the United States and certain other European countries. As of January 31, 2010, there were 774 companies listed on the Main Board of the SGX-ST and the aggregate market capitalization of listed equity securities of these companies was approximately S$650 billion. The relatively small market capitalization of, and trading volume on, the SGX-ST may cause the market price of securities of Singapore companies, including our ordinary shares, to fluctuate.

Our concentrated ownership reduces the trading liquidity of our ordinary shares and there can be no assurance that a more liquid trading market will ever develop or be sustained.

     As of February 1, 2010, STSPL owned approximately 83.8% of our outstanding ordinary shares. In addition we received notice from Marathon in May 2007 that it had voting control over 102,305,000 ordinary shares, which represented approximately 4.65% of our outstanding ordinary shares as of February 1, 2010, and non-voting control over an additional 37,549,000 ordinary shares, which represented approximately 1.70% of our outstanding ordinary shares as of February 1, 2010. Our concentrated ownership reduces the trading liquidity for the Company’s ordinary shares, which could lead to a lower and/or more volatile trading price for the ordinary shares. The price at which the ordinary shares may be sold will be unpredictable if there are very few trades in the ordinary shares because a relatively small block of shares traded can lead to a dramatic fluctuation in the share price. We cannot assure you that a more liquid trading market will develop or be sustained.

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Future sales, perceived sales, or issuances of our ordinary shares by our Company or existing shareholders could cause the price of our ordinary shares to decline.

     Sales or issuances of our ordinary shares in the public market, or the perception that these sales could occur, could cause the market price of ordinary shares to decline. These sales, or the perception that these sales could occur, also might make it more difficult for us to sell securities in the future at a time or at a price that we deem appropriate. All of our outstanding shares are freely transferable without restriction in Singapore, while our shares may only be sold in the United States if they are registered or if they qualified for an exemption from registration, including pursuant to Rule 144 under the Securities Act of 1933, as amended (“Securities Act”).

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of our Company

     STATS ChipPAC Ltd. was incorporated under the laws of Singapore as a company limited by shares on October 31, 1994 and began operations in January 1995

     In February 2000, we completed our initial public offering. Our ordinary shares are listed on SGX-ST (SGX-ST: STATSChP). Our ADSs were traded on Nasdaq from January 28, 2000 to December 28, 2007. We voluntarily delisted our ADSs from Nasdaq with effect from December 31, 2007 and terminated our ADR program effective April 30, 2008. On May 22, 2009, we filed a certification on Form 15F with the SEC to deregister and terminate our reporting obligations under the Exchange Act with respect to our ordinary shares and our senior notes. Under the SEC’s rules, our SEC reporting obligations under the Exchange Act were immediately suspended upon the filing of the Form 15F and the deregistration became effective 90 days after the filing on August 20, 2009. However, we remain obligated under our senior notes to continue filing with or submitting to the SEC the reports required under the terms of our senior notes on a voluntary basis.

     Our registered office and principal executive offices are located at 10 Ang Mo Kio Street 65, #05-17/20 Techpoint, Singapore 569059, Republic of Singapore, and our telephone and facsimile numbers at that address are (65) 6824-7777 and (65) 6720-7829, respectively. Our website address is www.statschippac.com. Information contained on our website does not constitute a part of this annual report. Our agent for service in the United States is the current Company Secretary of STATS ChipPAC, Inc., located at 47400 Kato Road, Fremont, CA 94538, United States of America; Telephone: 1 (510) 979-8000; Facsimile: 1 (510) 979-8001. We are headquartered in Singapore and our global manufacturing operations are carried out mainly in South Korea, Singapore, China, Thailand, Malaysia, Taiwan and the United States. We have sales offices in the United States, South Korea, Japan, China, Singapore, Malaysia, Taiwan, the United Kingdom and the Netherlands.

     On August 5, 2004, we completed our merger with ChipPAC, which resulted in ChipPAC becoming our wholly-owned subsidiary. In connection with the merger, we changed our name from ST Assembly Test Services Ltd to STATS ChipPAC Ltd. and our subsidiaries changed their names from ChipPAC Limited, ChipPAC Korea Ltd., ChipPAC (Shanghai) Company Limited and ChipPAC Malaysia Sdn. Bhd. to STATS ChipPAC (BVI) Limited, STATS ChipPAC Korea Ltd., STATS ChipPAC Shanghai Co., Ltd. and STATS ChipPAC Malaysia Sdn. Bhd., respectively. In January 2005, ST Assembly Test Service, Inc. was merged into ChipPAC and the entity surviving the merger was renamed STATS ChipPAC, Inc. In October 2007, our 52%-owned subsidiary, Winstek Semiconductor Corporation changed its name to STATS ChipPAC Taiwan Semiconductor Corporation.

     In June 2006, we entered into a strategic joint venture with CR Logic to sell packaging and test equipment related to specific low lead count packages to CR Logic’s indirect wholly-owned subsidiary, Wuxi CR Micro-Assemb Tech. Ltd. (“ANST”), in connection with which we acquired a 25% shareholding in Micro Assembly Technologies Limited (“MAT”), with CR Logic owning a 75% interest. ANST, an assembly and test company based in Wuxi, China, is a wholly-owned subsidiary of MAT.

     In March 2007, STSPL, a wholly-owned subsidiary of Temasek, launched a voluntary conditional cash offer for our ordinary shares at S$1.75 per share and S$17.50 per ADS. The tender offer also included an offer by STSPL for our zero coupon convertible notes due 2008 (“our zero coupon convertible notes”) at S$997.50 per US$1,000 principal amount of the notes and our 2.5% convertible subordinated notes due 2008 (“our 2.5% convertible notes”) at S$1,872.50 per US$1,000 principal amount of the notes. The offer price for each series of the convertible notes was the “see-through” price, which is the price holders of the convertible notes would receive if they converted their convertible notes into ordinary shares or ADSs at the conversion prices specified in the terms of the convertible notes and then tendered their ordinary shares or ADSs in the tender offer. However, if STSPL were to acquire such

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number of ordinary shares (including ordinary shares represented by ADSs) as to result in STSPL holding 90% or more of the outstanding ordinary shares, whether pursuant to the tender offer or otherwise, the offer price would have been raised to the higher offer price of S$1.88 per ordinary share and S$18.80 per ADS. The “see-through” higher offer price were S$1,071.60 per US$1,000 principal amount of our zero coupon convertible notes and S$2,011.60 per US$1,000 principal amount of our 2.5% convertible notes. Concurrently with the tender offer, STSPL made an options proposal to all holders of options granted under our share option plans. The option price was calculated on a “see-through” basis, which means that the option price for an option was the amount (if positive) of the offer price or (if applicable) the higher offer price less the exercise price of that option. If the exercise price of an option is equal to or more than the offer price or (if applicable) the higher offer price, the option price for each option was the nominal amount of S$0.001. In May 2007, the tender offer closed with STSPL and its concert parties holding 83.1% of our outstanding ordinary shares (including ADSs, but excluding the ordinary shares issuable upon conversion of the US$134.5 million aggregate principal amount of our 2.5% convertible notes acquired by STSPL) and $134.5 million aggregate principal amount of our 2.5% convertible notes. In addition, options representing 85,348,090 ordinary shares were surrendered and cancelled. STSPL paid the offer price for the securities acquired in the tender offer as the 90% threshold for the higher offer price to be applicable was not reached. The balance $15.5 million outstanding principal amount of our 2.5% convertible notes were converted into ADSs in May 2007. On May 22, 2008, STSPL converted into 145.1 million ordinary shares its entire $134.5 million of our 2.5% convertible notes that it acquired in connection with its tender offer in 2007.

     In May 2007, we signed an agreement to sell the packaging and test equipment related to discrete power packages, which were maintained and operated by our facility in Malaysia, to Mingxin. In November 2008, we completed the transfer of all of the equipment to Mingxin. Therefore, we have ceased all operations relating to discrete power packaging.

     In October 2007, we consummated the acquisition of LSI’s assembly and test operation in Thailand for an aggregate purchase price of approximately $100.0 million, payable over 4 years commencing October 2, 2008.

     In January 2008, we announced our intention to effect a proposed capital reduction to return surplus share capital in an amount of up to $813.0 million to our shareholders. At an extraordinary general meeting held on March 17, 2008, our shareholders approved the proposed capital reduction.

     Among other conditions, the proposed capital reduction was subject to and conditional upon our Company being able to obtain adequate debt financing to fund the cash distribution pursuant to the capital reduction and the repayment of certain of our outstanding debt on terms and conditions acceptable to us. The amount of the cash distribution would accordingly have been determined based on the proceeds of such debt financing made available to us. In furtherance of the proposed capital reduction, we commenced a cash tender offer and consent solicitation in respect of our senior notes in June 2008 but terminated it in August 2008 because the financing condition under the tender offer and consent solicitation was not satisfied.

     In February 2009, we announced that we would not proceed with the proposed capital reduction as previously approved at the March 2008 shareholders’ meeting as given the economic environment at that time, we were not able to obtain debt financing to fund the proposed cash distribution and the repayment of certain outstanding debt on terms and conditions acceptable to us.

     Our capital expenditures in 2007, 2008 and 2009 amounted to $268.8 million, $239.0 million and $159.2 million, respectively. Our capital expenditures are largely driven by the demand for our services, primarily to increase our packaging and testing capacity, to replace packaging and testing equipment from time to time, and to expand our facilities. In 2010, we expect our capital expenditures to be approximately $200.0 million, depending on business conditions.

     For a more detailed discussion of our capital expenditures and financing for such capital expenditures, see “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.”

B. Business Overview

     We are a leading service provider of semiconductor packaging design, bump, probe, assembly, test and distribution solutions. We have the scale to provide a comprehensive range of semiconductor packaging and test solutions to a diversified global customer base servicing the computing, communications and consumer markets. Our services include:

• Packaging services: providing leaded, laminate, flip-chip, memory card and wafer level chip-scale packages (“CSPs”) to customers with a broad range of packaging solutions and full backend turnkey services for a wide variety of electronics

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	applications. We also provide redistribution layers (“RDL”), integrated passive devices (“IPD”) and wafer bumping services for flip-chip and wafer level CSPs. As part of customer support on packaging services, we also offer package design; electrical, mechanical and thermal simulation; measurement and design of lead-frames and laminate substrates;
•	Test services: including wafer probe and final testing on a diverse selection of test platforms covering the major test platforms in the industry. We have expertise in testing a broad variety of semiconductors, especially mixed-signal, radio frequency (“RF”), analog and high-performance digital devices. We also offer test-related services such as burn-in process support, reliability testing, thermal and electrical characterization, dry pack, and tape and reel; and
•	Pre-production and post-production services: such as package development, test software and related hardware development, warehousing and drop shipment services.

     We have a leadership position in providing advanced package technology, such as flip-chip, wafer level, stacked die (“SD”) and System-in-Package (“SiP”). We are also a leader in testing mixed-signal semiconductors or semiconductors combining the use of analog and digital circuits in a chip. Mixed-signal semiconductors are used extensively in fast-growing communications and consumer applications. We have strong expertise in testing a wide range of high-performance digital devices.

     We have been successful in attracting new customers with our packaging and test capabilities and then expanding our relationship with such customers to provide full turnkey solutions tailored to their individual needs.

     We are headquartered in Singapore and our manufacturing facilities are strategically located in South Korea, Singapore, China, Malaysia, Thailand and Taiwan (which includes our 52%-owned subsidiary, STATS ChipPAC Taiwan Semiconductor Corporation). We also have a test pre-production facility in the United States. We market our services through our direct sales force in the United States, South Korea, Japan, China, Singapore, Malaysia, Taiwan, the United Kingdom and the Netherlands. With an established presence in the countries where strategic semiconductor markets are located, we are in close proximity to the major hubs of wafer fabrication which allows us to provide customers with fully-integrated, multi-site, end-to-end packaging and test services.

Our Industry

     Semiconductors are critical components used in an increasingly wide variety of applications such as computer systems, communications equipment and systems, automobiles, consumer products and industrial automation and control systems. As the performance of electronic systems has improved and their size and cost have decreased, the use of semiconductors in these applications has grown significantly.

     The semiconductor industry is highly cyclical mainly due to the cyclicality of demand in the markets of the products that use semiconductors. This cyclicality is significantly exacerbated by the capital intensive nature of the semiconductor industry and the time required to install new capacity, which results in periods of high capacity utilization when demand is robust followed by periods of underutilization and accelerated price erosion when new capacities are commissioned and demand growth slows.

     The demand for quick delivery to market of increasingly smaller semiconductors with greater functionality, which may be used in a wide array of electronic applications, has led to increased requirements for technical expertise, higher research and development spending and higher capital spending in the semiconductor production process. In addition to fabless companies, IDMs outsource packaging and test requirements as a means of obtaining cost-effective access to backend state-of-the-art technology and a faster time to market.

     Historically, IDMs conducted most of the semiconductor manufacturing process in their own facilities, outsourcing only the lower-technology aspects of the process and keeping advanced or proprietary technology in-house.

     Fabless semiconductor companies, which concentrated their efforts and resources on the design, marketing and sale of semiconductors, emerged in the mid-1980s. Fabless companies outsource virtually every step of the production process — fabrication, packaging and testing — to independent companies, allowing them to utilize the latest production, packaging and test technologies without committing significant amounts of capital and other resources to manufacturing.

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     Outsourced semiconductor manufacturing services have grown faster than the semiconductor market as a whole over the past four years. We believe that the reduced investments in packaging and test capacity by semiconductor manufacturers will better position outsource providers to capture a greater percentage of future volume levels.

     The semiconductor industry declined between 3% and 5% in 2008 as compared to 2007 due to the deterioration in the global economic condition and downturn in the semiconductor industry triggered by an unprecedented financial crisis. The semiconductor industry declined by approximately 11% in 2009, as the decline continued in the first half of 2009, and recovered to some extent in the second half of 2009. Market research data projects a growth in the semiconductor industry of approximately 10% to 13% in 2010. We anticipate the outsourced semiconductor assembly and test industry to grow at a faster rate than the semiconductor industry as a whole.

     In 2007, our net revenues increased by 2.1% over 2006 to $1,651.6 million. In 2008, our net revenues increased by 0.4% over 2007 to $1,658.2 million. In 2009, our net revenues decreased by 20.0% over 2008 to $1,325.7 million. We continue to expect that the cyclicality of the semiconductor industry will impact our results of operations.

Semiconductor Manufacturing Process

     The production of a semiconductor is a complex process that requires sophisticated engineering and manufacturing expertise. The production process can be broadly divided into three primary stages:

• wafer fabrication, including wafer probe, wafer bumping and input/output (“I/O”) trace redistribution;

• assembly of bare semiconductors, or die, into finished semiconductors (referred to as “assembly” or “packaging”); and

• final testing of assembled semiconductors.

     Wafer Fabrication. The wafer fabrication process begins with the generation of a mask defining the circuit patterns for the transistors and interconnects layers that will be formed on the raw silicon wafer. The transistors and other circuit elements are formed by repeating a series of process steps where photosensitive material is deposited onto the wafer. The material is then exposed to light through the mask in a photolithography process and the unwanted material is removed through an etching process, leaving only the desired circuit pattern on the wafer.

     Wafer Probe. Wafer probe is a process whereby each individual die on the wafer is electrically tested in order to identify the operable semiconductors for assembly.

     Wafer Bumping. Wafer bumping is a process by which contact points or I/O pads on a wafer are heightened above the wafer surface by adding conductor material like solder bump. These contact bumps are bonded or fused to make all required electrical connections to tape or interconnection substrate in a single process step. Bumps may be created on the die edges or distributed over the surface of the die in an area array format. This process is usually used in flip-chip die attached for flip-chip packages.

     I/O Trace Redistribution. I/O trace redistribution is a process where contact points of high-density, fine-pitch peripheral I/O bonding pads on a semiconductor chip are fanned-out using new traces created on multiple layers of masks to achieve evenly distributed large pitch bonding pads for the ease of solder bump or ball placement in the subsequent flip-chip interconnect process.

     Assembly. The assembly process packages the semiconductor chip to protect it, facilitate its integration into electronic systems and enable the dissipation of heat. In the assembly process, the wafer is diced into individual dies that are then attached to a substrate with an epoxy adhesive. Typically leads on the substrate are then connected by extremely fine gold wires to the I/O terminals on the die through the use of automated equipment known as “wire bonders.” Finally, each die is encapsulated in a molding compound, thus forming the package.

     Final Testing. Final testing is conducted to ensure that the packaged semiconductor meets performance specifications. Final testing involves using complex processes that require the use of sophisticated testing equipment and customized software programs to electrically test a number of attributes of assembled semiconductors, including functionality, speed, predicted endurance, power consumption and electrical characteristics.

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Our Strengths and Strategy

     Our goal is to strengthen our position as a leading global provider of a full range of semiconductor packaging and test services. The key elements of our strengths and strategy include the following:

     Leverage our broad portfolio of packaging and test services to provide full turnkey solutions. We offer one of the broadest portfolios of comprehensive end-to-end packaging and test services in the semiconductor industry. Increasingly, our customers are looking for supply chain semiconductor manufacturing solutions from value-added design to packaging, test and delivery to their designated locations. We intend to leverage our strong packaging and test capabilities to provide a full turnkey solution consisting of integrated packaging, testing and direct shipment to end customers. We believe that the scale and scope of our technical capabilities and global reach will enable us to provide our customers with seamless cost-effective solutions that will simplify their supply chain management.

     Leverage our established presence in the major geographic hubs of wafer fabrication. We have manufacturing facilities located in South Korea, Singapore, China, Malaysia, Thailand and Taiwan, and a test pre-production facility in the United States. We intend to leverage our strategic proximity to the major geographic hubs of wafer fabrication to provide customers with fully-integrated, multi-site, end-to-end packaging and test services.

     Capitalize on our research and development capabilities to drive accelerated growth. We have 323 employees in our research and development department, which focuses on developing advanced technologies to meet our customers’ needs. We believe this will enable us to capture potential opportunities and accelerate our growth.

     Continue to cultivate our strong customer relationships. We have a broad and diversified customer base that includes most of the world’s leading semiconductor companies across the fast-growing communications, computing and consumer markets. No single customer accounted for more than 15% of our net revenues in 2009. We seek to strengthen these customer relationships and build new relationships by providing our customers with an integrated supply chain solution.

     Continue to focus on high-quality customer service. Our customers demand increasingly high levels of service. Our close interactions with our customers enable us to better anticipate and meet their requirements on a timely basis. We focus on developing and delivering to our customers semiconductor devices that are designed, packaged, tested and delivered on time and as specified to any of their global locations. Our flexible manufacturing model allows us to better address periodic, product-specific capacity constraints that negatively affect smaller players. We have implemented information technology platforms to enable the seamless integration of our customers’ systems within ours, to enable them to obtain real-time information on their works-in-progress and thereby facilitate their production planning processes. We believe that offering high-quality customer service is critical to attracting and retaining leading semiconductor companies as our customers. We intend to continue fostering a service-oriented and customer-focused environment.

Our Services

     We offer semiconductor packaging and test services to the semiconductor industry for applications in communications, computing, consumer and industrial markets. We offer full backend turnkey services from wafer probe to final test and drop ship. The services we offer are customized to the needs of our individual customers. In 2009, 73.0% of our net revenues were derived from packaging services and 27.0% of our net revenues were derived from test and other services.

     The following table sets forth the percentage of net revenues by packaging product group and testing and other services for the periods indicated.

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Packaging — laminate		56.3	%		56.5	%		57.9	%
Packaging — leaded		18.4			18.0			15.1
Test and other services		25.3			25.5			27.0
Total		100.0	%		100.0	%		100.0	%

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Packaging Services

     We offer a broad range of advanced laminate and leaded packages designed to provide customers with a full range of packaging solutions and full backend turnkey services for a wide variety of electronics applications. Packaging serves to protect the semiconductor die and facilitate electrical connection and heat dissipation. As part of customer support on packaging services, we also offer complete package design, electrical and thermal simulation, measurement and design of lead-frames, substrates and wafer level integrations. Our packaging revenue was $967.8 million in 2009, compared to $1,236.0 million in 2008. Our two key types of packaging services, laminate and leaded, contributed approximately 57.9% and 15.1%, respectively, of our net revenues in 2009.

     Laminate Packaging. Laminate substrate-based packaging represents one of the fastest growing areas in the semiconductor packaging industry and is used primarily in computing platforms, networking, hand-held consumer products, wireless communications devices, personal digital assistants, video cameras, home electronic devices such as Digital Video Discs (“DVDs”) and game consoles.

     Benefits of laminate packaging over leaded packaging include:

• smaller size;

• greater pin count, or number of connections to the printed circuit board;

• greater reliability;

• higher power dissipation;

• better electrical signal integrity; and

• easier attachment to a printed circuit board.

     BGA technology was first introduced as a solution to problems associated with the increasingly high lead counts required for advanced semiconductors used in applications such as portable computers and wireless telecommunications. As the number of leads surrounding the integrated circuits (“ICs”) increased, high lead count packages experienced significant electrical shorting problems. The BGA technology solved this problem by effectively creating leads on the bottom surface of the package in the form of small bumps or solder balls. In a typical BGA, the semiconductor die is placed on top of a plastic or tape laminate substrate rather than a lead-frame. The die is connected to the circuitry in the substrate by a series of fine gold wires that are bonded to the top of the substrate near its edges. On the bottom of the substrate is a grid of solder balls that connect the packaged device to a printed circuit board. These balls can be evenly distributed across the entire bottom surface of the package, allowing greater distance between the individual balls. For the highest lead count devices, the BGA format can be manufactured less expensively and requires less delicate handling.

     Our BGA are typically used in semiconductors that require enhanced performance, including digital signal processors (“DSPs”), microprocessors and microcontrollers, application-specific integrated circuits (“ASICs”), field programmable gate arrays (“FPGAs”), memory and PC chipsets. Our BGA typically have between 16 and 900 balls.

     Several of these packages have been developed as CSPs. The emphasis of these packages is on low profile, small footprint and lightweight characteristics. These are ideal for medium pin-count applications which require dense arrays in very small package sizes such as hand-held wireless equipment, mobile base stations and digital photography.

     3D Packaging. Three-dimensional (“3D”) packaging provides a high level of functional integration in well established package families, including BGAs and leadframe packages, by stacking dies, packages or a mix of both, and using a mix of assembly technologies including wire bonding, flip chip, surface mounted passive components and IPDs. The types of 3D packages are often characterized by how they are stacked, either as chips, packages or passives. SD packages consist of bare die stacked and interconnected using wire bond and flip-chip connections in one standard package. 3D solutions include die level stacking of up to nine dies and package level stacking such as Package-on-Package (“PoP”), Package-in-Package (“PiP”) and SiP technology that integrates one or more ICs or passives.

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     Flip-chip. Flip-chip is an interconnect technology that provides a cost effective solution for applications requiring a smaller form factor, higher I/O and enhanced thermal and electrical performance. Flip-chip technology provides distinct advantages over conventional microelectronic packaging in areas such as size, performance, flexibility, and reliability. Flip-chip packaging, in which the silicon die is directly attached to the substrate using gold or solder bumps instead of wire bonds, provides the most dense interconnect with the highest electrical and thermal performance. We have a strong flip-chip portfolio encompassing single die, multi-die (“MD”), multi-package and thermally enhanced solutions which provide significant size and performance advantages over traditional packaging approaches. Flip-chip technology is used in a wide array of applications ranging from consumer products to highly sophisticated ASICs, PC chipsets, graphics and memory packages.

     We supply our customers with a broad range of advanced packaging solutions including:

• Standard BGA. Standard BGA packaging has a grid array of balls on the underside of the IC, and is used in high-performance applications, like PC chipsets, graphic controllers and DSPs. A BGA generally has greater than 100 balls.

• Chip-scale. Chip-scale packaging includes all packages where the package is less than 1.2 times the size of the silicon die. Chip-scale BGA is a substrate-based package that is designed for memory devices and other medium pin count semiconductors and requires dense ball arrays in very small package sizes, like wireless telephones and mobile hand-held devices, video cameras, digital cameras and pagers.

• SiP. SiP is a family of packages that contain several semiconductor dies along with passive components such as resistors, capacitors and inductors in one package. Dies can either be stacked on top of each other or side by side. This technology allows greater functionality in the same package footprint and thickness without significant cost increase. These packages are used in wireless handsets, consumer products and mobile computing applications.

• Wafer Level Processing (“WLP”). WLP services include full service wafer bumping with options for wafer repassivation, redistribution and IPD layers with polyimide dielectric with the solder alloy selection flexibility of a printed paste solder bump technology. This internal wafer bumping capability enables full turnkey Wafer Level Chip Scale Packages (“WLCSP”) and advanced flip-chip assembly and test. For larger pitch applications, either printed paste bumping or mechanical ball drop are available. Additionally, a complete, flexible backend assembly capability allows for high volume wafer sorting, automatic optical inspection and backend processing into bare die in tape and reel or waffle pack. We offer wafer level processing technologies and package options including Embedded Wafer-Level Ball Grid Array (“eWLB”), WLCSP, Chip-scale Module Packaging (“CSMP”) and IPD.

• WLCSP. WLCSP is a package very close to the size of the silicon die. WLCSP packaging can combine the strengths of various packaging technologies, such as the size and performance advantage of bare die assembly and the reliability of encapsulated devices. The significant size and weight reduction offered by the CSP makes it ideal for use in mobile devices like cell phones, laptops, palmtops, and digital cameras.

• CSMP. CSMP is an advanced SiP solution which features a modular architecture that integrates mixed IC technologies and a wide variety of IPD such as resistors, capacitors, inductors, filters, Balanced Unbalanced (“BALUNs”) and interconnects directly onto a silicon substrate. The result is a high performance, system-level solution, which provides a significant reduction in die size, weight, number of interconnections and system board space requirements, and can be used for many applications.

• IPD. IPD technology is a key enabler of its innovative CSMP offering which features silicon-based passive integration of resistor, capacitor and inductor (“RLC”) components. IPDs are a cost effective way to reduce footprint, reduce interconnection complexity, improve component tolerance, yield and reliability.

• Flip-chip. Flip-chip solutions range from large single die packages with passive components used for graphics and ASIC devices, to modules and complex 3D packages that contain logic, memory and RF devices and that integrate flip-chip and wire bonding interconnection within the same package. Flip-chip packages are available in various package formats including Quad Flat No-Lead (“QFN”), Low-Profile Fine-Pitch Ball Grid Array (“LFBGA”), Land Grid Array (“LGA”), BGA, Flip-Chip Ball Grid Array with Multi-Package Module (“fcBGA-MP”), and complex 3D packages (SiP, MD, PiP). Low Cost Flip-Chip (“LCFC”) packages form a subgroup in the flip-chip package family which represents any flip-chip platforms that leverage cost saving features such as no Solder on Pad (“nSOP”), mold underfill (“MUF”) and bond on lead

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(“BOL”) interconnection. This low cost flip-chip technology features an innovative routing efficient interconnection structure and a simplified substrate technology design coupled with improvements in assembly technology which help achieve a significantly lower cost than traditional build-up substrate layers used for flip chip interconnection.

•

3D Package Stacking (PiP, PoP). Stacking pretested packages together in single solution is emerging as a next generation technology of choice in wireless applications. For applications such as mobile phones which require integration of a digital base band or DSP and an analog device, PiP and PoP are effective stacked package solutions. 3D, next generation packages are available in various package formats including PiP, Flip-chip PiP (“fcPiP”), PoP, Flip-chip PoP (“fcPoP”) and Fan-in Package-on-Package (“FiPoP”).

(i)	PiP is a 3D package in which separately assembled and tested packages and bare chips are stacked together in a single CSP for exceptional integration flexibility and functional density in a smaller form factor. PiP technology provides design flexibility in integrating several logic and/or analog devices with memory devices in a single package.
(ii)	The fcPiP is an innovative 3D package stacking solution which integrates the baseband, memory and analog functions of a mobile communication device into a single package. The fcPiP represents a packaging approach that combines several advanced technologies such as bumped wafer thinning, thin die flip-chip attach and low loop wire bonding on the same substrate.
(iii)	PoP is a 3D package in which fully tested packages such as single die FBGA (as defined herein) or stacked die FBGA (“FBGA-SD”) (typically MD) is stacked on top of another single FBGA-SD (which is typically base band or analog die) during the board mount process.
(iv)	The fcPoP is an innovative 3D package stacking solution which is a stackable Flip-chip BGA (“fcBGA”) as the bottom PoP package (“PoPb”). PoPb is typically an application processor or a baseband device with land pads placed on the top periphery of the package surface to enable the stacking of a second Fine Pitch BGA (“FBGA”) or PoP top (“PoPt”) above. PoPt with memory devices stacked within is assembled, tested, and yielded independently. The two packages are combined by reflowing together on the application board to form a high performance 3D packaging solution.
(v)	FiPoP is a 3D packaging stacking solution. The bottom FiPoP (“FiPoPb”) provides the flexibility to package a single device or multiple devices (logic, analog or memory), while providing land pads on the top center of the package to allow for another package or components to be reflowed on top. A fully tested package such as single die FBGA or FBGA-SD (typically memory die) is stacked on a bottom PoP package which usually contains a logic device or logic device combination (logic + logic, logic + analog).
(vi)	Pre-stacked PoP is a 3D package solution where the top PoP package is stacked on top of the bottom PoP package, and both of them are reflowed together and tested prior to the final integration on the application board.

     Our packaging solutions, including BGA, CSP, flip-chip and 3D packages are described below:

	Number
Package Format	of I/Os	Description	Types of Applications
Fine Pitch Land Grid Array (“FLGA”)	8-200	Laminate substrate based package with plastic overmolded encapsulation. Unlike a standard FBGA, second level interconnect is achieved on the LGA by connecting “lands” on the package directly onto the printed circuit board through solder re-flow. Available in a broad range of Joint Electron Device Engineering Council (“JEDEC”) standard body sizes including Thin Profile FLGA (<1.20mm) (“TFLGA”), Very Thin Profile FLGA (<1.00mm) (“VFLGA”) and Very Very Thin Profile FLGA (<0.80mm) (“WFLGA”) package thickness.	Mobile phone, wireless RF, analog, ASIC, memory chip.
FLGA-SD	8-200	Compact MD designed for space sensitive applications. Capability to stack up to seven dies in	Mobile phone, wireless RF, analog, ASIC, memory chip.

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	Number
Package Format	of I/Os	Description	Types of Applications
		one package. Available packages include Low Profile FLGA-SD, Thin Profile FLGA-SD, Very Thin FLGA-SD, Very Very Thin Profile FLGA-SD, Ultra Thin Profile FLGA-SD and Extremely Thin FLGA-SD packages.
Flip-chip Land Grid Array (“fcLGA”)	71+	LGA with flip-chip/bump interconnect instead of wire bonding.	Mobile phone, wireless RF, analog, ASIC, memory chip.
fcBGA	32-1,728	BGA with Flip-Chip/bump interconnect instead of wire bonding. Available packages include fcBGA with attached heat sink, fcBGA-MP and fcBGA for SiP packages.	DSP, ASIC, FPGA.
Flip-chip Fine Pitch BGA (“fcFBGA”)	32-900	Chip-scale BGA with flip-chip/bump interconnect, instead of wire bonding. Available in a broad range of JEDEC standard body sizes with Low Profile FBGA (<1.70mm, typically <1.40mm) (“LFBGA”), Thin Profile FBGA (<1.20mm) (“TFBGA”), Very Thin Profile FBGA (<1.00mm) (“VFBGA”) package thickness.	Mobile phone, Wide Area Network (“WAN”)/Local Area Network (“LAN”) equipment.
FBGA	40-450	Smaller and thinner BGA designed for applications which are space constrained and require electrical performance. Available in a broad range of JEDEC standard body sizes with LFBGA, TFBGA, VFBGA, Very Very Thin Profile FBGA (<0.80mm) (“WFBGA”) and Ultra Thin Profile FBGA (0.55mm max.)(“UFBGA”) package thickness. LFBGA with attached heat sink (“LFBGA-H”) is qualified for small body sizes.	Mobile hand-held devices, Global Positioning System (“GPS”) and multimedia.
Stacked Die Fine Pitch BGA (“FBGA-SD”)	16-700	Compact MD designed for space sensitive applications. Capability to stack up to seven dies in one package. Available in a broad range of JEDEC standard body sizes with LFBGA, TFBGA, VFBGA, WFBGA and UFBGA package thickness. LFBGA-H (with attached heatsink) is qualified for small body sizes.	Mobile hand-held devices and multimedia.
Plastic Ball Grid Array (“PBGA”)	169-1,253	Electrically enhanced BGA package designed for high I/O replacement.	Access/LAN equipment, PC/graphics and base station.
Stacked Die Plastic Ball Grid Array (“PBGA-SD”)	121-1,253	Increased sub-system performance achieved by integrating multiple chips into a single package. Capability to stack up to seven dies in one package.	DSPs and memory, gate arrays, ASICs, PC chipsets and peripherals, microprocessors/controllers.
Exposed Drop-in Heat Spreader Plastic BGA (“PBGA-H”)	169-1,253	Thermally enhanced PBGA with 20% greater thermal dissipation than PBGA.	Access/LAN/PC/graphics and base station equipment.
Plastic Ball Grid Array — Multi-Die (“PBGA-MD”)	74-1,253	BGA integrated with two or more MD within a PBGA.	Access/LAN/PC/graphics and base station equipment.
PiP	40-450	PiP integrates ASIC logic with memory chip(s) and can have a minimal 12x12mm footprint, 1.2 to 1.4mm maximum thickness, and incorporate a 0.5mm to 0.4mm ball pitch.	Mobile hand-held devices, PC, MPEG-1 Audio Layer 3 players (“MP3 players”), base station modems, memory cards and

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	Number
Package Format	of I/Os	Description	Types of Applications
			consumer electronics.
fcPiP	600+	3D package that stack minimally packaged die and bare die into a single molded package. A pre-tested Internal Stacking Module (“ISM”) LGA and one or more bare die are stacked with at least one bare die connected to the substrate using flip-chip interconnection.	Portable electronics, cellular phones, gaming, PDAs, digital cameras, camcorders and wireless products.
PoP	PoPb: 200-700 PoPt: 128-160	3D package in which fully tested package is stacked on top of another package during the board mount process. Available in a broad range of JEDEC standard body sizes with LFBGA, TFBGA and VFBGA .	Mobile hand-held devices, PC, MP3 players, base station modems, memory cards and consumer electronics.
fcPoP	PoPb: 168	3D package that is a stackable fcBGA, enables higher performance, higher density, finer top PoP ball pitch, and smaller/thinner PoP solution. Available in a broad range of JEDEC standard body sizes with TFBGA, VFBGA and WFBGA.	PoPb: Application baseband or multi-media processor for mobile handset and portable devices PoPt: Memory to support system and processor functions, including Double Data Rate (“DDR”), Flash (NAND, NOR), Static Random Access Memory (“SRAM”) and combinations thereof.
FiPoP	200-700	3D package in which the FiPoPb provides the flexibility to package a single device or multiple devices (logic, analog or memory), while providing land pads on the top center of the package to allow for another package or components to be reflowed on top. The FiPoPb can also incorporate a fully tested ISM package. FiPoPb is available in a broad range of JEDEC standard body sizes including TFBGA and VFBGA package thickness.	Cellular phone and mobile device digital baseband processor, digital die stack, or digital + analog baseband die stack, digital + memory (ISM) stack, Cellular phone and mobile device memory for digital processor and system memory (synchronous dynamic random access memory, NOR/NAND Flash, Static Random Access Memory )
Pre-stacked PoP	PoPt:108 PoPb:168	3D package in which the top and bottom PoP packages are assembled and tested separately, then stacked and reflowed together to produce a complete high performance 3D solution.	NAND Memory for data storage, logic/ controller, solid state disk for Mobile PC.

     Leaded Packaging. “Leaded” or “lead-frame” package is the most widely used package type and is used in almost every electronic application, including automobiles, household appliances, desktop and notebook computers and telecommunications. Leaded packages have been in existence since semiconductors were first produced and are characterized by a semiconductor die encapsulated in a plastic mold compound with metal leads surrounding the perimeter of the package. With leaded packages, the die is attached to a lead-frame (a flat lattice of leads) and very fine gold wires are bonded (welded) to the chip and the leads to provide the interconnect. The chip is then encapsulated in plastic to form a package, with the ends of the lead-frame leads protruding from the edges of the package to enable connection to a printed circuit board. Specific packaging customization and improvements are continually being engineered to improve electrical and thermal performance, shrink package sizes and enable multi-chip capability.

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     Standard Lead-frame Packages. Our standard lead-frame packages are used in a variety of applications, including mobile phones, PCs, networking systems, and consumer and industrial products. We focus on high-performance, thin profile and near chip-scale lead-frame packages. The following table summarizes our standard lead-frame packages:

	Number
Package Format	of I/Os	Description	Types of Applications
Thin Small Outline Package (“TSOP”)	28-56	Traditional lead-frame package with two-side leads, and a surface mount technology (“SMT”) designed for memory, RF/wireless, logic, linear and automotive devices.	PCs, portable electronics and networking equipment and automotive electronics.
Thin Quad Flat Package (“TQFP”)	32-128	Advanced Quad Flat Package (“QFP”) with thickness of 1.0mm for use in low profile, space-constrained applications. TQFP with copper wire bond is also available for cost effective solution.	Mobile phone, mass storage and multimedia.
Low Quad Flat Package (“LQFP”)	32-208	Advanced QFP with thickness of 1.4mm for use in low profile, space-constrained applications.	Mobile phone, mass storage and multimedia.
Metric Quad Flat Package (“MQFP”)	44-240	Traditional QFP designed for ASICs, FPGAs and DSPs.	Access/LAN equipment, multimedia and mass storage.

     Enhanced Lead-frame Packages. Our enhanced lead-frame packages are similar in design to our standard lead-frame packages but are generally thinner and smaller and have advanced thermal and electrical characteristics which are necessary for many of the leading-edge semiconductors designed for communications applications.

     We believe we are a leader in offering chip stack technology that provides the flexibility of stacking up to seven dies in a single package to improve package performance and functionality while reducing overall package size and cost. These solutions provide us with a significant competitive advantage when servicing customers who need to reduce the form factor of their devices while increasing product functionality, for instance in mobile hand-held and phone applications.

     The following table summarizes our enhanced lead-frame packages:

	Number
Package Format	of I/Os	Description	Types of Applications
QFN	4-88	Lead-frame based plastic encapsulated CSP in single mold cavity format or molded array format. Available in a broad range of JEDEC standard body sizes including Extremely Thin Quad Flat Non-Leaded Package (“XQFN”) (<0.50mm), Ultra Thin Quad Flat Non-Leaded Package (“UQFN”) (<0.65mm), Very Very Thin Quad Flat Non-Leaded Package (“WQFN”) (<0.80mm) and Very Thin Quad Flat Non-Leaded Package (“VQFN”) (<1.00mm) package thickness. QFN with copper wire bond is qualified for cost effective solution.	Mobile hand-held devices and GPS.
Dual Row Quad Flat No-Lead (“QFN-dr”)	44-156	QFN version with staggered dual row leads offers higher I/O counts.	Mobile hand-held devices and GPS.
Quad Flat No-Lead Package (Strip Etch) (“QFNs-se”)	32-396	QFNs-se, with multiple rows of terminals, is leadframe based, plastic	Computing and telecommunications, RF, power management, analog/linear,

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	Number
Package Format	of I/Os	Description	Types of Applications
		encapsulated, chip scale in molded array format (saw singulated). An exposed die pad coupled with extremely low RLC provides excellent electrical and thermal performance enhancements. Available in a broad range of JEDEC standard body sizes including UQFN (<0.65mm).	logic, ASICs, and DSP.
Qual Flat No-Lead Package (Stand off) (“QFNs-st”)	32-312	QFNs-st, with dual row/multiple rows of terminals, is leadframe based, plastic encapsulated, chip scale in molded array format (saw singulated). A stand-off exposed die pad coupled with extremely low RLC provides excellent electrical and thermal performance enhancements. Available in a broad range of JEDEC standard body sizes including WQFN and VQFN package thickness. QFNs-st with copper wire bond is qualified for cost effective solution.	Computing and telecommunications, RF, power management, analog/linear, logic, ASICs and DSP.
Bumped Chip Carrier (“BCC”)	16-84	Lead-frame based near chip-scale.	Mobile hand-held devices and GPS.
Dual Row Bumped Chip Carrier (“BCCs”)	84-148	BCC version with staggered dual row leads offers higher I/O counts.	Mobile hand-held devices and GPS.
Exposed Pad Low Quad Flat Package (“LQFP-ep”)	32-208	Thermally enhanced QFP with 30% greater thermal dissipation than MQFP.	Access/WAN/LAN equipment and PC/graphics and hard disk drive (“HDD”).
Exposed Pad Thin Quad Flat Package (“TQFP-ep”)	32-128	Thermally enhanced TQFP with 30% greater thermal dissipation than TQFP.	Access/WAN/LAN equipment, PC/graphics, HDD, mobile hand-held devices and GPS.
Stacked Die Quad Flat Package (“LQFP-SD”)	32-208	Compact MD designed for space constrained applications.	Mobile hand-held devices, GPS, HDD and multimedia.
Stacked Die Exposed Pad Low Quad Flat Package (“LQFP-ep-SD”)	32-208	Thermally enhanced LQFP-SD designed for space constrained applications with thickness of 1.4mm and greater thermal dissipation than LQFP-SD.	Mobile hand-held devices, PC, GPS, HDD, MP3 players, pagers and consumer electronics.
Stacked Die Exposed Pad Thin Quad Flat Package (“TQFP-ep-SD”)	32-128	Thermally enhanced with MD TQFP designed for space constrained applications with thickness of 1.0mm and greater thermal dissipation than LQFP-SD.	Mobile hand-held devices, PC, GPS, HDD, MP3 players and consumer electronics.
Stacked Die Thin Small Outline Package (“TSOP-SD”)	24-56	Compact MD designed for space constrained applications.	Mobile hand-held devices, GPS, HDD and multimedia.

     In response to ongoing government regulation and the industry trend towards environmentally friendly products, our packaging operations introduced a “green” molding compound and set up a dedicated lead-free pure tin plating machine for leadframe based products since 2001.

     In 2004, we announced the offering of lead-free and “green” material options for our entire package portfolio. These lead-free and “green” packages are qualified with enhanced moisture sensitivity level to withstand the higher reflow temperature at board packaging that is required for lead-free solders, complying with current JEDEC and Japan Electronics & Information Technology Industries

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Association standards for lead-free reflow profile with a peak temperature of 260 degrees Celsius. Our “green” initiative is developed in accordance with a number of international standards including the European Commission’s Directive on Waste from Electrical and Electronic Equipment and Restriction on Hazardous Substances.

     In response to industry trends toward fine line and space wafer fabrication technology, we have improved our fine pitch wire bonding capability to handle up to 35 micron in-line bond pad pitch and 40/20 micron staggered bond pitch.

     Embedded Wafer-Level Ball Grid Array (“eWLB”). We have entered into an agreement with STMicroelectronics N.V. and Infineon Technologies AG (“Infineon”) to jointly develop the next-generation of eWLB technology, based on Infineon’s first-generation technology, for use in manufacturing future-generation semiconductor packages.

     The joint development effort, for which the resulting intellectual property will be owned by the three parties to the agreement, will focus on using both sides of a reconstituted wafer to provide solutions for semiconductor devices with a higher integration level and a greater number of contact elements.

     The eWLB technology uses a combination of traditional “front-end” and “back-end” semiconductor manufacturing techniques with parallel processing of all the chips on the wafer, leading to reduced manufacturing costs. This reduced manufacturing cost, together with the increased level of integration of the silicon’s overall protective package, in addition to a dramatically higher number of external contacts, means the technology can provide significant cost and size benefits for makers of cutting-edge wireless and consumer products.

     We have ramped first generation eWLB technology to high volume production. The eWLB technology provides solutions for semiconductor devices requiring a higher integration level and a greater number of external contacts. Using a combination of traditional ‘front-end’ and ‘back-end’ semiconductor manufacturing techniques, eWLB technology greatly reduces manufacturing costs while providing a smaller package footprint with higher I/O along with increased thermal and electrical performance.

     We have established a robust, automated eWLB manufacturing process that includes wafer reconstitution, wafer level molding, redistribution using thin film technology, solder ball mount, package singulation and testing. Incoming wafers in both 8 inch and 12 inch diameters can be supported, and no bumping is required as the package is essentially built on top of a reconstituted wafer. The next generation of eWLB packages enabling reduced cost, multiple routing layers, multiple die, and expansion to larger package size and ball count is now being developed with our development partners for product offerings targeted to start in 2010.

Test Services

     We provide our customers with semiconductor test services for a number of device types, including mixed-signal, digital logic, memory, power and RF devices. Semiconductor testing measures and ensures the performance, functionality and reliability of a packaged device, and requires knowledge of the specific applications and functions of the devices being tested. In order to enable semiconductor companies to improve their time-to-market, streamline their operations and reduce costs, there has been an increasing trend toward outsourcing both packaging and test services. We have capitalized on this trend by enhancing our test service capabilities. Our test and other revenue was $357.9 million in 2009, compared to $422.2 million in 2008.

     We offer wafer probe and final testing on many different platforms, covering the major test platforms in the industry. Wafer probe is the step immediately prior to the packaging of semiconductors and involves electrical testing of the processed wafer for defects. Wafer probe services require similar expertise and testing equipment to that used in final testing. We probe wafers at either ambient or elevated temperature in accordance with our customer’s test requirement. Wafers are probed either as bumped or un-bumped wafers. For bumped wafers, we can probe both peripheral or array bumped wafers. We believe this wafer probe capability is very important to customers who require Known Good die (“KGD”) for flip-chip packaging.

     Final testing involves using sophisticated test equipment and device-specific software programs to electrically test a number of attributes of packaged semiconductors for functionality and performance in accordance with a test plan or test list. The test plan or test list varies from device to device and customer to customer. For final testing, we have either gravity feed handlers or pick-and-place handlers. We also offer strip testing for mixed-signal and RF applications. We believe strip testing offers some advantages over the conventional method, including allowing large numbers of devices to be tested at the same time, improved first pass yield, a more effective and efficient handling of smaller form factor devices and increased overall throughput.

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     In order to test the capability of a semiconductor device, our customers generally will provide us with their proprietary test programs and specify the test equipment to run those programs. Our customers at times may consign their test equipment to us. Alternatively, our customers may engage us to develop the test program and test hardware required to test their device. The devices to be tested are placed into a socket-custom load board by an automated handling system, which is connected to the test equipment, which then tests the devices using software programs developed and supplied by our customers or by us. The cost of any specific test and the time required to conduct it, ranging from a few milliseconds to several seconds, varies depending on the complexity of the semiconductor device and the customer’s test program.

     We have invested in state-of-the-art testing equipment that allows us to test a broad variety of semiconductors, especially the more complex testing of mixed-signal and high-performance digital devices.

     Mixed-signal and RF Testing. We test a variety of mixed-signal semiconductors, including those used in communications applications such as network routers, switches and interface cards; broadband products such as cable modem set-top boxes; and for wireless telecommunications products such as cellular phones, base stations, wireless local area network (“WLAN”) and Bluetooth(tm) devices, PCs and consumer applications. Bluetooth(tm) is a technology that enables short range wireless communication between different electronic appliances. We are a member of the Bluetooth(tm) Special Interest Group. We also test mixed-signal semiconductors for computers and consumer components including audio devices, CD-ROM, HHD controllers, DVD players and game consoles.

     Digital Testing. We test a variety of digital semiconductors, including high-performance semiconductors used in PCs, disk drives, modems and networking systems. Specific digital semiconductors tested include DSPs, FPGAs, microcontrollers, central processing units (“CPUs”), bus interfaces, digital ASICs and application specific standard products.

     Memory Testing. We provide wafer probe services covering a limited type of memory devices including static and non-volatile memories.

     Test-Related Services. We offer a variety of other value-added test-related services, including:

• Burn-in process support. Burn-in is the process of electrically stressing semiconductors, usually at high temperature and voltage, for a period of time long enough to cause the failure of marginal semiconductors. During burn-in process support, we perform an analysis of burn-in rejects in order to determine the cause of failure.

• Reliability testing. Reliability testing is the process of testing a semiconductor to evaluate its life span. It is performed on a sample of devices that have passed final testing.

• Thermal and electrical characterization. Thermal and electrical characterization is the process of testing a semiconductor for performance consistency under thermal and electrical stress.

• Dry pack. Dry packing is the process of baking the semiconductors in order to prevent the failure of any semiconductors due to exposure to moisture during shipping. We “dry pack” many of our packaged ICs in specially sealed, environmentally secure containers.

• Tape and reel. Many electronic assembly lines utilize “tape and reel” methods in which semiconductors are placed into a pocket tape to enable faster attachment to the printed circuit board. We offer a service in which we ship packaged and tested devices on a tape and reel mechanism, in a tray or in a tube in accordance with our customer’s post-test requirements.

Pre-production and Post-production Services

     We have developed and enhanced our pre-production and post-production services to provide a total solution for our customers. Our pre-production services for packaging include package development, and for testing include software and hardware development. Our wholly-owned subsidiary, STATS ChipPAC Test Services, Inc. in Milpitas, California, which is in Silicon Valley, provides test hardware and software development services, pre-production volume testing services, tester rentals and a unique customer-to-lab-to-factory relay for fast production offloads and capacity coordination. We also provide post-production drop shipment services for our customers. At our customers’ request, certain finished and piloted test programs are transferred to our high-volume manufacturing facilities in Asia for full production release. STATS ChipPAC Test Services, Inc. operates as a microcosm of our high-volume Asian

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operations; it operates similarly configured testing systems and handling equipment to ensure transfers to our manufacturing facilities in Asia for subsequent volume production ramps are seamless.

     Package Development. Our package development group interacts with customers early in the design process to optimize package design and manufacturability including through selection, design and development of the appropriate package, lead-frame or substrate for that device by simulating the semiconductor’s performance and end-use environment. For each project, our engineers create a design strategy in consultation with each customer to address the customer’s requirements, package attributes, design guidelines and previous experience with similar products. After a design is finished, we provide quick-turn prototype services. By offering package design and prototype services, we can reduce our customer’s development costs, accelerate time-to-volume production and ensure that new designs can be properly packaged at a reasonable cost. We offer these services at our facilities in Singapore, South Korea, China, Thailand, Taiwan and the United States.

     Test Software and Hardware Development. We work closely with our customers to provide sophisticated software engineering services, including test program development, platform conversion, multi-site conversion, test optimization and strip testing implementation. Generally, testing requires customized software to be developed for each particular semiconductor device. Software is typically provided by the customer. We also provide test development services where we will develop a total test solution for the customer. The test development process is divided into five phases. We will first create a test plan based on the customer’s specifications. Once the test plan is approved by the customer, we create the engineering designs and develop the layout for the test fixtures, generate the check-plot for the customer and, upon the customer’s approval, proceed to hardware fabrication. In conjunction with hardware fabrication, we develop the test program and convert all simulation vectors to the desired tester format. Once the test program is developed, we debug the program, the hardware and the device. We then correlate the software and hardware with the bench data provided by the customer. Thereafter, we perform device characterization to enable our customer to understand the device performance over different voltage and temperature ranges. This enables the customer to determine the optimum conditions for their device performance and also to achieve optimum test yield.

     In some cases, the test programs and hardware provided by the customer may be converted by us for use on one or more of our tester platforms. Once a test program has been converted, we correlate the test software and hardware using the correlation units or devices provided by the customer. Upon the customer’s approval of the results of the correlation of the test software and hardware, actual production testing begins. On an on-going basis, a dedicated group of our product engineers will then assist our customers in collecting and analyzing the test results and develop engineering solutions to improve their test robustness and production efficiency. We offer these services at our facilities in Singapore and the United States.

     Warehousing and Drop Shipment Services. In order to enable semiconductor companies to improve their time-to-market and reduce supply chain and handling costs, we offer warehousing and drop shipment services in which we ship packaged semiconductor devices directly to our customers’ end-customers. We either directly bill our customers for the cost of drop shipment or incorporate this into the price of our services.

Research and Development

     Our research and development efforts are focused on developing new packages, design, assembly and test services and technologies required by our existing customers and that are necessary to attract new customers. We have invested considerable resources and we are among the leaders in new product and technology development. Our expenditures for research and development in 2007, 2008 and 2009 were $34.9 million, $37.8 million and $43.4 million, respectively. As of February 1, 2010, we employed 323 dedicated professionals in our research and development department. We consider this a core element of our total service offering and expect to continue to invest significant resources in research and development.

Packaging Services

     We have established a dedicated group of engineers whose primary focus is the development and improvement of materials and process technology as well as development of new and advanced packages. We work closely with our existing customers to better understand their immediate and future packaging needs. As a result, we focus our packaging research and development efforts in part on developing packages tailored to their individual requirements. Through a co-design process, our engineers collaborate with customers on die and package designs to provide a customized solution in terms of performance, quality, cycle time and cost. These efforts take place at our package design development centers located in Singapore, South Korea, China, Taiwan, Malaysia and the United States.

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     We have a number of advanced packages under development to support our customers’ needs for high-performance packages. Our development roadmap includes flip-chip technology and comprises build-up substrate, wafer bumping and passive integration technology components. Flip-chip technology can be used in both low pin count as well as high pin count packages and is particularly suitable for devices that require more than 1,000 interconnects in a relatively small die. Build-up substrates deliver even higher interconnect density without compromising thermal and electrical performance. We believe flip-chip packages will find increasing application in high-end communications equipment such as switches, routers, PC chipsets, advanced memory buffer chips and high-end graphic processors.

     We also have next generation CSPs, both under development and in qualification, which incorporate lead-frame, laminate and tape technologies, along with MD stacking capabilities and wafer level 3D integrations. The emphasis in the development of such packages is the integration of more silicon chips in the same low-profile, small footprint and light weight package. This requires development of many enabling technologies in order to thin and stack dies in very low profile packages, Through Silicone Via (“TSV”) and wafer to wafer or wafer to die bonding technologies.

     In 2007, we established a research and development facility in Singapore focusing on TSV, micro-bump and other next generation technologies. Currently, over 30 dedicated professionals are working at this facility.

     We continually seek to develop and improve flip-chip, wafer level, SD, stacked packages or 3D packages such as PiPs and PoPs to meet customer needs. These packages are used particularly in hand-held wireless communications equipment and are extremely useful for all hand-held devices including PC, mobile hand-held devices, base station modems, base-band circuits and memories. We continue to develop total SiP solutions to meet market demand for next generation devices with higher levels of integration, increased functionality and compact sizes.

     In addition, we continue to increase our support functions for thermal, electrical, stress and package to board level reliability characterization. We offer a full range of thermal simulation and actual testing for all of our existing packages and packages under development. We have a full-service reliability laboratory that can stress test assembled semiconductors. In conjunction with local institutes and laboratories, we can also perform board level reliability testing of surface mount assembled packages.

     During the past three years, we developed and introduced a number of new packages, including:

• Chip-scale Module Package (WLCSMP-fc-SiP-SS);

• PiP — TFBGA, fcLFBGA;

• PoP — TFBGA, VFBGA, fcT/V/WFBGA;

• Laser via Through Mold compound PoP — fcWFBGA-PoP MLP;

• Flip-Chip Stacked Die Fine Pitch Ball Grid Array — fcT/L/VFBGA-SD;

• Quad Flat No-Lead with Chip-on-Lead — UQFNs-COL-mini, WQFNs-COL;

• QFNs-se;

• Quad Flat No-Lead Package (Stand off) — QFNs-st;

• QFN with copper wire;

• Memory Card Format — MS Micro, Multimedia Card, Micro SD, SD-USB, SD-USB-SiP;

• Stacked Die FBGA with Wire-in-Film Technology — T/LFBGA-SD (WIF);

• Molded Underfill fcFBGA;

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• fcBGA and fcFBGA with alternate low cost core material in substrate;

• Plated Copper RDL-WLCSP-B;

• Extremely thin wafer level CSP with big bump — XWLCSP-B;

• Fine Pitch Fan-in Package-on-Package — T/VFBGA FiPoP, fcVFBGA-FiPoP;

• eWLB; and

• Low cost fcFBGA with open SR (Solder Resist) and fcFBGA-PoP.

     We will continue to develop and introduce advanced packaging that meets the requirements of our customers.

Test Services

     We focus on developing new technologies, software and processes to enhance efficiency and reliability and to shorten test times. These include multi-site testing, strip testing, test program optimization and hardware improvements designed to permit improved utilization of existing test equipment. When necessary, we also design and build specialized equipment that is not available from outside vendors. Our test development center is an important part of our research and development efforts and is utilized to develop and debug test software prior to production, complete test software conversions and offer our customers continuous access to our development capabilities. Our test development center is located in Singapore and our pre-production test center is located in the United States.

Customers

     Our customers include some of the largest semiconductor companies in the world. We seek to diversify and broaden our customer base. In 2007, 2008 and 2009, our ten largest customers accounted for 67.0%, 66.5% and 71.8%, respectively, of our net revenues. Our top three largest customers in 2009 contributed approximately 14%, 13% and 12%, respectively, of our net revenues. If our business grows, we expect our customer concentration to decrease.

     The following table sets forth, for the periods indicated, the percentage of net revenues derived from packaging and test of semiconductors used in communications, PCs, customer and other applications:

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Communications		52.5	%		51.8	%		50.1	%
Customer and other applications		32.0			31.6			33.0
PCs		15.5			16.6			16.9
Total		100.0	%		100.0	%		100.0	%

     Our customers are located around the world. We report geographic distribution of revenue based on the location of our customers’ headquarters which is not indicative of shipment destination or end market for our services. The following table details, for the periods indicated, the percentage of net revenues received from the United States, Asia and Europe:

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
United States		74.7	%		72.5	%		72.5	%
Asia		22.3			22.5			21.7
Europe		3.0			5.0			5.8
Total		100.0	%		100.0	%		100.0	%

     In general, we believe the factors that our customers take into account in choosing their packaging and test service providers include the ability of the provider to provide packaging and test services for a wide range of semiconductor devices and the close

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proximity of the packaging and test house to their wafer fabrication plant. Close proximity between the wafer foundry and the packaging and test house enhances overall communication, simplifies supply chain logistics and results in increased yield.

     Semiconductor companies require packaging and test service providers to undergo a qualification process before selecting them as their packager or tester. The qualification process for a packaging service company is a lengthy and rigorous process that typically takes three to six months, and we believe typically costs the customer approximately $250,000 to $300,000. In the case of a test service company, the test company must, in addition to ensuring that the requisite tester platform is used, have the requisite production engineering expertise to pass a highly specialized and rigorous test qualification process. The test qualification process typically takes one to two months where the test house already has the tester technology and three to six months where the tester technology is a new test platform, and we believe typically costs the customer approximately $20,000 to $100,000. Once a primary supplier has been selected, that supplier gains insight into its customer’s business operations and an understanding of its products as part of the overall working relationship. The packaging and test service providers’ familiarity with the customer’s requirements and accordingly, their ability to better meet those requirements, combined with the pressures of a semiconductor company to meet the time-to-market demands of its customers, help to assure continuity of relationship with their providers.

Sales and Marketing

     We market our services through a direct sales force and technical marketing groups strategically located in close proximity to our customers, in the United States, South Korea, Japan, China, Singapore, Malaysia, Taiwan, the United Kingdom and the Netherlands. Our account managers, customer service representatives and sales support personnel form teams that focus on specific customers or geographic regions.

     Customers generally deliver rolling six month forecasts and release production die to us in daily or weekly increments for packaging, test and distribution. These near-term forecasts guide us as to anticipated volumes, but provide no meaningful backlog statistics. Substantially all of our materials inventory is purchased based on customer forecasts. We carry relatively low levels of work-in-progress and finished goods inventory.

     Our marketing and business development efforts focus on creating a brand awareness and familiarity with our advanced device packaging technologies and an understanding of our end-user market applications in wireless handset and mobile hand-held devices graphics, PC chipsets, WLAN, Bluetooth(tm), flash memory, storage and networking. We market our leadership in advanced packaging and our ability to supply a broad line of packaging and test services to the semiconductor industry. We build relationships with our customers through a direct sales force and technical marketing group, the delivery of “white papers” at industry conferences, and information available on our website.

Pricing Policy

     Test services are priced competitively against the market and vary principally on the type of tester used and length of tester CPU time used, typically referred to as test time on per-second basis. The price of test time is a function of tester platform and hardware configuration, which are usually determined by our customers based on the function and complexity of a particular semiconductor device. In general, the test time for a complex semiconductor device will be longer than a less complex semiconductor device. Wafer probe pricing is determined by similar factors. Any reduction in test time resulting from optimization of test program or optimum hardware configuration means savings for our customers.

     Packaging services are priced competitively against the market and vary depending on such factors as package complexity and material cost. Design costs are not material but when incurred may be charged to a customer separately under non-recurring engineering cost or built into the unit price.

Customer Service

     We place strong emphasis on customer service. Our broad service offerings, dedicated customer account teams and commitment to finding solutions to our customers’ needs have enabled us to develop strong relationships with many of our customers. Our information technology architecture includes e-business links to some of our customers’ systems and our mySTATSChipPAC internet portal, which may be directly accessed by our customers. These features enable our customers to obtain real-time information on work-in-progress, inventory and shipment status, as well as other information relating to our operations.

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Suppliers

Raw Materials

     Our packaging operations depend upon obtaining adequate supplies of raw materials on a timely basis. The principal materials used in our packaging process are lead-frames or laminate substrates, gold wire, molding compound, epoxy, tubes and trays. The prices of lead-frames, laminate substrates, gold wire, molding compound, epoxy, tubes and trays tend to be volatile. We purchase materials based on the regular weekly and monthly forecasts of our customers. Our customers are generally responsible for most or all of the costs of unique materials that we purchase but do not use, particularly those lead-frames and substrates that are ordered on the basis of customer-supplied forecasts. We manage inventory with automated materials management processes using enterprise resource planning systems. We work closely with our primary materials suppliers to ensure the timely availability of materials supplies, and we are not dependent on any one supplier for a substantial portion of our materials requirements. The materials we procure are normally available and we are able to meet our production requirements from multiple sources through new materials qualifications, periodic negotiation and placement of written purchase orders. We typically combine our global requirements into centrally negotiated agreements to gain economies of scale in procurement and more significant volume discounts. We generally do not have long-term supply contracts with our supplier. However, should materials become scarce, we would look to enter into long-term supply agreements with key suppliers. We seek to minimize shortage of supply by ensuring that we have multiple sources of supply. The major suppliers of our substrate material are located in South Korea, Japan, Taiwan and China.

Equipment

     Our operations and expansion plans depend on us being able to obtain an adequate supply of packaging and test equipment on a timely basis. We work closely with our major equipment suppliers to ensure that equipment meets our performance specifications and is delivered on time.

     With the exception of a few key suppliers that provide reserved equipment delivery slots and price discount structures, we have no binding supply agreements with any of our suppliers. A reserved equipment delivery slot is one which allows us to obtain an accelerated delivery of the equipment over and above the delivery schedule previously committed to by the supplier. We acquire our packaging and test equipment on a purchase order basis. Increased levels of demand for the type of capital equipment required in our business may cause an increase in the price and lengthen delivery cycles. Typically, price discounts are offered for volume purchases. We leverage our large volume of orders for testers, probers, handlers and other equipment with our equipment suppliers to secure favorable terms for our equipment purchases, including pricing and accelerated delivery times. The unavailability of new test or packaging equipment, the failure of such equipment or other equipment acquired by us to operate in accordance with our specifications or requirements or delays in the delivery of such equipment, could delay implementation of our expansion plans and could materially and adversely affect our business, financial condition and results of operations. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Company — If we are unable to obtain packaging and testing equipment in a timely manner or on reasonably favorable terms and prices, we may be unable to meet customer demand and our revenue may decline.”

     Packaging Equipment. The primary equipment used in packaging includes die saw, die attach, wire bonders and mold systems. Certain of our wire bonders allow for interchangeability between lead-frame and laminate packages. We purchase die attach and wire bonders from major international manufacturers, including Kulicke & Soffa Industries, Inc., Shinkawa Ltd, ASM Pacific Technology Limited and BE Semiconductor Industries NV (formerly known as Oerlikon Esec and prior to that, Unaxis). As of February 1, 2010, we operated an aggregate of 4,538 wire bonders. We purchase mold systems from major international manufacturers including Asahi Engineering Co Ltd, Dai-Ichi Seiko Co Ltd. and Towa Corporation.

     Testing Equipment. Testing equipment is one of the most critical components of the wafer probing and device testing process. We generally seek to maintain testers from different vendors with similar functionality and the ability to test a variety of different semiconductors. In general, certain semiconductors can only be tested on a limited number of specially configured testers. The majority of our testing equipment is supplied by Teradyne, Inc., Verigy Ltd., Advantest Corporation and LTX-Credence Corporation.

     As of February 1, 2010, we operated 951 testers, comprising 756 mixed-signal testers, 157 digital testers and 38 memory testers. In certain cases where a customer has specified testing equipment that is not widely applicable to other products that we test, we have required that the customer provide the equipment on a consignment basis. Of the 951 testers, 157 are on consignment from customers. In addition to testing equipment, we maintain a variety of other types of equipment, such as automated handlers and probers (with special handlers for wafer probing), scanners, reformers and PC workstations for use in software development.

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Quality Control

     We maintain a team of quality control staff comprising engineers, technicians, inspection specialists and other employees whose responsibilities are to monitor our packaging and test processes to ensure high quality. Our quality assurance systems impose strict process controls, statistical in-line monitors, supplier control, data review and management, quality controls and corrective action systems. Our in-house laboratory is equipped with advanced analytical tools and provides the necessary equipment and resources for our research and development and engineering staff to continuously enhance product quality and process improvement.

     Our packaging and test operations are undertaken in clean rooms where air purity, temperature and humidity are controlled. To ensure the stability and integrity of our operations, we maintain clean rooms at our facilities, for all of our test operations and some of our packaging operations, which meet ISO 14644 standards.

     Our packaging and test operations in Singapore, Icheon, South Korea, Shanghai, China, Kuala Lumpur, Malaysia and Bangkok, Thailand are all ISO 9001, TS16949, ISO 14001 and OHSAS 18001 certified. Our subsidiary in Taiwan, STATS ChipPAC Taiwan Semiconductor Corporation, is ISO 9001, ISO 14001 and OHSAS 18001 certified. ISO 9001 is an international standard on the requirements for production of quality products and services. It also sets forth quality management systems for product design, product development, installation and servicing. TS16949 is a quality management system that addresses the specific production needs of automotive customers. ISO 14001 is an international standard on environmental management systems to ensure environmental protection and prevention of pollution in balance with socio-economic needs while OHSAS 18001 is the standard for implementation of an occupational health and safety management system.

Competition

     The independent SATS industry is very competitive and highly fragmented. In order to compete, we must offer state-of-the-art testing services and bring the most technologically advanced packages to market as quickly as our competitors and at comparable prices. Packaging and test services are provided by both large multi-national companies and small niche market competitors. We face substantial competition from a number of competitors whose facilities are primarily located in Asia.

     Our primary competitors and their primary locations are as follows:

• Advanced Semiconductor Engineering, Inc. — South Korea, Taiwan, China, Malaysia, Singapore, Japan and the United States;

• Amkor Technology, Inc. — South Korea, Japan, Taiwan, China, the Philippines, Singapore and the United States; and

• Siliconware Precision Industries Co., Ltd. — Taiwan and China.

     Each of these companies has significant packaging capacity, financial resources, research and development operations, marketing and other capabilities, as well as some degree of operating experience. These companies also have established relationships with many large semiconductor companies, some of which are current or potential customers of ours.

     We also compete with the internal capabilities and capacity of many of our current and potential IDM customers. Many IDMs have greater financial and other resources than we do and may rely on internal sources for packaging and test services for reasons including:

• their desire to realize higher utilization of their existing packaging or test capacity;

• their unwillingness to disclose proprietary technology;

• their possession of more advanced packaging or testing technologies; and

• the guaranteed availability of their own packaging or test capacity.

     The principal elements of competition in the independent semiconductor packaging industry include the variety of packages offered, price, location, available capacity, cycle time, engineering capability, technical competence, customer service and flexibility.

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In the area of test services, we compete on the basis of quality, cycle time, pricing, location, available capacity, software development, engineering capability, technical competence, customer service and flexibility. We believe that we compete favorably in these areas.

     We also compete in the independent testing market with smaller niche companies, which offer limited services and compete principally on the basis of engineering capability, location and available capacity.

Intellectual Property

     Our ability to develop and provide advanced packaging technologies and designs for our customers depends in part on our proprietary know-how, trade secrets and other patented and non-patented technologies, which we either own or license from third parties. We have licenses to use numerous third party patents, patent applications and other technology rights, as well as trademark and other intellectual property rights, in the operation of our business. We believe that the material licenses should be renewable under normal or reasonable commercial terms once they expire.

     Our ability to compete successfully and achieve future growth in net revenues will depend, in part, on our ability to develop and to protect our intellectual property and the intellectual property of our customers. We seek to protect proprietary information and know-how through patents, the use of confidentiality and non-disclosure agreements and limited access to and distribution of proprietary information. As of February 1, 2010, our Company and our various subsidiaries held a total of approximately 1,361 issued patents and pending patent applications. Of these, we have approximately 329 patents granted or allowed by the PTO and approximately 101 patents registered or allowed in Singapore, South Korea and other countries.

     When we are aware of intellectual property of others that may pertain to or affect our business, we attempt to either avoid processes protected by existing patents, cross-license or otherwise obtain certain process or package technologies. In addition, we execute confidentiality and non-disclosure agreements with our customers and consultants and limit access to and distribution of our proprietary information.

     Our ability to compete successfully and achieve future growth will rely in part on the technological skills and innovation of our personnel and our ability to develop, maintain and protect proprietary technologies. The departure of any of our key management or technical personnel or the breach of their confidentiality and non-disclosure obligations or our failure to achieve our intellectual property objectives or avoid infringement could have a material adverse effect on our business, financial condition and results of operations.

     In February 2006, our Company and its wholly-owned subsidiaries, ChipPAC and STATS ChipPAC (BVI) Limited, were named as defendants in the California Litigation. The plaintiff, Tessera, has asserted that semiconductor chip packaging, specifically devices having BGA and multi-chip BGA configurations used by the defendants infringe certain patents of Tessera. Tessera has further asserted that our Company is in breach of an existing license agreement entered into by Tessera with ChipPAC, which agreement has been assigned by ChipPAC to our Company.

     In May 2007, at Tessera’s request, the ITC instituted the First ITC Investigation of certain of our Company’s co-defendants in the California Litigation and other companies, including certain of our Company’s customers. In addition, in April 2007, Tessera instituted the Texas Action against certain of our Company’s co-defendants in the California Litigation and other companies. In the First ITC Investigation, the ITC issued a limited exclusion order in May 2009 preventing the named companies from importing certain packaged semiconductor chips and products containing them into the United States. The respondents in the First ITC Investigation appealed to the U.S. Court of Appeals for the Federal Circuit and the appeal is pending. The Texas Action seeks damages and injunctive relief against the named defendants. Both the First ITC Investigation and the Texas Action allege infringement of two of the same patents asserted by Tessera in the California Litigation, and may involve some of the same products packaged by our Company that are included in the California Litigation.

     In May 2008, the ITC instituted the Second ITC Investigation of our Company and other semiconductor package assembly service providers that are included in the California Litigation. In the Second ITC Investigation, Tessera sought an order to prevent the Respondents from providing packaging or assembly services for certain packaged semiconductor chips incorporating small format non-tape BGA semiconductor packages and products containing them, for importation into the United States. In addition, Tessera sought a general exclusion order excluding from importation all small format non-tape BGA semiconductor packages (and downstream products containing such packages), regardless of whether such packages are assembled by the Respondents. The Second ITC Investigation alleged infringement of three of the same patents asserted by Tessera in the California Litigation. Our Company responded to the complaint in June 2008. In February 2009, the Second ITC Investigation was stayed pending the outcome of the First

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ITC Investigation. In March 2009, Tessera moved to terminate the Second ITC Investigation. In August 2009, the ITC issued a final determination terminating the Second ITC Investigation.

     The district court in the California Litigation has vacated the trial schedule and stayed all proceedings pending a final resolution of the First ITC Investigation. The PTO has also instituted reexamination proceedings on all of the patents Tessera has asserted in the California Litigation and the Second ITC Investigation. It is not possible to predict the outcome of the California Litigation, the total costs of resolving the California Litigation, or when the stay in the California Litigation will be lifted; nor is it possible to predict the outcome of the First ITC Investigation or the Texas Action. It is also not possible to predict the outcome of the PTO proceedings or their impact on the California Litigation or the First ITC Investigation.

     We believe that we have a meritorious defense to these claims and intend to defend the lawsuit(s) vigorously. A court or ITC determination that our products or processes infringe the intellectual property rights of others could result in significant liability and/or require us to make material changes to our products and/or processes. Due to the inherent uncertainties of the lawsuit(s) and investigation(s), we cannot accurately predict the ultimate outcome and it could result in significant liability and/or injunction and could have a material adverse effect on our business, financial condition and results of operations.

     We also, from time to time, receive from customers request for indemnification against pending or threatened infringement claims brought against such customers, such as the Tessera cases described above. The resolution of any future allegation or request for indemnification could have a material adverse effect on our business, financial condition and results of operations.

     Our primary registered trademark and trade name is “STATSChipPAC”. We also own or are licensed to use other trademarks.

Insurance

     We maintain insurance policies covering losses, including losses due to business interruption and losses due to fire, which we consider to be adequate. Our insurance policies cover our buildings, machinery and equipment. The policies are subject to deductibles and exclusions that result in our retention of a level of risk. Significant damage to our production facilities, whether as a result of fire or other causes, would have a material adverse effect on our business, financial condition and results of operations. We are not insured against the loss of any of our key personnel.

Environmental Matters and Compliance

     Our manufacturing operations use many chemicals, gases and other hazardous substances and also generate gaseous, liquid and solid wastes. We comply with international standards administered by the International Organization for Standardization, the Occupational Safety and Health Administration and Trading Standards. In addition, we are subject to regulatory requirements on, and potential liabilities of the environmental aspects of manufacturing processes arising under laws and regulations governing, among other things, the usage, storage, discharge and disposal of chemicals, air and water discharges as well as monitoring and remediation of soil and groundwater contamination. These environmental aspects are identified and managed in a proactive and systematic way via the ISO 14001 standard to which six of our manufacturing facilities are certified. We regularly send samples of emissions and wastes to third party accredited laboratories for analysis to ensure our compliance with the environmental laws and regulations that apply to us. We believe that we are in substantial compliance with all current environmental laws and regulations applicable to our operations and facilities.

     Furthermore, our activities are subject to regulatory requirements on the environmental impacts of products such as the European Union’s Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment and other similar legislations in China and certain states in the United States. As a result of these laws and regulations, we expect that our customers will increasingly demand products that do not contain these restricted substances, such as lead as an alloy in soldering material. Such requirements may adversely affect our manufacturing costs by requiring us to acquire costly equipment or materials or to redesign some of our processes, thereby resulting in further cost increases from research and development and quality control. In addition, failure to meet these demands could materially and adversely affect our revenues.

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C. Corporate Structure

     The diagram below summarizes our corporate structure. We may, from time to time, make acquisitions of, or investments in, other companies or businesses.

Notes:
(1)	In June 2006, we entered into a strategic joint venture with CR Logic to sell packaging and test equipment related to specific low lead count packages to CR Logic’s indirect wholly-owned subsidiary, ANST, in connection with which we acquired a 25% shareholding in MAT with CR Logic owning a 75% interest. ANST, an assembly and test company based in Wuxi, China, is a wholly owned subsidiary of MAT.
(2)	In October 2007, we completed the acquisition of LSI’s assembly and test operations in Thailand.

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D. Property, Plants and Equipment

     Our packaging and test network comprises 14 facilities throughout Asia and the United States. In 2009, we closed our test facility in San Diego, California. The following chart provides information regarding our facilities. For information on the aggregate capacity of our facilities in terms of the number of wire bonders and testers we operate, see “— B. Business Overview — Suppliers — Equipment.” Our utilization rates for equipment for 2007, 2008 and 2009 were 75%, 64% and 52%, respectively.

	Area			Principal Packaging
Property/Location (1)	(Sq. Feet)		Functions/Services	or Services Provided
Yishun, Singapore (2)		594,738	Turnkey packaging and test services, research and development, warehousing services, and drop shipment services	Test services, including mixed-signal and high performance testing, wafer sort and probe, traditional and advanced leaded and laminate packaging including BGA, flip-chip packaging, wafer level packaging and CSP, wafer bumping and fabrication of integrated passive devices and drop shipment services.
Ang Mo Kio, Singapore		18,948	Corporate executive, administrative, sales and marketing, and finance office.	Corporate administration and finance, sales and marketing.
Woodlands, Singapore (3)		51,129	Research and development on 3D wafer level integration with TSV.	Research and development on 3D wafer level integration with TSV and eWLB.
Qing Pu, Shanghai, China (4)		983,276	Turnkey packaging and test services, flip-chip, research and development, warehousing services, and drop shipment services	Packaging of leaded packages, CSP, BGA, flip-chip, memory card, wafer probe, test and distribution services.
Song Jiang, Shanghai, China		11,795	Solder bump services for flip-chip assembly.	Eutectic/High-lead/Lead-free solder bump for 200mm wafers.
Icheon, South Korea		828,738	Turnkey packaging and test services, research and development, warehousing services, drop shipment services and employee dormitories.	Advanced laminate packaging such as SD, SiP and flip-chip, standard laminate packaging such as XBGA and FBGA and test services.
Icheon, South Korea		210,200	Turnkey packaging and test services, research and development, warehousing services, and drop shipment services.	Test services, including mixed-signal and high performance testing, wafer sort and probe, traditional and advanced leaded and laminate packaging including XBGA, flip-chip packaging and FBGA.
Hsin-Chu Hsien, Taiwan (5)		166,751	Test services, research and development, warehousing services, and drop shipment services.	Test development, final test, wafer probe and distribution services.
Hsin-Chu Hsien, Taiwan		58,128	Solder bump services for flip-chip assembly.	Eutectic/High-lead solder bump for 300mm wafers.
Kuala Lumpur, Malaysia (6)		488,448	Turnkey packaging and test services, research and development, warehousing services, and drop shipment services.	Advanced lead-frame packages such as lead-frame chip-scale package (“LFCSP”) and BCC and test services.
Pathumthani, Thailand (7)		463,000	Turnkey packaging and test services, research and development, warehousing services, and drop shipment services.	Test services, including mixed-signal and high performance testing, wafer sort and probe, traditional and advanced leaded and laminate packaging, including BGA, and drop shipment services.
Fremont, California, United States		56,320	Sales, marketing, administration and research and development.	Sales, marketing, administration and design review services.

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	Area			Principal Packaging
Property/Location (1)	(Sq. Feet)		Functions/Services	or Services Provided
Milpitas, California, United States		33,984	Test facility and sales office.	Sales, marketing, administration, design and test engineering services.
Tempe, Arizona, United States		9,299	Package design, research and development and sales office.	Sales, marketing, administration, design and characterization services.

Notes:
(1)	We lease all of our facilities except where otherwise noted.
(2)	We own the production assets but lease the land from the statutory housing development board of the Government of Singapore under a long-term lease with an initial term expiring in March 2026 with an option to renew.
(3)	We own the research and development assets but lease the premises for a term expiring in October 2011 with an option to renew for a further term to be mutually agreed.
(4)	We own the building and improvements and lease the land, but the land and all buildings on the land will revert to the lessor upon the expiration of the long-term lease in 2044.
(5)	STATS ChipPAC Taiwan Semiconductor Corporation owns the land and building, which are subject to mortgages and certain other security interests.
(6)	We own the building and improvements and lease the land from the State Government of Selangor, Malaysia, but the land and all buildings on the land will revert to the lessor upon the expiration of the long-term lease in 2086.
(7)	We own the land and building.

ITEM 4A. UNRESOLVED STAFF COMMENTS

     None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

     The following discussion of our business, financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth under “Item 3. Key Information — D. Risk Factors” and elsewhere in this annual report. Our consolidated financial statements are reported in U.S. dollars and have been prepared in accordance with U.S. GAAP. 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 first three quarters of 2009 ended on March 29, June 28 and September 27, respectively, and our fourth quarter and fiscal year 2009 ended on December 27. Our first three quarters of 2008 ended on March 30, June 29 and September 28, respectively, and our fourth quarter and fiscal year 2008 ended on December 28. Our first three quarters of 2007 ended on April 1, July 1 and September 30, respectively, and our fourth quarter and fiscal year 2007 ended on December 30. Unless otherwise stated, all years and dates refer to STATS ChipPAC’s fiscal years.

Overview

     We are a leading service provider of semiconductor packaging design, bump, probe, assembly, test and distribution solutions. We have the scale to provide a comprehensive range of semiconductor packaging and test solutions to a diversified global customer base servicing the computing, communications, consumer and industrial markets.

Global Market Conditions

     The United States and other countries have experienced difficult economic conditions, including unprecedented financial market disruption. The current downturn in the global economy and the semiconductor markets that accelerated during the second half of

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2008 and continued well into 2009 have adversely affected, and we expect will continue to affect, demand for our products and services. The uncertainty in global economic conditions may also make it difficult for our customers to accurately forecast and plan future business activities. Despite the recent improvement in the global economic conditions, the uncertainty in global economic conditions remains and there can be no assurance that global economic conditions will continue to improve. A sustained global economic slowdown and downturn in the semiconductor industry would have a material adverse effect on our results of operations, cash flow, financial position and/or prospects.

     Furthermore, restrictions on credit globally and foreign currency exchange rate fluctuations in countries in which we have operations may impact economic activity and our results. Credit risk associated with our customers and our investment portfolio may also be adversely impacted. Financial market disruption may also result in increased interest expense or inability to obtain financing for our operations or investments.

Proposed Capital Reduction and Cash Distribution

     In January 2008, we announced our intention to effect a proposed capital reduction to return surplus share capital in an amount of up to $813.0 million to our shareholders. At an extraordinary general meeting held on March 17, 2008, our shareholders approved the proposed capital reduction.

     Among other conditions, the proposed capital reduction was subject to and conditional upon our Company being able to obtain adequate debt financing to fund the cash distribution pursuant to the capital reduction and the repayment of certain of our outstanding debt on terms and conditions acceptable to us. The amount of the cash distribution would accordingly have been determined based on the proceeds of such debt financing made available to us. In furtherance of the proposed capital reduction, we commenced a cash tender offer and consent solicitation in respect of our senior notes in June 2008 but terminated it in August 2008 because the financing condition under the tender offer and consent solicitation was not satisfied.

     In February 2009, we announced that we would not proceed with the proposed capital reduction as previously approved at the March 2008 shareholders’ meeting and the repayment of certain outstanding debt as given the economic environment at that time, we were not able to obtain debt financing to fund the proposed cash distribution on terms and conditions acceptable to us.

Temasek’s Subsidiary, STSPL’s, Tender Offer

     In March 2007, STSPL, a wholly-owned subsidiary of Temasek, launched a voluntary conditional cash tender offer for our ordinary shares and ADSs that STSPL did not already own. Temasek, a private limited company incorporated in Singapore, is wholly-owned by the Minister for Finance (Incorporated) of Singapore, a body corporate constituted by the Minister for Finance (Incorporation) Act (Cap. 183). The tender offer also included an offer by STSPL for our outstanding $115.0 million aggregate principal amount of our zero coupon convertible notes and $150.0 million aggregate principal amount of our 2.5% convertible notes. Concurrently with the tender offer, STSPL made an options proposal to all holders of options granted under STATS ChipPAC’s share option plans.

     In May 2007, the tender offer closed with STSPL and its concert parties holding 83.1% of the outstanding ordinary shares (including ordinary shares represented by ADSs, but excluding the ordinary shares issuable upon conversion of the $134.5 million aggregate principal amount of our 2.5% convertible notes acquired by STSPL) and $134.5 million aggregate principal amount of our 2.5% convertible notes. The balance $15.5 million outstanding principal amount of our 2.5% convertible notes were converted into ADSs in May 2007.

     As of February 1, 2010, Temasek through STSPL, beneficially owned 1,845.7 million ordinary shares, representing approximately 83.8% of our Company’s ordinary shares following STSPL’s conversion of its entire $134.5 million of our 2.5% convertible notes into 145.1 million ordinary shares on May 22, 2008.

     In 2007, we recorded tender offer expenses of $10.9 million, consisting of investment banking, legal, accounting, insurance, printing and other costs associated with the tender offer.

     Changes in share ownership by shareholder may result in a limitation on the amount of the net operating losses and unutilized capital allowances that are available as carryforwards for use by us. We reviewed the tax effect of such a shareholder change in connection with the tender offer by STSPL in 2007. In January 2008, the Singapore tax authorities confirmed that the limitations

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relating to our ability to carryforward certain Singapore tax losses and capital allowances for offset against our future taxable profits in connection with the tender offer by STSPL were not affected subject to the fulfillment of certain continuing conditions. Concurrently, approximately $311.6 million of such tax losses and capital allowance carry forwards continued to be made available to our Company’s operations in Singapore.

Factors Affecting Our Results of Operations

     Cyclicality of the Semiconductor Industry. Our results of operations are influenced by the state of the global semiconductor industry which is highly cyclical. In late 2006, we experienced a softening of our business as our customers corrected their excess inventory positions. The semiconductor industry experienced average growth between 2% and 3% in 2007 as compared to 2006, but declined between 3% and 5% in 2008 as compared to 2007 due to the deterioration in the global economic condition and downturn in the semiconductor industry triggered by an unprecedented financial crisis. The semiconductor industry declined by approximately 11% in 2009, as the decline continued in the first half of 2009, and recovered to some extent in the second half of 2009. Market research data projects a growth in the semiconductor industry of approximately 10% to 13% in 2010. We anticipate the outsourced semiconductor assembly and test industry to grow at a faster rate than the semiconductor industry as a whole.

     In 2007, our net revenues grew by 2.1% to $1,651.6 million. The growth of our net revenues in 2007 was lower on a percentage basis than previous years because we were impacted by weak demand from certain large customers. In 2008, our net revenues grew by 0.4% to $1,658.2 million. The growth of our net revenues in 2008 was lower on a percentage basis than 2007 as we were impacted by the downturn in the global economy and the semiconductor markets that accelerated during the second half of 2008. In 2009, our net revenues declined by 20.0% to $1,325.7 million. The decline of our net revenues in 2009 was primarily due to lower demand for our services as a result of the global economic downturn. We continue to expect that the cyclicality of and state of the semiconductor industry will have a significant impact on our results of operations.

     Declining Prices. The semiconductor industry is characterized by price erosion which can have a material adverse effect on our revenues and gross margins, particularly when coupled with declining capacity utilization. Prices of our products at a given level of technology decline over the product life cycle, commanding a premium in the earlier stages and declining towards the end of the cycle. To maintain our profitability, we offset decreases in average selling prices by improving our capacity utilization rates and production efficiency, or by shifting to higher margin test and packaging services. In addition, we continue to develop and offer test and packaging services which command higher margins. We expect average selling prices to fluctuate depending on our product mix in any given period and such fluctuations in average selling prices to intensify if the current downturn in the semiconductor industry continues.

     Cost of Revenues. Our results of operations are generally affected by the capital-intensive nature of our business. Our cost of revenues include depreciation expense, attributed overhead such as facility rental, utilities and facility operating costs and cost of labor and materials. Our fixed costs comprise largely the depreciation expenses related to our test and packaging equipment, facility rental, utilities and facility operating costs. Depreciation of our equipment and machinery is generally provided on a straight-line basis over their estimated useful lives of eight years. We routinely review the remaining estimated useful lives of our equipment and machinery to determine if such lives should be adjusted due to changes in technology, production techniques and our customer base. However, due to the nature of our operations, which may include sudden changes in demand in the end markets, and due to the fact that certain equipment are dedicated to specific customers, we may not be able to accurately anticipate declines in the utility of our equipment and machinery. Consequently, impairment charges on our equipment and machinery may be necessary. In 2008, we recorded equipment impairment charges of $21.1 million as a result of our ongoing assessment of property, plant and equipment for impairment.

     Our variable costs comprise cost of materials, payroll and operating supplies. The cost of our packaging services will typically include a higher proportion of variable costs compared to test services. Our variable costs may be subject to various global economic factors such as gold prices, oil prices and fluctuations in foreign exchange rates.

     Capacity Utilization. Increases or decreases in capacity utilization can have a significant effect on gross profit margins since the unit cost of test and packaging services generally decreases as fixed charges, such as depreciation expense, facility rental, utilities and facility operating costs, are allocated over a larger number of units tested and packaged. Although our capacity utilization maintained at the same level in 2007 as in 2006, our capacity utilization rates declined in 2008 primarily as a result of the decrease in demand for our packaging and test services resulting from the downturn in the semiconductor industry. The decline continued in the first half of 2009, although, in the second half of 2009, our capacity utilization improved. Market research data projects a growth in the semiconductor industry of approximately 10% to 13% in 2010. We expect the outsourced semiconductor assembly and test industry to

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grow at a faster rate than the semiconductor industry as a whole. We expect our capacity utilization to improve in 2010 given such outlook. Our ability to manage our gross profit margins will continue to depend in part on our ability to effectively manage our capacity utilization.

     Goodwill and Intangible Assets. As of December 27, 2009, we had goodwill and other intangible assets of approximately $551.1 million and $40.0 million, respectively.

     Goodwill is recorded when the cost of an acquisition exceeds the fair market value of the net tangible and identifiable intangible assets acquired. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually. These tests are performed more frequently whenever circumstances indicate that the carrying value may not be recoverable. Impairment losses are recorded when the carrying amount of goodwill and intangible assets exceeds their respective implied fair values. We performed an impairment review at the end of 2004 and recorded an impairment charge of $453.0 million to our results of operations in 2004 on our goodwill associated with the acquisition of ChipPAC, with determination of fair value supplemented by independent appraisal.

     In 2007, 2008 and 2009, we completed our annual test for impairment and determined that the fair value of the reporting units exceeded their carrying value, and therefore goodwill was not impaired.

     We may be required in the future to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill or other intangible assets is determined. Various uncertainties, including deterioration in the global economic condition and downturn in the semiconductor industry, could impact expected cash flows to be generated by the goodwill or other intangible assets, and may result in impairment of these assets in future. We cannot predict the occurrence of certain events or circumstances that might adversely affect the carrying value of goodwill in future. Such events may include, but are not limited to, strategic decisions made in response to economic and competitive conditions and the impact of the economic environment on our business. Should an impairment be determined to have occurred, such impairment losses are recorded as a charge to income from continuing operations and notwithstanding that any such impairment would be a non-cash expense, this will likely have a significant adverse effect on our results of operations.

     See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Company — We recorded an impairment charge of $453.0 million to our earnings in 2004 and may be required to record another significant charge to earnings in the future when we review our goodwill or other intangible assets for potential impairment.”

Critical Accounting Policies

     We believe the following accounting policies are critical to our business operations and the understanding of our results of operations. Our preparation of our financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, and disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. If actual results differ significantly from the estimates and assumptions, there could be a material adverse effect on our financial statements.

Revenue Recognition, Allowance For Doubtful Debts, Trade Discounts and Allowances and Sales Returns

     We derive revenue primarily from wafer probe and bumping, packaging and testing of semiconductor ICs. Net revenues represent the invoiced value of services rendered, net of returns, trade discounts and allowances, and excluding goods and services tax.

     Revenue is recognized when there is evidence of an arrangement, fees are fixed or determinable, collectibility is reasonably assured, the service has been rendered, the revenue to be recognized is billable under the terms of the arrangement and not contingent upon completion of undelivered services, and, where applicable, delivery has occurred and risk of loss has passed to the customer.

     We generally do not take ownership of customer supplied semiconductors as these materials are sent to us on a consignment basis. Accordingly, the value of the customer supplied materials is neither reflected in revenue nor in cost of revenue.

     We are subject to credit risk of our customers and we make estimates of the collectibility of our accounts receivable. We review the accounts receivable on a periodic basis and make specific allowance when there is doubt as to the collectibility of individual accounts. In evaluating the collectibility of individual receivable balances, we consider the age of the balance, the customer’s historical payment history, its current creditworthiness and current economic trends. We mitigate our credit risk through our credit

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evaluation process, credit policies, and credit control and collection procedures but these methods cannot eliminate all potential credit risk losses. Additional allowances may be required in the future if the financial condition of our customers or general economic conditions deteriorate. Our actual uncollectible accounts have not historically been significantly different from our estimates.

     Similarly, we make estimates of potential sales returns and discounts which we allow for volume purchases and early payments as a deduction from gross revenue based on our historical experience and expectations of our customers’ ultimate purchase levels and payment timing. Actual revenues may differ from our estimates if future customer purchases or payment timing differ from our estimates, which may happen as a result of changes in general economic conditions, market demand for our customers’ products, or desire by our customers’ interest in achieving payment timing discounts. Our actual returns and discounts have not historically been significantly different from our estimates.

Valuation of Inventory

     The valuation of inventory requires us to estimate obsolete or excess inventory as well as inventory that are not of saleable quality. The determination of obsolete or excess inventory requires us to estimate the future demand from our customers within specific time horizons, generally six months or less. The estimates of future demand that we use in the valuation of inventories are the forecasts provided by our customers. If our inventory for specific customer forecast is greater than actual demand, we may be required to record additional inventory reserves, which would have a negative impact on our gross margin.

     Our inventories are stated at the lower of cost, determined on the weighted average basis, and market value, as estimated by us. Cost is generally computed on a standard cost basis, based on normal capacity utilization, with unrecoverable costs arising from underutilization of capacity expensed when incurred.

Depreciation and Amortization

     Our operations are capital intensive and we have significant investment in testing and packaging equipment. We depreciate our property, plant and equipment based on our estimate of the period that we expect to derive economic benefits from their use. Our estimates of economic useful lives are set based on historical experience, future expectations and the likelihood of technological obsolescence arising from changes in production techniques or in market demand for the use of our equipment and machinery. However, business conditions, underlying technology and customers’ requirements may change in the future which could cause a change in the useful lives. Any change in useful lives could have a significant effect on our future operating results.

     We believe that our principal competitors depreciate their packaging assets over periods of six to eight years.

Valuation of Property, Plant and Equipment

     We review property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management judgment is critical in assessing whether events have occurred that may impact the carrying value of property, plant and equipment.

     Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the future undiscounted net cash flows expected to be generated from the asset. If the carrying amount of the asset exceeds the future undiscounted net cash flows, such assets are considered to be impaired and an impairment charge is recognized for the amount that the carrying value of the asset exceeds its fair value. In determining the fair value of equipment and machinery, we consider offers to purchase such equipment and expected future discounted cash flows. Due to the nature of our business, which may include sudden changes in demand in the end markets, and due to the fact that certain equipment is dedicated to specific customers, we may not be able to anticipate declines in the utility of our equipment and machinery. Generally, we consider consecutive quarterly utilization rate declines or projected utilization deterioration as principal factors for our impairment review. Consequently, additional impairment charges may be necessary in the future and this could have a significant negative impact on our future operating results.

     In 2007, we recorded impairment charges of $1.7 million on the disposal of the packaging and test equipment related to discrete power packages to Mingxin. In 2008, we recorded equipment impairment charges of $21.1 million as a result of our Company’s ongoing assessment of property, plant and equipment for impairment. We did not record any equipment impairment charge in 2009.

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     See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Company —We may not be able to develop or access leading technology which may affect our ability to compete effectively.”

Deferred Tax Asset and Uncertain Income Tax Positions

     We record a deferred tax asset when we believe that it is more likely than not that the deferred tax asset will be realized. The deferred tax effects of the tax losses, unutilized capital allowances carried forward and temporary differences arising primarily from property, plant and equipment are recognized because they are expected to be offset against future taxable income.

     In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income based on our business plan and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the assessment will be made if it is more likely than not that the deferred tax assets will realized. The amount of the deferred tax asset considered realizable could be reduced in the near term if estimates of future taxable income during the carry forward period differ materially from current estimates. In the event that we are not able to realize the deferred tax assets, an adjustment to the deferred tax asset would be charged to income in the period such determination was made which would result in a reduction of our net income.

     We account for uncertainty in income taxes by prescribing a recognition threshold and measurement process for financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. We recognize liabilities for uncertain income tax positions based on our estimate of whether, and the extent to which, additional taxes will be required. We also report interest and penalties related to uncertain income tax positions as income taxes.

     For a discussion of significant items in deferred tax asset and uncertain tax positions, see Note 13, Income Taxes, of our consolidated financial statements included in “Item 18. Financial Statements.”

Valuation of Goodwill

     We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. We determine the fair value based on a weighting of income or market approaches, or combination of both. Under the income approach, we calculate the fair value of a reporting unit based on the present value of estimated future cash flows. Under the market approach, we estimate the fair value based on market multiples of revenue or earnings for comparable companies. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference.

     Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates.

     We performed an impairment review of the goodwill associated with the acquisition of ChipPAC, at the end of 2004, with the determination of fair value supplemented by independent appraisal and recorded an impairment charge of $453.0 million to our results of operations in 2004. In 2007, 2008 and 2009, we completed our annual test for impairment and determined that the fair value of the reporting units exceeds their carrying value, and therefore goodwill was not impaired.

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Contingencies

     We are subject to claims and litigations, which arise in the normal course of business. These claims and litigations may include allegations of infringement of intellectual property rights of others, disputes over tax assessments, environmental liability, labor, products, as well as other claims of liabilities.

     We assess the likelihood of an adverse judgment or outcome for these matters, as well as the range of potential losses. A determination of the reserves required, if any, is made after careful analysis. The required reserves may change in the future due to new developments impacting the probability of a loss, the estimate of such loss, and the probability of recovery of such loss from third parties.

Results of Operations

     The following table sets forth the composition of revenue by product group and test services as a percentage of net revenues:

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Net revenues
Packaging — laminate		56.3	%		56.5	%		57.9	%
Packaging — leaded		18.4			18.0			15.1
Test and other services		25.3			25.5			27.0
Total net revenues		100.0	%		100.0	%		100.0	%

     The following table sets forth certain data as a percentage of net revenues for the periods indicated:

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Net revenues		100.0	%		100.0	%		100.0	%
Gross profit		19.5			16.5			15.7
Selling, general and administrative		6.8			7.1			7.2
Research and development		2.1			2.3			3.3
Restructuring charges		0.1			1.2			1.2
Equipment impairment		—			1.2			—
Accelerated share-based compensation		—			0.1			—
Tender offer expenses		0.7			—			—
Held for sale asset impairment		0.1			—			—
Operating income		9.7			4.6			4.0
Other income (expense), net		(1.9	)		(1.6	)		(3.0	)
Income tax expense		(1.8	)		(1.1	)		(0.3	)
Net income attributable to the noncontrolling interest		(0.3	)		(0.3	)		(0.1	)
Net income attributable to STATS ChipPAC		5.7	%		1.6	%		0.6	%

Year Ended December 27, 2009 Compared to Year Ended December 28, 2008

Net Revenues

     We derive revenues primarily from packaging and testing of laminate and leaded packages. Net revenues were $1,325.7 million in 2009, a decrease of 20.0% compared to $1,658.2 million in 2008. The decrease in net revenues in 2009 compared to 2008 was primarily due to lower demand for our services as a result of the global economic downturn.

     In 2009, unit volumes of our total packaging were 14.6% lower compared to 2008. Average selling prices declined by 14.8% in 2009 due to product mix changes and price decreases. These resulted in a decrease in our packaging revenues in 2009 by 21.7% to

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$967.8 million, compared to $1,236.0 million in 2008. Revenues from test and other services in 2009 decreased 15.2% to $357.9 million, compared to $422.2 million in 2008.

     In 2009, revenue contribution from the communications market decreased 1.7% over 2008 to $663.8 million, and represented 50.1% of our revenues in 2009. Revenue contribution from consumer, multi-applications and other markets in 2009 increased 1.3% compared to 2008 to $437.5 million, and represented 33.0% of our revenues in 2009. Revenue contribution from the PC market in 2009 increased 0.3% to $224.4 million, over 2008, and represented 16.9% of our revenues in 2009. We expect to continue to depend on the communications, consumer and multi-applications, and PC markets for substantially all of our net revenues.

Gross Profit

     Gross profit in 2009 was $208.4 million, a decrease of $66.0 million compared to $274.4 million in 2008. Gross profit as a percentage of revenues was 15.7% in 2009, compared to 16.5% in 2008. In 2009, gross profit decreased primarily due to lower revenue, partially offset by a reduction in workforce, and mandatory facility shutdowns and vacations. Overall equipment utilization was approximately 52% in 2009 compared to 64% in 2008. Our cost of revenues consist principally of fixed costs such as depreciation and leasing expenses and variable costs such as direct and indirect labor, materials and overhead expenses. We continue to experience higher cost as a result of external global economic factors, such as higher substrate and gold prices which affected our cost of materials.

Selling, General and Administrative

     Selling, general and administrative expenses were $95.5 million in 2009, a decrease of 19.3% compared to $118.3 million in 2008. The decrease in selling, general and administrative expenses in 2009 was primarily due to a reduction in workforce, longer mandatory shutdowns and vacations, and our continued cost reduction exercise. The selling, general and administrative expenses for 2009 included a charge for litigation settlement. As a percentage of revenues, selling, general and administrative expenses were 7.2% in 2009 compared to 7.1% in 2008.

Research and Development

     Research and development expenses were $43.4 million in 2009 compared to $37.8 million in 2008. The increase in research and development expenses in 2009 was primarily due to an increase in research and development activities in advanced packaging, partially offset by a reduction in workforce, and longer mandatory shutdowns and vacations. As a percentage of revenues, research and development expenses were 3.3% in 2009, compared to 2.3% in 2008.

Restructuring Charges

     In 2009, we recorded severance and related charges of $16.1 million in connection with our restructuring plan involving the reduction of approximately 620 employees, representing approximately 5% of our global workforce.

     In 2008, we recorded restructuring charges of $19.8 million in 2008. The restructuring charges in 2008 consisted of severance and related charges of $6.0 million in connection with our reduction of our workforce by 335 employees in the nine months ended September 28, 2008 and a further severance and related charges of $13.8 million in connection with our restructuring plan involving the reduction of approximately 1,600 employees, representing approximately 12% of our global workforce, which we announced in December 2008.

     We implemented the restructuring plan to reduce our operating costs in response to the severe operating environment during those periods and to realign our organization’s structure and efficiency.

Equipment Impairment

     In 2008, we recorded an impairment charge of $21.1 million as a result of our ongoing assessment of property, plant and equipment for impairment. The $21.1 million equipment impairment was taken because continued softness in demand in the end-markets to which certain of our equipment was dedicated had reduced anticipated future usage of such equipment. We did not record any equipment impairment charge in 2009.

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Accelerated Share-based Compensation

     No accelerated share-based compensation expense was incurred in 2009. The STATS ChipPAC Ltd. Performance Share Plan compensation expense was terminated in 2008. As a result, we recorded $1.6 million of accelerated share-based compensation expense in 2008.

Net Interest Income (Expense)

     Net interest expense was $28.9 million in 2009, compared to $30.3 million in 2008. Interest income was $2.2 million in 2009, compared to $5.7 million in 2008. The decrease in interest income in 2009 was primarily due to lower interest rates in 2009 compared to 2008.

     Interest expense was $31.1 million in 2009, compared to $36.0 million in 2008. The decrease in interest expense was primarily due to our repurchase and redemption of our zero coupon Convertibles Notes due 2008, the conversion of $134.5 million aggregate principal amount of our 2.5% Convertible Subordinated Notes due 2008 into ordinary shares by Temasek, through its wholly-owned subsidiary, STSPL, in May 2008, the repayment of $30.0 million of our 6.0% promissory notes to LSI in October 2008 and 2009, and the repurchase of $2.0 million of our 6.75% Senior Notes due 2011 in March 2009. Total outstanding interest-bearing debt was $458.0 million and $473.5 million as of December 27, 2009 and December 29, 2008, respectively.

Foreign Currency Exchange Gain (Loss)

     Net foreign currency exchange loss was $6.5 million in 2009, compared to net foreign currency exchange gain of $5.2 million in 2008. These non-cash gains and losses were due primarily to the fluctuations during 2009 compared to 2008, respectively, between the exchange rate of the U.S. dollar and the South Korean Won, the Singapore dollar, the Malaysian Ringgit, the Chinese Renminbi and the Thai Baht.

Other Non-Operating Income (Expense), Net

     Net other non-operating expense was $2.0 million in 2009, compared to net other non-operating income of $0.03 million in 2008. The non-operating expense in 2009 was primarily due to the expenses related to our aborted capital reduction and debt financing in 2008.

Income Tax Expense

     Our consolidated income tax expense was $3.7 million in 2009, compared to $19.2 million in 2008, based on the mix of tax rates and taxable income across the various jurisdictions in which we do business. Our primary tax jurisdictions are Singapore, South Korea, China, Malaysia, Taiwan, Thailand and the United States.

     The $3.7 million tax expense included tax benefit adjustments to the effective tax rate related to $0.4 million of liability for unrecognized tax benefits for uncertain tax positions for 2009, compared to tax expense adjustments of $8.6 million for 2008. The reduction in liability for unrecognized tax benefits for uncertain tax positions for 2009 includes a $3.1 million tax benefit following the completion and settlement of the South Korean NTS’ examination through a MAP in September 2009.

     We recognize interest and penalties related to the unrecognized tax benefit in income tax expense. As of December 27, 2009, we do not have any accrued interest and penalties.

Year Ended December 28, 2008 Compared to Year Ended December 30, 2007

Net Revenues

     Net revenues were $1,658.2 million in 2008, an increase of 0.4% compared to $1,651.6 million in 2007. The net revenues increase in 2008 was primarily due to increased packaging revenue from contribution from our factory in Pathumthani, Thailand, which we acquired in October 2007.

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     Our packaging revenues in 2008 increased 0.2% to $1,236.0 million, compared to 2007. Unit volumes of our total packaging in 2008 were 1.0% lower compared to 2007 and resulted in $12.5 million decrease in packaging revenues. Average selling prices per pin for packaging services in 2008 increased 1.2%, compared to 2007 due to favorable changes in product mix and contributed to an increase of $15.0 million in revenue. Revenues from test and other services in 2008 increased 1.0% to $422.2 million, compared to 2007.

     In 2008, revenue contribution from the communications market decreased 0.7% over 2007 to $858.5 million and represented 51.8% of our revenues in 2008, compared to 52.5% of our net revenues in 2007. Revenue contribution from consumer, multi-applications and other markets in 2008 decreased 0.4% to $524.3 million and represented 31.6% of our net revenues in 2008 compared to 32% of our net revenues in 2007. Revenue contribution from the PC market in 2008 increased 1.1% to $275.4 million and represented 16.6% of our net revenues in 2008 compared to 15.5% of our net revenues in 2007. We expect to continue to depend on the communications, consumer and multi-applications, and PC markets for substantially all of our net revenues.

Gross Profit

     Gross profit in 2008 was $274.4 million, a decrease of $46.9 million compared to $321.3 million in 2007. Gross profit as a percentage of net revenues was 16.5% in 2008, compared to 19.5% in 2007. In 2008, gross margin decreased primarily due to lower equipment utilization and higher material cost. Overall equipment utilization was approximately 64% in 2008 compared to approximately 75% in 2007. Gross profit in 2008 included share-based compensation expense of $0.9 million in 2008 compared to $4.8 million in 2007, which reduced the gross margin by 0.1% in 2008. We experienced higher cost in 2008 compared to 2007 as a result of external global economic factors, such as higher substrate, gold and oil prices which affected our cost of materials, and the adverse effect of the strengthening of the Singapore dollar, Chinese Renminbi and Malaysian Ringgit against the U.S. dollar, particularly in the nine months ended September 28, 2008.

Selling, General and Administrative

     Selling, general and administrative expenses were $118.3 million in 2008, an increase of 5.1% compared to $112.6 million in 2007. As a percentage of net revenues, selling, general and administrative expenses was 7.1% in 2008 compared to 6.8% in 2007. The increase in selling, general and administrative expenses in 2008 was primarily due to our acquisition of our factory in Pathumthani, Thailand in October 2007 and the Asian currencies appreciation against the U.S. dollar, particularly in the nine months ended September 28, 2008, partially offset by lower share-based compensation expense. In 2008, share-based compensation expense under SFAS 123(R) was $0.9 million, compared to $3.1 million in 2007.

Research and Development

     Research and development expenses were $37.8 million in 2008, an increase of $2.9 million, compared to $34.9 million in 2007. Research and development expenses increased primarily due to the establishment of a facility for the research and development of advanced wafer integration technology in May 2007. As a percentage of net revenues, research and development expenses were 2.3% in 2008, compared to 2.1% in 2007.

Restructuring Charges

     We recorded restructuring charges of $19.8 million in 2008, compared to $1.0 million in 2007. The restructuring expenses in 2008 consisted of severance and related charges of $6.0 million in connection with our reduction of our workforce by 335 employees in the nine months ended September 28, 2008 and a further severance and related charges of $13.8 million in connection with our restructuring plan involving the reduction of approximately 1,600 employees, representing approximately 12% of our global workforce, which we announced in December 2008. We implemented the restructuring plan to aggressively reduce our operating costs in response to the severe operating environment. The workforce reduction was completed in the first quarter of 2009.

     In 2007, certain restructuring plans were executed to reduce operating costs to better align our expenses with revenues, which resulted in a total reduction in workforce of 143 employees, related to the restructuring. Severance and related charges of $1.0 million were incurred and expensed in 2007.

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Equipment Impairment

     In 2008, we recorded an impairment charge of $21.1 million as a result of our ongoing assessment of property, plant and equipment for impairment. The $21.1 million equipment impairment was taken because continued softness in demand in the end-markets to which certain of our equipment was dedicated had reduced the anticipated future usage of such equipment.

     We did not recorded any impairment charge in 2007 from our ongoing assessment of property, plant and equipment in connection with demand and anticipated future usage.

Accelerated Share-based Compensation

     The STATS ChipPAC Ltd. Performance Share Plan was terminated in 2008. As a result, we recorded $1.6 million of accelerated share-based compensation expense in 2008. No accelerated share-based compensation expense was incurred in 2007.

Tender Offer Expenses

     In 2007, we incurred $10.9 million, consisting of investment banking, legal, accounting, insurance, printing and other costs associated with the tender offer from STSPL, a wholly-owned subsidiary of Temasek. No tender offer expenses were incurred in 2008.

Held for Sale Asset Impairment

     In 2007, we recorded a $1.7 million held for sale asset impairment loss on the sale of our packaging and test assets related to our discrete power business. No held for sale asset impairment was made in 2008.

Net Interest Income (Expense)

     Net interest expense was $30.3 million in 2008, compared to $33.2 million in 2007. Interest income was $5.7 million in 2008, compared to $7.3 million in 2007. The decrease in interest income in 2008 was primarily due to lower interest rates, partially offset by higher cash balances in 2008 compared to 2007.

     Interest expense was $36.0 million in 2008, compared to $40.5 million in 2007. The decrease in interest expense was primarily due to our redemption of $115.0 million aggregate principal amount of our zero coupon notes from November 2007 through June 2008, the conversion of $134.5 million aggregate principal amount of our 2.5% convertible notes into ordinary shares by Temasek, through its wholly-owned subsidiary, STSPL, and decreases in short-term and long-term debts in Thailand, Taiwan and South Korea, in the aggregate of $191.1 million. Total outstanding interest-bearing debt was $473.5 million and $664.6 million as of December 28, 2008 and December 30, 2007, respectively.

Foreign Currency Exchange Gain (Loss)

     Net foreign currency exchange gain was $5.2 million in 2008, compared to $2.5 million in 2007. These cash and non-cash gains were due primarily to the fluctuations in 2008 compared to the same periods in 2007 between the exchange rates of the U.S. dollar and the Singapore dollar, the South Korean Won, the Chinese Renminbi and the Thai Baht.

Other Non-Operating Income (Expense), Net

     Net other non-operating income was $0.03 million in 2008 compared to net other non-operating expense of $0.4 million in 2007.

Income Tax Expense

     We record a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. In the event that deferred tax asset would be realizable in the future in excess of the net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination is made. In 2008, we increased valuation allowance on our deferred

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tax assets by $25.4 million. Our consolidated income tax expense was $19.2 million in 2008, compared to $29.6 million in 2007 based on the mix of tax rates and taxable income across the various jurisdictions in which we do business. Our primary tax jurisdictions are Singapore, South Korea, China, Malaysia, Taiwan, Thailand and the United States.

Quarterly Results

     The following table sets forth our unaudited results of operations, including as a percentage of net revenues, for the eight fiscal quarters ended December 27, 2009. We believe that all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the selected quarterly information when read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. Our results of operations have varied and may continue to vary significantly from quarter to quarter and are not necessarily indicative of the results of any future periods.

	Fiscal Quarter Ended
	March 30,			June 29,			September 28,			December 28,			March 29,			June 28,			September 27,			December 27,
	2008			2008			2008			2008			2009			2009			2009			2009
	(In thousands)
Net revenues	$	427,242		$	434,142		$	472,191		$	324,613		$	220,493		$	320,690		$	389,768		$	394,734
Cost of revenues		(352,704	)		(359,452	)		(384,829	)		(286,812	)		(222,663	)		(272,289	)		(311,161	)		(311,195	)
Gross profit (loss)		74,538			74,690			87,362			37,801			(2,170	)		48,401			78,607			83,539
Operating expenses:
Selling, general and administrative		31,466			28,616			29,296			28,959			20,607			23,506			26,714			24,689
Research and development		10,005			9,279			10,100			8,441			7,625			9,771			12,044			13,918
Restructuring charges		900			—			5,130			13,760			12,933			—			3,139			—
Equipment impairment		—			—			21,091			—			—			—			—			—
Accelerated share-based compensation		—			1,562			—			—			—			—			—			—
Total operating expenses		42,371			39,457			65,617			51,160			41,165			33,277			41,897			38,607
Operating income (loss)		32,167			35,233			21,745			(13,359	)		(43,335	)		15,124			36,710			44,932
Other income (expenses), net:
Interest income (expenses), net		(9,107	)		(7,574	)		(6,755	)		(6,865	)		(7,271	)		(7,338	)		(7,352	)		(6,926	)
Foreign currency exchange gain (loss)		3,208			2,053			(380	)		366			2,019			(4,997	)		(3,885	)		394
Equity income (loss) from investment in equity investee		(136	)		125			(392	)		(1,034	)		(980	)		(278	)		(84	)		21
Other non-operating income (expenses), net		728			578			187			(1,466	)		(2,401	)		81			231			73
Total other expenses, net		(5,307	)		(4,818	)		(7,340	)		(8,999	)		(8,633	)		(12,532	)		(11,090	)		(6,438	)
Income (loss) before income taxes		26,860			30,415			14,405			(22,358	)		(51,968	)		2,592			25,620			38,494
Income tax benefit (expense)		(7,620	)		(7,009	)		(4,921	)		378			(420	)		(362	)		315			(3,245	)
Net income (loss)		19,240			23,406			9,484			(21,980	)		(52,388	)		2,230			25,935			35,249
Net (income) loss attributable to the noncontrolling interest		(1,387	)		(1,290	)		(1,602	)		(169	)		1,321			(7	)		(873	)		(1,414	)
Net income (loss) attributable to STATS ChipPAC Ltd.	$	17,853		$	22,116		$	7,882		$	(22,149	)	$	(51,067	)	$	2,223		$	25,062		$	33,835

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	Fiscal Quarter Ended
	(As a Percentage of Net Revenues)
	March 30,			June 29,			September 28,			December 28,			March 29,			June 28,			September 27,			December 27,
	2008			2008			2008			2008			2009			2009			2009			2009
Net revenues		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Cost of revenues		(82.6	)		(82.8	)		(81.5	)		(88.4	)		(101.0	)		(84.9	)		(79.8	)		(78.8	)
Gross profit (loss)		17.4			17.2			18.5			11.6			(1.0	)		15.1			20.2			21.2
Operating expenses:
Selling, general and administrative		7.4			6.6			6.2			8.9			9.3			7.3			6.9			6.3
Research and development		2.3			2.1			2.1			2.6			3.5			3.1			3.1			3.5
Restructuring charges		0.2			—			1.1			4.2			5.9			—			0.8			—
Equipment impairment		—			—			4.5			—			—			—			—			—
Accelerated share-based compensation		—			0.4			—			—			—			—			—			—
Total operating expenses		9.9			9.1			13.9			15.7			18.7			10.4			10.8			9.8
Operating income (loss)		7.5			8.1			4.6			(4.1	)		(19.7	)		4.7			9.4			11.4
Other income (expenses), net:
Interest income (expenses), net		(2.1	)		(1.7	)		(1.4	)		(2.1	)		(3.3	)		(2.3	)		(1.9	)		(1.8	)
Foreign currency exchange gain (loss)		0.8			0.5			(0.1	)		0.1			0.9			(1.5	)		(1.0	)		0.1
Equity income (loss) from investment in equity investee		(0.0	)		0.0			(0.1	)		(0.3	)		(0.4	)		(0.1	)		0.0			0.0
Other non-operating income (expenses), net		0.2			0.1			0.0			(0.5	)		(1.1	)		0.0			0.1			0.0
Total other income (expenses), net		(1.1	)		(1.1	)		(1.6	)		(2.8	)		(3.9	)		(3.9	)		(2.8	)		(1.7	)
Income before income taxes		6.4			7.0			3.0			(6.9	)		(23.6	)		0.8			6.6			9.7
Income tax expense		(1.8	)		(1.6	)		(1.0	)		0.1			(0.2	)		(0.1	)		0.1			(0.8	)
Net income (loss)		4.6			5.4			2.0			(6.8	)		(23.8	)		0.7			6.7			8.9
Net (income) loss attributable to the noncontrolling interest		(0.3	)		(0.3	)		(0.3	)		(0.1	)		0.6			0.0			(0.2	)		(0.4	)
Net income (loss) attributable to STATS ChipPAC Ltd.		4.3	%		5.1	%		1.7	%		(6.9	)%		(23.2	)%		0.7	%		6.5	%		8.5	%

Liquidity and Capital Resources

     Our principal source of liquidity consists of cash flows from operating activities, bank facilities, debt financing, and our existing cash and cash equivalents and marketable securities. As of December 27, 2009, we had cash, cash equivalents and marketable securities of $368.1 million. We also have available lines of credit and banking facilities consisting of loans, overdrafts, letters of credit and bank guarantees, including those available to our consolidated subsidiaries, which amounted to an aggregate of $174.5 million, of which $91.5 million was utilized as of December 27, 2009. Our liquidity needs arise primarily from servicing our outstanding debts, working capital needs and the funding of capital expenditures and investments. Our debt service repayment obligations for 2010 include our obligation to redeem the outstanding $150.0 million aggregate principal amount of our 7.5% senior notes due in July 2010. Our capital expenditures are largely driven by the demand for our services, primarily to increase our packaging and testing capacity, to replace packaging and testing equipment from time to time, and to expand our facilities and service offerings. Depending on business conditions, we expect our capital expenditures to be approximately $200 million in 2010. We spent $159.2 million on capital expenditures in 2009, compared to $239.0 million in 2008. Our capital expenditure in 2009 was lower than 2008 due to lower demand for our services as a result of the global economic downturn.

     In September 2009, STATS ChipPAC Korea Ltd. obtained a short term loan facility from DBS Bank Ltd with a credit limit of $25.0 million. No drawdown has been made from this facility as of December 27, 2009.

     In June 2009, STATS ChipPAC Shanghai Co., Ltd. obtained a short term loan facility from Bank of Communications Co., Ltd. with a credit limit of $15.0 million. As of December 27, 2009, $6.0 million was outstanding.

     In March 2009, we repurchased $2.0 million aggregate principal amount of our $215.0 million 6.75% Senior Notes due 2011 for $1.7 million (excluding interest). We financed the repurchase of these senior notes with our existing cash on hand. We have deposited

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the repurchased $2.0 million principal amount of senior notes with a banking institution to hold in custody and accordingly, those senior notes have thereupon ceased to be outstanding or to accrue interest in our financial statements.

     In May 2008, Temasek, through its wholly-owned subsidiary, STSPL, converted its holding of all of the outstanding $134.5 million principal amount of our 2.5% convertible notes into 145.1 million of our ordinary shares.

     In January 2008, we announced our intention to effect a proposed capital reduction to return surplus share capital in an amount of up to $813.0 million to our shareholders. At an extraordinary general meeting held on March 17, 2008, our shareholders approved the proposed capital reduction.

     Among other conditions, the proposed capital reduction was subject to and conditional upon us being able to obtain adequate debt financing to fund the cash distribution pursuant to the capital reduction and the repayment of certain of our outstanding debt on terms and conditions acceptable to us. The amount of the cash distribution would accordingly have been determined based on the proceeds of such debt financing made available to us. In furtherance of the proposed capital reduction, we commenced a cash tender offer and consent solicitation in respect of our senior notes in June 2008 but terminated it in August 2008 because the financing condition under the tender offer and consent solicitation was not satisfied.

     In February 2009, we announced that we would not proceed with the proposed capital reduction as previously approved at the March 2008 shareholders’ meeting as given the economic environment, we were not able to obtain debt financing to fund the proposed cash distribution and the repayment of certain outstanding debt on terms and conditions acceptable to us.

     In October 2007, we consummated the previously announced definitive agreement with LSI pursuant to which STATS ChipPAC (Thailand) Limited acquired LSI’s assembly and test operations in Thailand for an aggregate purchase price of approximately $100.0 million. We funded the initial payment of $50.0 million of the aggregate purchase consideration with our working capital, including our cash and cash equivalents, and issued a promissory note bearing interest of 6.0% per annum for the balance $46.8 million purchase price, after taking into account a contractual net-off of $3.2 million of receivables from LSI. The promissory note is payable over four annual installments of $20.0 million, $10.0 million, $10.0 million and $6.8 million commencing October 2, 2008. The first and second annual installment of $20.0 million and $10.0 million were paid to LSI in 2008 and 2009, respectively. As of December 27, 2009, the amount payable to LSI under the promissory note was $16.8 million.

     At the annual general meeting in April 2009, our shareholders approved the amendments to, and renewal of, our share purchase mandate, authorizing the repurchase of up to 55 million ordinary shares (2.5% of the issued ordinary shares in the capital of our Company as of the date of the annual general meeting). The approved amount for share repurchases under this shareholders’ mandate will terminate on the earlier of the date on which the next annual general meeting is held or required to be held or the date which the approval is revoked or varied. As of December 27, 2009, we have not repurchased any shares. We may use our available funds, draw down on our available lines of credit or seek additional financing or a combination of these to finance any repurchase of our ordinary shares. We do not intend to seek renewal of the shareholders’ mandate in our next annual general meeting to be held in April 2010.

     We believe that our cash on hand, existing credit facilities and anticipated cash flows from operations will be sufficient to meet our currently anticipated capital expenditure requirements, investment requirements, share repurchases, as well as debt service repayment obligations for 2010. Our debt service repayment obligations for 2010 include our obligation to redeem the outstanding $150.0 million aggregate principal amount of our 7.5% senior notes due in July 2010. We regularly evaluate our current and future financing needs and may take advantage of favorable market conditions to raise additional financing. We may also from time to time seek to refinance our outstanding debt, or retire or purchase our outstanding debt through cash purchases and/or exchanges for securities, in the open market purchases, privately negotiated transactions or otherwise. From time to time, we may make acquisitions of, or investments in, other companies and businesses that we believe could expand our business, augment our market coverage, enhance our technical capabilities or otherwise offer growth opportunities. Such additional financing, refinancing, repurchases, exchanges, acquisitions or investments, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

     Under the global market conditions as discussed above, there can be no assurance that our business activity would be maintained at the expected level to generate the anticipated cash flows from operations or that our credit facilities would be available or sufficient. If the current market conditions persist or further deteriorate, there can be no assurance that demand for our services will not be adversely affected, resulting in our cash flows from operations being lower than anticipated. If our cash flows from operations is lower than anticipated, including as a result of the ongoing downturn in the market conditions generally or the semiconductor industry or

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otherwise, or our capital requirements exceed our expectations as a result of higher than anticipated growth in the semiconductor industry, acquisition or investment opportunities, or the expansion of our business or otherwise, we may have to seek additional financing. In such events, there can be no assurance that additional financing will be available or, if available, that such financings can be obtained on terms favorable to us or that any additional financing will not be dilutive to our shareholders or detrimental to our creditors.

Total Borrowings

     As of December 27, 2009, our total debt outstanding consisted of $458.0 million of borrowings, which included $150.0 million of our 7.5% Senior Notes due 2010, $213.0 million of our 6.75% Senior Notes due 2011, and other long-term and short-term borrowings.

     In September 2009, STATS ChipPAC Korea Ltd. obtained a $25.0 million short term loan facility with DBS Bank Ltd. No draw down has been made from this facility as of December 27, 2009.

     In June 2009, STATS ChipPAC Shanghai Co., Ltd. obtained a short term loan facility from Bank of Communications Co., Ltd. with a credit limit of $15.0 million. As of December 27, 2009, $6.0 million of loan under this credit facility was outstanding over two loan tranches of $3.0 million each. The principal of the two loan tranches of $3.0 million each is payable at maturity in June 2010. Interest on the two loan tranches of $3.0 million each is payable on a quarterly basis. These two tranches bear interest at the rate of 3.4% per annum and 2.5% per annum, respectively.

     In March 2009, we repurchased $2.0 million aggregate principal amount of our 6.75% Senior Notes due 2011 for $1.7 million (excluding interest). We financed the repurchase of these senior notes with our existing cash on hand. As a result, we recognized a gain on repurchase of senior notes of $0.3 million in the first quarter of 2009.

     In May 2008, Temasek, through its wholly-owned subsidiary, STSPL, converted its holding of all of our outstanding $134.5 million principal amount of 2.5% Convertible Subordinated Notes due 2008 into 145.1 million ordinary shares of the Company.

     In January and February 2008, we repurchased $12.4 million and $2.5 million aggregate principal of our zero coupon Convertible Notes for $14.7 million (including accrued yield-to-maturity interest) and $2.9 million (including accrued yield-to-maturity interest), respectively. We financed the repurchases with our cash and cash equivalents. In September 2008, we redeemed the remaining $3.7 million principal amount, representing 3.2% of the original principal amount, of our zero coupon Convertible Notes. We paid an aggregate consideration of $4.5 million (including accrued yield-to-maturity interest) and financed the redemption with cash in hand.

     In October 2007, we issued a promissory note carrying interest, payable annually, of 6.0% per annum to LSI in connection with the acquisition of an assembly and test operations in Thailand. The amount payable to LSI after contractual netting of certain receivables from LSI of $3.2 million amounted to $16.8 million as of December 27, 2009. The promissory note is payable in annual installments of $20.0 million, $10.0 million, $10.0 million and $6.8 million over four years commencing October 2, 2008. The first and second annual installment of $20.0 million and $10.0 million, were paid to LSI in 2008 and 2009, respectively. As of December 27, 2009, the amount payable to LSI under the promissory note was $16.8 million.

     STATS ChipPAC Korea Ltd. has a line of credit from Hana Bank with a credit limit of $25.0 million. In 2006, STATS ChipPAC Korea Ltd. borrowed $12.0 million under this facility to finance its purchase of a building and land in South Korea. In 2007, STATS ChipPAC Korea Ltd. borrowed an additional $3.6 million under this facility. The limit under these lines of credit was decreased to $6.6 million in February 2009. Interest was payable on a monthly basis. The principal on the $12.0 million loan was repayable over eight equal quarterly installments from September 2007 to June 2009. The principal on the $3.6 million loan was repayable at maturity in June 2009. In June 2009, STATS ChipPAC Korea Ltd. rolled forward the remaining principal amount outstanding under the $12.0 million loan and the $3.6 million loan, aggregating $5.1 million, as a loan under one facility with a credit limit of $5.1 million. The interest on this $5.1 million line of credit was payable on a monthly basis. The principal was repayable at maturity in June 2010 but STATS ChipPAC Korea Ltd. fully prepaid the loan in September 2009 and the facility was terminated.

     STATS ChipPAC Taiwan Semiconductor Corporation has a NT$3.6 billion floating rate New Taiwan dollar term loan facility (approximately $112.4 million based on exchange rate as of February 1, 2010) with a syndicate of lenders, with Taishin Bank as the sponsor bank. The loan draw downs must be made within 24 months from the date of first drawdown, which took place in February 2007. Upon expiry of the 24 months period in February 2009, this facility ceased to be available for further drawdown. As of December 27, 2009, STATS ChipPAC Taiwan Semiconductor Corporation has drawn down NT$0.7 billion (approximately $21.9

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million based on exchange rate as of February 1, 2010) under the term loan facility. The principal of and interest on the loan is payable in nine quarterly installments commencing February 2009 (being 24 months from first draw down date) with the first eight quarterly installments each repaying 11% of the principal and the last quarterly installment repaying 12% of the principal. In May 2009, STATS ChipPAC Taiwan Semiconductor Corporation refinanced the outstanding NT$0.6 billion (approximately $18.7 million based on exchange rate as of February 1, 2010) loan with new credit facilities of NT$873.0 million (approximately $27.3 million as of February 1, 2010) obtained from various bank and financial institutions. As of December 27, 2009, $19.3 million of loan under these credit facilities was outstanding. These credit facilities have varying interest rates ranging from 1.73% to 1.96% per annum and maturities ranging from May 2011 to May 2012. As of December 27, 2009, $4.6 million of loan under these credit facilities were classified as short-term liabilities due to the expectation of early repayment of certain of these credit facilities.

     Additionally, STATS ChipPAC Taiwan Semiconductor Corporation has a NT$0.3 billion (approximately $9.4 million as of February 1, 2010) credit facility from Mega Bank of which $2.9 million borrowings was outstanding as of December 27, 2009. This credit facility bears interest at the rate of 1.7% per annum and expires in August 2012. This loan is secured by a pledge of land and building with a combined net book value of $6.4 million as of December 27, 2009.

     We have a line of credit from Bank of America with a credit limit of $50.0 million, of which $50.0 million was outstanding as of December 27, 2009 over two loan tranches of $25.0 million each. The principal of and interest on the two loan tranches of $25.0 million each are payable at maturity in February 2010 and June 2010, respectively. These two loan tranches bear interest at the rate of 2.25% per annum and 1.83% per annum, respectively. We have the option to roll-forward the principal at maturity for a period of one, two, three, or six months. We rolled forward the loan tranche due to mature in February 2010 for a period of two months.

     At December 27, 2009, we had other undrawn banking and credit facilities consisting of loans, overdrafts, letters of credit and bank guarantees of $36.4 million with financial institutions.

Off-Balance Sheet Arrangements

     We have no significant investment in any unconsolidated entities. Our off-balance sheet commitments are limited to operating leases, royalty/license agreements, and purchase obligations. Our total off-balance sheet obligations were approximately $235.7 million as of December 27, 2009.

Contractual Obligations

     Our total commitments on our loans, operating leases, other obligations and other agreements as of December 27, 2009 were as follows. We had no capital lease obligations as of December 27, 2009.

	Payments Due
	Within						More Than
	1 Year		1-3 Years		3-5 Years		5 Years		Total
	(In thousands)
On balance sheet commitments:
7.5% senior notes due 2010 (1)	$	150,000	$	—	$	—	$	—	$	150,000
6.75% senior notes due 2011 (1)		—		213,000		—		—		213,000
6% promissory note (1)		10,000		6,800		—		—		16,800
Long-term loans (1)		8,786		13,381		—		—		22,167
Short-term loans (1)		56,000		—		—		—		56,000
Retirement benefits		521		1,346		1,678		6,126		9,671
Other non-current liabilities (2)		—		—		—		—		—
Total on balance sheet commitments	$	225,307	$	234,527	$	1,678	$	6,126	$	467,638
Off-balance sheet commitments:
Operating leases	$	17,006	$	20,125	$	14,329	$	18,591	$	70,051
Royalty/licensing agreements		9,429		18,314		17,464		157		45,364
Purchase obligations:
— Capital commitments		78,876		—		—		—		78,876
— Inventory purchase commitments		41,433		—		—		—		41,433
Total off-balance sheet commitments	$	146,744	$	38,439	$	31,793	$	18,748	$	235,724
Total commitments	$	372,051	$	272,966	$	33,471	$	24,874	$	703,362

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Notes:
(1)	Our senior notes, promissory note payable, short-term and long-term loans agreements contain provisions for the payment of interest either on a monthly, quarterly, semi-annual or annual basis at a stated rate of interest over the term of the debt. These payment obligations are not reflected in the table above. The interest payments due within one year, and 1-3 years amount to $27.4 million and $15.1 million, respectively.
(2)	Our other non-current liabilities as of December 27, 2009 were $59.3 million, including $9.2 million related to retirement and severance benefits for our employees in Malaysia and Thailand. Also included in the other non-current liabilities is $2.0 million related to severance benefits for our employees in South Korea which were not included in the table due to lack of contractual certainty as to the timing of payments.

Contingencies

     We are subject to claims and litigations, which arise in the normal course of business. These claims and litigations may include allegations of infringement of intellectual property rights of others, as well as other claims of liability. We accrue liability associated with these claims and litigations when they are probable and reasonably estimable.

     In February 2006, our Company, ChipPAC and STATS ChipPAC (BVI) Limited were named as defendants in the California Litigation. The plaintiff, Tessera, has asserted that semiconductor chip packaging, specifically devices having BGA and multi-chip BGA configurations used by the defendants infringe certain patents of Tessera. Tessera has further asserted that our Company is in breach of an existing license agreement entered into by Tessera with ChipPAC, which agreement has been assigned by ChipPAC to our Company.

     In May 2007, at Tessera’s request, the ITC instituted the First ITC Investigation of certain of our Company’s co-defendants in the California Litigation and other companies, including certain of our Company’s customers. In addition, in April 2007, Tessera instituted the Texas Action against certain of our Company’s co-defendants in the California Litigation and other companies. In the First ITC Investigation, the ITC issued a limited exclusion order in May 2009 preventing the named companies from importing certain packaged semiconductor chips and products containing them into the United States. The respondents in the First ITC Investigation appealed to the U.S. Court of Appeals for the Federal Circuit and the appeal is pending. The Texas Action seeks damages and injunctive relief against the named defendants. Both the First ITC Investigation and the Texas Action allege infringement of two of the same patents asserted by Tessera in the California Litigation, and may involve some of the same products packaged by our Company that are included in the California Litigation.

     In May 2008, the ITC instituted the Second ITC Investigation of our Company and other semiconductor package assembly service providers that are included in the California Litigation. In the Second ITC Investigation, Tessera sought an order to prevent the Respondents from providing packaging or assembly services for certain packaged semiconductor chips incorporating small format non-tape BGA semiconductor packages and products containing them, for importation into the United States. In addition, Tessera sought a general exclusion order excluding from importation all small format non-tape BGA semiconductor packages (and downstream products containing such packages), regardless of whether such packages are assembled by the Respondents. The Second ITC Investigation alleged infringement of three of the same patents asserted by Tessera in the California Litigation. Our Company responded to the complaint in June 2008. In February 2009, the Second ITC Investigation was stayed pending the outcome of the First ITC Investigation. In March 2009, Tessera moved to terminate the Second ITC Investigation. In August 2009, the ITC issued a final determination terminating the Second ITC Investigation.

     The district court in the California Litigation has vacated the trial schedule and stayed all proceedings pending a final resolution of the First ITC Investigation. The PTO has also instituted reexamination proceedings on all of the patents Tessera has asserted in the California Litigation and the Second ITC Investigation. It is not possible to predict the outcome of the California Litigation, the total costs of resolving the California Litigation, or when the stay in the California Litigation will be lifted; nor is it possible to predict the outcome of the First ITC Investigation or the Texas Action. It is also not possible to predict the outcome of the PTO proceedings or their impact on the California Litigation or the First ITC Investigation.

     We believe that we have a meritorious defense to these claims and intend to defend the lawsuit(s) vigorously. A court or ITC determination that our products or processes infringe the intellectual property rights of others could result in significant liability and/or

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require us to make material changes to our products and/or processes. Due to the inherent uncertainties of the lawsuit(s) and investigation(s), we cannot accurately predict the ultimate outcome and it could result in significant liability and/or injunction and could have a material adverse effect on the business, financial condition and the results of operations of our Company.

     We also, from time to time, receive from customers request for indemnification against pending or threatened infringement claims brought against such customers, such as the Tessera cases described above. The resolution of any future allegation or request for indemnification could have a material adverse effect on our business, financial condition and results of operations.

     On April 24, 2009, Freescale, a customer of our Company, notified us that, on April 21, 2009, it filed a complaint against our Company in the United States District Court for the Western District of Texas, claiming damages of approximately $7 million plus an unspecified amount of consequential damages, attorneys’ fees and costs in connection with an alleged breach of contract and other claims arising out of an alleged manufacturing defect in parts packaged for Freescale by our Company. Freescale demanded mediation of the claims, as required by its underlying contract with our Company.

     On August 7, 2009, we filed an answer to Freescale’s complaint as well as a counterclaim for various breaches of contract, claiming damages in excess of $1.56 million, in the United States District Court for the Western District of Texas. The parties reached an amicable settlement of the aforementioned claim by Freescale and our Company’s counterclaim in the third quarter of 2009. The associated legal settlement costs have been fully reserved and reflected in our financial statements for 2009.

     In addition, we are subject to various taxes in the different jurisdictions in which we operate. These include taxes on income, property, goods and services, and other taxes. We submit tax returns and claims with the appropriate government taxing authorities, which are subject to examination and agreement by those taxing authorities. We will regularly assess the likelihood of adverse outcomes resulting from these examinations to determine adequacy of provision for taxes.

     In connection with the merger with ChipPAC, we assumed certain contingent liabilities. In 2002, an assessment of approximately KRW16.0 billion ($13.7 million based on the exchange rate as of February 1, 2010) was made by the NTS relating to withholding tax not collected on the interest income on the loan between ChipPAC’s subsidiaries in South Korea and Hungary for the period from 1999 to September 2001. ChipPAC appealed the assessment through the NTS’s MAP. On July 18, 2002, the Icheon tax office of the NTS approved a suspension of the proposed assessment until resolution of the disputed assessment. The NTS required a corporate guarantee amounting to the tax assessment in exchange for the suspension. ChipPAC complied with the guarantee request on July 10, 2002. A further assessment of KRW2.7 billion ($2.3 million based on the exchange rate as of February 1, 2010) was made on January 9, 2004 for the interest from October 2001 to May 2002. ChipPAC engaged in a MAP and obtained suspension of the additional proposed assessment by providing a corporate guarantee in the amount of the additional assessment. In June 2007, the NTS extended the MAP. In the event that we were not successful with the appeal, the maximum amount that would have been payable under the tax assessments issued in 2002 and 2004 including potential interest and local surtax as of December 27, 2009 was estimated to be 37.4 billion South Korean Won (approximately $32.1 million based on the exchange rate as of February 1, 2010).

     On July 7, 2009, the NTS issued a notice on the termination of the MAP. Consequently, a revised tax assessment was issued to our subsidiary in South Korea for KRW 10.6 billion (approximately $9.1 million based on the exchange rate as of February 1, 2010). This revised tax assessment replaced the prior tax assessments issued in 2002 and 2004. The tax liability amounts from the revised tax assessment have been fully reserved as liability from uncertain tax positions in our financial statements. In the third quarter of 2009, we reduced our accrued liability related to the uncertain tax positions by $3.1 million following the termination of the MAP. We paid the tax liability amounts from the revised tax assessment between August and September 2009. The two corporate guarantees in the aggregate of KRW 18.7 billion (approximately $16.0 million based on the exchange rate as of February 1, 2010) previously provided by ChipPAC to the NTS were released in September 2009.

Cash Flows From Operating Activities

     In 2009, cash provided by operations was $174.9 million compared to $419.5 million in 2008. Cash provided by operations is calculated by adjusting our net (loss) income by non-cash related items such as depreciation and amortization, amortization of debt issuance cost, equipment impairment charges, loss or gain from sale of assets, accretion of discount on certain of our outstanding convertible notes, deferred income taxes, foreign currency exchange loss or gain, share-based compensation expense, net income attributable to noncontrolling interest, share of equity income and by changes in assets and liabilities. In 2009, non-cash related items included $268.3 million related to depreciation and amortization (including amortization of capitalized debt issuance costs), $1.7 million from deferred taxes, $1.3 million equity loss from equity investment, $1.2 million losses from the sale of equipment, $0.3

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million gains from repurchase of senior notes, $1.0 million from foreign currency exchange losses, $1.0 million from net gain attributable to the noncontrolling interest of one of our subsidiaries, and $0.5 million related to share-based compensation expense.

     Working capital uses of cash in 2009 included increases in accounts receivables, inventories and other receivables, prepaid expenses and other assets and decreases in accounts payable, accrued operating expense and other payables and amount due to affiliates. Working capital source of cash in 2009 included a decrease in the amount due from affiliates. Accounts receivables as of December 27, 2009 were higher compared to December 28, 2008 due to higher revenue. Additionally, accounts payables, accrued operating expenses and other payables increased as compared to December 28, 2008 primarily due to the timing of our purchases.

     In 2008, cash provided by operations was $419.5 million compared to $411.5 million in 2007. Cash provided by operations is calculated by adjusting our net income by non-cash related items such as depreciation and amortization, amortization of leasing prepayments, amortization of debt issuance cost, equipment impairment charges, loss or gain from sale of assets, impairment of assets, accretion of discount on certain of our outstanding convertible notes, deferred income taxes, foreign currency exchange loss or gain, share-based compensation expense, minority interest, share of equity income and by changes in assets and liabilities. In 2008, non-cash related items included $286.4 million related to depreciation and amortization (including amortization of capitalized debt issuance costs and leasing prepayments), $21.1 million of equipment impairment charges, $5.5 million from deferred taxes, $4.4 million from the non-controlling interest in income of one of our subsidiaries, $3.6 million related to share-based compensation expense, $1.6 million from foreign currency exchange gains, $1.4 million equity loss from equity investment, $1.1 million loss from the sale of equipment and $0.1 million from the accretion of discount on certain of our convertible notes.

     Working capital uses of cash in 2008 included decreases in accounts payables, accrued operating expense and other payables, and amount due to affiliates and increases in amount due from affiliates, and other receivables, prepaid expenses and other assets. Working capital source of cash in 2008 included decreases in accounts receivable and inventories. Inventories as of December 28, 2008 were lower as compared to December 30, 2007. Accounts receivables were lower compared to December 30, 2007 mainly due to faster collections. Additionally, accounts payables, accrued operating expenses and other payables increased as compared to December 30, 2007 primarily due to timing of our purchases.

Cash Flows From Investing Activities

     In 2009, cash used in investing activities was $164.5 million compared to $283.7 million, in 2008. The primary usage of cash in investing activities was related to the acquisition of property and equipment, net of changes in payables related to property, plant and equipment purchases of $140.8 million, in 2009 compared to $278.9 million in 2008. Our capital expenditure in 2009 was lower than 2008 due to lower demand for services as a result of the global economic downturn. In 2009, we received $0.6 million, compared to $19.1 million in 2008, of proceeds from sale of assets held for sale. In 2009, we invested $5.0 million, compared to $12.9 million in 2008, in the acquisition of software, licenses and other intangible assets. In 2009, we purchased marketable securities of $67.6 million, compared to $93.1 million in 2008. In 2009, we received proceeds from the sale and maturity of our marketable securities of $47.4 million compared to $79.9 million in 2008.

     In 2008, cash used in investing activities was $283.7 million compared to $299.1 million in 2007. The primary usage of cash in investing activities was related to the acquisition of property and equipment, net of changes in payables related to property, plant and equipment purchases, of $278.9 million in 2008 compared to $232.3 million in 2007. We increased our capital expenditure in 2008 compared to 2007 primarily to meet the demand from our customers and support growth strategy such as the new wafer bump line investment in the third quarter of 2008. In 2008, we received $19.1 million from the proceeds from sale of assets held for sale. In 2008 and 2007, we invested $12.9 million and $6.8 million, respectively, in the acquisition of software, licenses and other intangible assets. In 2008 and 2007, we purchased marketable securities of $93.1 million and $27.5 million, respectively. In 2008 and 2007, we received proceeds from the sale and maturity of our marketable securities of $79.9 million and $43.3 million, respectively.

Cash Flows From Financing Activities

     In 2009, cash used in financing activities was $17.5 million, compared to $53.5 million in 2008. In 2009, $29.8 million of borrowings were made and $43.7 million of our debt and borrowings were repaid. In 2008, $4.7 million of borrowings were made and $38.9 million of our debt and borrowings were repaid. In 2009, we repurchased $2.0 million aggregate principal amount of our $215.0 million 6.75% Senior Notes due 2011 (excluding interest) at an aggregate consideration of $1.7 million. In 2009, we did not issue any new ordinary shares through our share plans compared to $6.2 million in 2008.

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     In 2008, cash used in financing activities was $53.5 million compared to $70.5 million in 2007. In 2008, $4.7 million borrowings were made and $38.9 million of our borrowings and debts was repaid compared to $82.9 million and $177.1 million in 2007, respectively. In 2008, we repurchased $18.6 million aggregate principal amount of our zero coupon convertible notes (including accretion of discount on convertible notes and interest) at an aggregate consideration of $22.1 million. In 2007, we redeemed the remaining $31.5 million aggregate principal amount of our 1.75% convertible notes due 2007 (including interest) at an aggregate consideration of $36.8 million. We made $3.7 million of capital lease payments in 2007. In 2008 and 2007, we reduced our restricted cash by $0.6 million and increased our restricted cash by $0.6 million, respectively. In 2008 and 2007, we received $6.2 million and $19.9 million, respectively, from the issuance of new ordinary shares through our share plans. The total numbers of ordinary shares issued in 2008 and 2007 were 9.7 million and 27.8 million, respectively, which excluded the issuance of 145.1 million ordinary shares from the conversion of $134.5 million aggregate principal of our 2.5% convertible notes in May 2008.

Special Tax Status

     In February 2008, the Singapore Economic Development Board (“EDB”) offered us a new five-year tax incentive for our Singapore operations commencing July 1, 2007 whereby certain qualifying income will be subject to a concessionary tax rate of 5% instead of the Singapore statutory rate of 17% (18% prior to 2009), subject to the fulfillment of certain continuing conditions.

Derivative Financial Instruments

     We are exposed to fluctuations in currency exchange rates and interest rates. From time to time, we may employ derivative instruments such as forward foreign currency swaps, foreign forward contracts and options and interest rate swaps to mitigate the financial risks associated with certain anticipated cash flows, assets and liabilities.

     In 2008 and 2009, we entered into foreign currency forward contracts to protect us from fluctuations in exchange rates. As of December 28, 2008 and December 27, 2009, we had a series of foreign currency forward contracts with a total contract value of approximately $59.5 million and $121.6 million, respectively, of which all qualify as cash flow hedge accounting. The duration of these instruments are generally less than 12 months. As of December 27, 2009, we had realized and unrealized losses of $5.6 million and $2.2 million, respectively, on our foreign currency forward contracts qualifying as cash flow hedges. In 2009, we have included in earnings, loss on hedging instruments of $0.4 million due to unrecoverable hedging loss. Certain foreign currency forward contracts to economically hedge certain committed exposures are not designated as hedges. Accordingly, the changes in fair value of these foreign currency forward contracts are reported in earnings.

Foreign Currency Risk

     A portion of our costs is denominated in various foreign currencies, including the Singapore dollar, the South Korean Won, the Chinese Renminbi, the Malaysian Ringgit, Thai Baht, the New Taiwan dollar and the Japanese Yen. As a result, changes in the exchange rates of these currencies or any other applicable currencies to the U.S. dollar will affect our cost of goods sold and operating margins and could result in exchange losses. We cannot fully predict the impact of future exchange rate fluctuations on our profitability.

     Based on our overall currency rate exposure, we have adopted a foreign currency hedging policy for committed or forecasted currency exposures. These programs reduce, but do not always entirely eliminate, the impact of currency exchange movements. The goal of the hedging policy is to effectively manage risk associated with fluctuations in the value of the foreign currency, thereby making financial results more stable and predictable. However, we cannot assure you that any hedging policy we implement will be effective and we may experience reduced operating margins if such policy is unsuccessful.

Research and Development

     See “Item 4. Information on the Company — B. Business Overview — Research and Development.”

Recent Accounting Pronouncements

     In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”) (ASC No. 820), which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting

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pronouncements. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). SFAS 157 is effective for fiscal years beginning after November 15, 2007. We adopted SFAS 157 for financial assets and financial liabilities in 2008 and our adoption did not have a material impact on our consolidated financial position and results of operations. In February 2008, the FASB issued Staff Position No. 157-2 (“FSP 157-2”), which delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (annually). FSP 157-2 is effective for fiscal years beginning after November 15, 2008. We adopted FSP 157-2 at the beginning of the first quarter of 2009. Our adoption of SFAS 157 for nonfinancial assets and nonfinancial liabilities that are not measured and recorded at fair value on a recurring basis did not have a significant impact on our consolidated financial position and results of operations. In October 2008, the FASB issued Staff Position No. 157-3 (“FSP 157-3”) which clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of financial asset when the market for that financial asset is not active. FSP 157-3 is effective upon its issuance on October 10, 2008, including prior periods for which financial statements have not been issued. Our adoption of FSP 157-3 did not have an effect on our consolidated financial position and results of operations. See Note 24, Fair Value of Financial Instruments, of our consolidated financial statements included in “Item 18. Financial Statements” for fair value information of our financial assets and liabilities.

     In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”) (ASC No. 805), which replaces SFAS No. 141, “Business Combinations” (“SFAS141”). SFAS 141(R) retains the underlying concepts of SFAS 141 in that all business combinations are still required to be accounted for at fair value under the acquisition method of accounting but SFAS 141(R) changed the method of applying the acquisition method in a number of significant aspects. Acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. SFAS 141(R) is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. SFAS 141(R) amends SFAS No. 109, “Accounting for Income Taxes” such that adjustments made to valuation allowances on deferred taxes and acquired tax contingencies associated with acquisitions that closed prior to the effective date of SFAS 141(R) would also apply the provisions of SFAS 141(R). If such liabilities are settled for lesser amounts prior to the adoption of SFAS 141(R), the reversal of any remaining liability will affect goodwill. If such liabilities reverse subsequent to the adoption of SFAS 141(R), such reversals will affect the income tax provision in the period of reversal. Early adoption is not permitted. We adopted SFAS 141(R) at the beginning of the first quarter of 2009 and the adoption did not have a material impact on our financial statements; however, since we have acquired significant deferred tax assets for which valuation allowances were recorded at the acquisition date, SFAS 141(R) could significantly affect the results of operations if changes in the valuation allowances occur subsequent to adoption. See Note 13, Income Taxes, of our consolidated financial statements included in “Item 18. Financial Statements” for information on deferred tax valuation allowances.

     In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51” (“SFAS 160”) (ASC No. 810). SFAS 160 requires the recognition of a noncontrolling (minority) interest as equity in the consolidated financial statements and separate from the parent’s equity. The amount of net income attributable to the noncontrolling (minority) interest will be included in consolidated net income on the face of the income statement. It also amends certain of ARB No. 51’s consolidation procedures for consistency with the requirements of SFAS 141(R). This statement also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. SFAS 160 is effective for annual periods beginning after December 15, 2008 and should be applied prospectively. However, the presentation and disclosure requirements of the statement shall be applied retrospectively for all periods presented. Our adoption of SFAS 160 at the beginning of the first quarter of 2009 did not have a significant impact on our consolidated financial position and results of operations.

     In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of SFAS No. 133” (“SFAS 161”) (ASC No. 815), which is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Our adoption of SFAS 161 at the beginning of the first quarter of 2009 did not have a material impact on our consolidated financial statements.

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     In June 2009, the FASB confirmed that the FASB Accounting Standards Codification (the “Codification”) will become the single official source of authoritative U.S. GAAP (other than guidance issued by the SEC), superseding existing FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force (“EITF”), and related literature. After that date, only one level of authoritative U.S. GAAP will exist. All other literature will be considered non-authoritative. The Codification does not change U.S. GAAP; instead, it introduces a new structure that is organized in an easily accessible, user-friendly online research system. The Codification becomes effective for interim and annual periods ending on or after September 15, 2009. We applied the Codification beginning in the third quarter of 2009.

     In August 2009, the FASB issued Accounting Standard Update No. 2009-05 (“FASB ASU 2009-05”) “Fair Value Measurements and Disclosures (Topic 820) — Measuring Liabilities at Fair Value”. FASB ASU 2009-05 provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures - Overall, for the fair value measurement of liabilities. This update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: (1) a valuation technique that used: (a) the quoted price of the identical liability when traded as an asset; and/or (b) quoted prices for similar liabilities or similar liabilities when traded as assets; and/or (2) another valuation technique that is consistent with the principles of Topic 820. Two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendments in this update also clarify that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. Our adoption of FASB ASU 2009-05 in the third quarter of 2009 did not have a material impact on our consolidated financial position and results of operations. See Note 24, Fair Value of Financial Instruments, of our consolidated financial statements included in “Item 18. Financial Statements” for fair value information of our financial assets and liabilities.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

     The following table sets forth the name, age (as of February 1, 2010) and position of each director and member of senior management. The business address of our directors and senior management is our registered office in Singapore.

Name	Age	Position
Board of Directors
Charles R. Wofford(1)(2)(3)(4)	76	Chairman of our Board of Directors
Tan Lay Koon	51	Director, President and Chief Executive Officer
Peter Seah Lim Huat(5)(6)	63	Director
R. Douglas Norby(1)(5)(7)	74	Director
Teng Cheong Kwee(1)(6)(8)(9)	56	Director
Tokumasa Yasui(1)(9)	65	Director
Rohit Sipahimalani (8)(10)	43	Director
Senior Management
Wan Choong Hoe	56	Executive Vice President, Chief Operating Officer
Han Byung Joon	50	Executive Vice President, Chief Technology Officer
Hal Lasky	47	Executive Vice President, Chief Sales Officer
John Lau Tai Chong	50	Senior Vice President, Chief Financial Officer
Janet T. Taylor	52	Senior Vice President, General Counsel

Notes:
(1)	Determined by our Board of Directors to be independent for the purposes of the Singapore Code of Corporate Governance 2005.
(2)	Chairman of the Executive Committee.

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(3)	Chairman of the Executive Resource and Compensation Committee.
(4)	Chairman of the Nominating and Corporate Governance Committee.
(5)	Member of the Executive Resource and Compensation Committee.
(6)	Member of the Nominating and Corporate Governance Committee.
(7)	Chairman of the Audit Committee.
(8)	Member of the Executive Committee.
(9)	Member of the Audit Committee.
(10)	Appointed as a director on April 27, 2009.

     Our Board of Directors held four meetings in person in 2009. The average attendance by directors at Board of Directors meetings they were scheduled to attend was 100%.

     There are no arrangements or understandings with any person pursuant to which any of our directors or members of senior management were selected. There are no familial relationships among any of our directors, senior management or substantial shareholders. In January 2005, Mr. Peter Seah Lim Huat became a member of the Temasek advisory panel. Mr. Phoon Siew Heng, who served on our board from August 2007 to April 2009, was appointed Senior Managing Director, Strategy, of Temasek in November 2008. While employed by Temasek, director’s fees paid by us with regard to Mr. Phoon’s service on our board were paid directly to Temasek.

     Mr. Rohit Sipahimalani was appointed Managing Director, Investment at Temasek in November 2008. While employed by Temasek, director’s fees paid by us with regard to Mr. Sipahimalani’s service on our board are paid directly to Temasek.

Board of Directors

Charles R. Wofford

     Mr. Charles Richard Wofford has been a member of our Board of Directors since February 1998 and the Chairman of our Board of Directors since August 2002. Mr. Wofford was with Texas Instruments, Inc. for 33 years before leaving as Senior Vice-President to join Farr Company in 1991. He was the Chairman, Chief Executive Officer and President of Farr Company from 1992 to 1995 and Executive Vice Chairman of FSI International from 1996 to 1998. He received his Bachelor of Arts from Texas Western College.

Tan Lay Koon

     Mr. Tan Lay Koon has been our President and Chief Executive Officer and a member of our Board of Directors since June 2002. Mr. Tan joined us in May 2000 as our Chief Financial Officer and in August 2004, he led the formation of STATS ChipPAC with the acquisition of ChipPAC, Inc. and became our founding President and Chief Executive Officer. Prior to joining us, he was an investment banker with Salomon Smith Barney, the global investment banking unit of Citigroup Inc. Before that, he held various senior positions in government and financial institutions in Singapore. Mr. Tan graduated with a Bachelor of Engineering (First Class Honors) from the University of Adelaide, Australia as a Colombo Plan Scholar. He also has a Master of Business Administration (Distinction) from the Wharton School, University of Pennsylvania where he was elected a Palmer scholar.

Peter Seah Lim Huat

     Mr. Peter Seah Lim Huat has been a member of our Board of Directors since July 2002. He has also been a member of the Temasek Advisory Panel since January 1, 2005. He was, until December 31, 2004, the President and Chief Executive Officer of Singapore Technologies Pte. Ltd. and a member of its board of directors. He was a banker for 33 years before retiring as the Vice Chairman and Chief Executive Officer of Overseas Union Bank Limited in 2001. Mr. Seah is the Chairman of SembCorp Industries

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Ltd and Singapore Technologies Engineering Ltd and sits on the boards of several other companies, including CapitaLand Limited, StarHub Ltd, DBS Bank Ltd and DBS Group Holdings Ltd. His other appointments include serving as Chairman of the Singapore Health Services Pte Ltd, and board member of S. Rajaratnam School of International Studies and Defence Science and Technology Agency. Mr. Seah also serves on the board of the Government of Singapore Investment Corporation. He was awarded the Public Service Star (Bintang Bakti Masyarakat) in 1999. Mr. Seah graduated from the University of Singapore in 1968 with an honors degree in Business Administration.

R. Douglas Norby

     Mr. R. Douglas Norby has been a member of our Board of Directors since August 2004. Mr. Norby was a member of the board of directors of ChipPAC, Inc. prior to the merger. He was Senior Vice President and Chief Financial Officer of Tessera from July 2003 to January 2006. Mr. Norby worked as a consultant for Tessera from May to July 2003. Mr. Norby was Senior Vice President and Chief Financial Officer of Zambeel, Inc. from March 2002 to February 2003. From December 2000 to March 2002, Mr. Norby was Senior Vice President and Chief Financial Officer of Novalux, Inc., and from 1996 to 2000, he was Executive Vice President and Chief Financial Officer of LSI Logic Corporation. Mr. Norby is a director of Alexion Pharmaceuticals, Inc., Neterion, Inc., Nexx Systems, Inc. and Invensense, Inc., and serves as the Chairman of each of such companies’ audit committee. Mr. Norby also serves as a board advisor to Nanosolar, Inc., a private company. He received his Bachelor of Arts in Economics from Harvard University and Master of Business Administration from Harvard Business School.

Teng Cheong Kwee

     Mr. Teng Cheong Kwee has been a member of our Board of Directors since October 2006. He was previously a member of our Board of Directors from January 2001 to August 2004 and was appointed as a member and the Chairman of our Audit Committee in January 2001 and January 2003, respectively. Mr. Teng was the head of Risk Management & Regulatory Division of the Singapore Exchange Limited and has held various positions in regulatory and financial institutions including the Monetary Authority of Singapore. Mr. Teng has more than 20 years of experience in the finance industry. He is also a non-executive Director of several other companies listed on the SGX-ST. Mr. Teng received his Bachelor of Engineering (Industrial) (First Class Honors) and Bachelor of Commerce from the University of Newcastle in Australia.

Tokumasa Yasui

     Mr. Tokumasa Yasui has been a member of our Board of Directors since January 2007. Mr. Yasui was an Advisor and Special Advisor to the President of Renesas Solutions Corp., a subsidiary of Renesas Technology Corp., which is a joint venture between Hitachi Ltd. and Mitsubishi Ltd, from September 2007 to December 2008 and September 2006 to August 2007, respectively. Prior to that, he was a Managing Director of Renesas Semiconductor (Malaysia) Sdn. Bhd. He has also held various senior management positions with Hitachi Ltd. where he last served as Group Executive of the Semiconductor Division. He has also served as Executive Vice President of Elpida Memory, Inc. which started as a joint venture between Hitachi Ltd. and NEC Corp. Mr. Yasui holds a Bachelor of Engineering and a Master of Engineering in Electrical Engineering from Kyoto University.

Rohit Sipahimalani

     Mr. Rohit Sipahimalani has been a member of our Board of Directors since April 2009. He is currently a Managing Director, Investment at Temasek. Prior to joining Temasek in 2008, Mr. Sipahimalani was with Morgan Stanley for over 11 years, most recently serving as Managing Director, Head of South East Asia, Investment Banking. Mr. Sipahimalani joined Morgan Stanley in 1997 after spending three years with McKinsey & Co. Inc., where he was an Engagement Manager in their Mumbai office. Prior to that, he was at Citibank N.A. from 1989 to 1994. He received his Bachelor of Arts (Honors) in Economics from St. Stephen’s College, Delhi University and Masters of Business Administration from Indian Institute of Management, Ahmedabad, in India.

Senior Management

Wan Choong Hoe

     Mr. Wan Choong Hoe joined us as our Chief Operating Officer in September 2004. Mr. Wan was previously Vice President and Managing Director responsible for Singapore and China operations for National Semiconductor Manufacturer Singapore Pte. Ltd. (“National Semiconductor”), a position he held since 2000. From 1994 to 2000, Mr. Wan served as National Semiconductor’s Vice

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President and Managing Director responsible for Singapore, and previously held positions as Director of Operations and Director of QRA/Logistics. Prior to joining National Semiconductor in 1986, Mr. Wan held various positions at Texas Instruments Singapore Pte. Ltd., and from 1997 to 2001, served as Chairman of the Gintic Research Institute Management Board. Mr. Wan holds a Bachelor of Electrical and Electronics Engineering from the University of Singapore.

Han Byung Joon

     Dr. Han Byung Joon joined us as our Chief Technology Officer in December 1999. Prior to joining us, Dr. Han was Director of Product Development at Anam Semiconductor, Inc. and, prior to that, held various engineering positions with IBM Corporation (“IBM”) and AT&T Bell Labs in Murray Hill, New Jersey. He is credited with the invention of several wafer and chip-scale semiconductor packaging technologies which have been patented. Dr. Han received his Doctorate in Chemical Engineering from Columbia University, New York in 1988. Dr. Han attended the Harvard Business School’s Executive Advanced Management Program in 2008.

Hal Lasky

     Mr. Hal Lasky joined us as our Chief Sales Officer in March 2008. Prior to joining us, he spent 24 years at IBM where he held a number of key leadership positions, most recently as Vice President of Worldwide Semiconductor Sales for IBM’s Microelectronics group with responsibility for worldwide semiconductor revenue, sales strategy and strategic relationships with clients in the consumer, communications and information technology markets. Prior to that, he held various senior management positions in IBM’s Systems and Technology Group, Microelectronics Business Line and Interconnect Products Business Line. Mr. Lasky holds a Bachelor of Science degree in Ceramic Engineering from Rutgers University and a Master’s degree in Materials Science and Engineering from Columbia University. He is also a graduate of the IBM Client Executive Program at Harvard Business School.

John Lau Tai Chong

     Mr. John Lau Tai Chong joined us as our Chief Financial Officer in October 2007. Prior to joining us, he was Chief Financial Officer at Abacus International Pte Ltd with overall responsibility for spearheading strategic and financial planning, management and statutory reporting, controllership, tax planning, treasury and risk management, legal, mergers and acquisitions, strategic investments and strategic operations of Abacus International Pte Ltd and its subsidiaries. Prior to that, Mr. Lau was Vice President, Finance for Praxair Asia Inc. and held various senior management positions with Sembawang Corporation Ltd. Mr. Lau graduated with a Bachelor of Accountancy from National University of Singapore. He also holds a Master of Business Administration from Golden Gate University in San Francisco, California.

Janet T. Taylor

     Ms. Janet T. Taylor joined us as our General Counsel in June 2005. Prior to joining our Company, Ms. Taylor practiced as a Foreign Legal Consultant at the law firm of Kartini Muljadi & Rekan in Indonesia. Ms. Taylor was counsel in the U.S. Securities Practice Group of Sidley Austin Brown & Wood’s Singapore office from 2000 to 2002 and prior to that, a partner in the U.S. Securities Practice Group of Baker & McKenzie’s Singapore office. In 1999, she joined the U.S. Securities Practice Group of Norton Rose’s London office until she returned to Singapore in 2000. In 1993, she joined LeBoeuf, Lamb, Greene & MacRae’s New York office until 1996 when she joined Baker & McKenzie’s New York office and subsequently worked in Baker & McKenzie’s Singapore and London offices. Ms. Taylor began her legal career in 1989 at Debevoise & Plimpton in New York. Ms. Taylor was admitted to the New York Bar in 1990. She holds a Juris Doctor from Harvard Law School, a Bachelor of Arts (History) from the University of Texas and a Bachelor of Business Administration (Accounting) from Sam Houston State University.

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B. Compensation

Compensation of Directors and Senior Management

     The following table sets forth the aggregate amount of compensation, including bonus paid or proposed to be paid, for all of our non-executive directors with respect to services rendered in 2009.

	Non-executive
	Directors (1)			Total (2)
Charles R. Wofford	$	130,000		$	130,000
Peter Seah Lim Huat		44,000			44,000
R. Douglas Norby		67,000			67,000
Teng Cheong Kwee		55,000			55,000
Tokumasa Yasui		57,000			57,000
Phoon Siew Heng		13,670	(3)		13,670	(3)
Rohit Sipahimalani		29,330	(4)		29,330	(4)
Total	$	396,000		$	396,000

Notes:
(1)	We have sought advance approval, at our annual general meeting in April 2009, for the payment of directors’ fees of approximately $473,000 for 2009.
(2)	Does not include:

• $7,714 paid to Mr. Wofford for the settlement of restricted share units that vested in 2009;

• $5,786 paid to Mr. Seah for the settlement of restricted share units that vested in 2009;or

• $5,786 paid to Mr. Norby for the settlement of restricted share units that vested in 2009

	For more information on share options and restricted share units granted to our directors and senior management, see “— E. Share Ownership for Directors and Senior Management.”
(3)	Resigned as a director on April 27, 2009.
(4)	Appointed as a director on April 27, 2009. As Mr. Sipahimalani is employed by Temasek, his director’s fees are paid to Temasek.

The following tables set forth the aggregate annual compensation, categorized in bands of S$250,000, accruing and paid to our executive director, President and Chief Executive Officer and each of the top five key senior executive officers (who are not directors of our Company) for services rendered in 2009 and a breakdown in percentage terms of the fixed and variable components of such compensation. This presentation is consistent with the disclosure of compensation of senior executive officers required by the listing manual of the SGX-ST.

	Number of Executive Directors and Key Executives
Remuneration Bands	in Remuneration Bands
S$2,500,000 to S$2,749,999		1
S$2,250,000 to S$2,499,999		—
S$1,000,000 to S$1,249,999		2
S$750,000 to S$999,999		1
S$500,000 to S$749,999		2
S$250,000 to S$499,999		—
Below S$250,000		—

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	Fixed(%)(1)			Variable(%)(2)			Total
CEO and Executive Director
Tan Lay Koon		37	%		63	%		100	%
Key Executives
Han Byung Joon		60			40			100
Wan Choong Hoe		59			41			100
Hal Lasky		68			32			100
John Lau Tai Chong		70			30			100
Janet T. Taylor		77	%		23	%		100	%

Notes:
(1)	Fixed refers to base salary, annual wage supplement and fixed allowances (including any club membership, transportation and car allowances) earned for the year ended December 27, 2009. It excludes benefits such as leave and medical insurance schemes.
(2)	Variable refers to incentives paid and accrued for the year pursuant to our Company’s short term incentive plan (“STI”) and economic value added (“EVA”) scheme for the year ended December 27, 2009. STI is a scheme used to determine the annual performance bonuses payable to all employees of our Company. Under the EVA scheme, a notional EVA bank account will be set up for each key executives into which the annual EVA performance bonus earned by him each year is credited. One third of the total amount in his EVA bank account is payable annually at a later date in the following financial year, and the remaining balance in his EVA bank account will be payable to him upon his resignation or termination of employment (other than for cause) subject to certain condition being met. There have been no additional amounts allocated to the notional EVA bank accounts since 2006. It excludes share based compensation.

     We currently have seven directors on our Board. Our executive director does not receive any director’s fees. Our non-executive directors are paid directors’ fees except that for the directors employed by Temasek, their directors’ fees are paid to Temasek. Our non-executive directors are also reimbursed for reasonable expenses they incur in attending meetings of our Board of Directors and its committees and company-sponsored training from time to time. They may receive compensation for performing additional or special duties at the request of the Board. Our directors’ fees for 2009 had been approved by our shareholders at our annual general meeting in April 2009. We intend to seek advance approval, at our annual general meeting to be held in April 2010, for the payment of directors’ fees of approximately $467,000 for 2010.

     We provided to our directors and officers customary directors’ and officers’ liability insurance coverage in 2009. During 2009, none of the directors’ immediate family members were employees of our Company whose remuneration exceeded S$150,000 per annum.

     At our last annual general meeting of shareholders held in April 2009, we obtained shareholders’ approval for the renewal of the share repurchase program within specified mandates relating to maximum repurchase price, volume, timing and manner of repurchases. We intend to effect any such repurchases in compliance with Rule 10b-18 under the Exchange Act. The share repurchase program, among other things, allows us the flexibility to deliver repurchased ordinary shares held in treasury (instead of issuing new shares) for our employee share plans. We do not intend to seek shareholders’ approval for the renewal of the share repurchase program at our annual general meeting to be held in April 2010.

     Our overall compensation scheme continues to include a short-term (annual) cash incentive plan to reward our senior executives and other eligible employees for their performance and contributions. The short-term incentive plan is funded by a pool of monies that we set aside based on a predetermined aggregate percentage of payroll. Payment in 2010 with respect to services rendered in 2009 is dependant on the participant’s level of achievement measured against corporate financial targets, as well as plant and functional goals. Each participant has a bonus target measured as a percentage of base salary.

     In April 2009, our Company implemented a long-term equity grant plan for non-executive directors which was approved by the shareholders at our last annual general meeting. Under this plan, ordinary shares or cash may be awarded depending on our Company’s performance measured against specific targets over a period of time. See “— E. Share Ownership for Directors and Senior Management — STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors.”

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     Finally, Mr. Tan Lay Koon and a very limited group of the most senior executives are eligible to participate in a modified long-term cash incentive plan based on measuring EVA. EVA improvement year over year funds a group EVA pool. If the group EVA pool has a net positive balance in a given year, individual EVA bonuses would be distributed to eligible participants (one-third is paid directly to the participant and two-thirds is held in an individual EVA bank account for each participant).

     The amount of the group incentive EVA pool is derived from the annual wage increments of the participants and a sharing of the positive EVA and the change in EVA over the preceding year (which can result in a negative incentive pool if the change in EVA is significantly negative). The amount allocated to the individuals from this pool is based on the collective achievement of the corporate goals, achievement of individual performance targets and individual scoring on corporate values. Each eligible senior executive has his or her own notional EVA bank account. The bonus earned each year is added to his or her notional EVA bank account, and payment is made only when there was a positive EVA bank balance in the notional EVA bank account. Payments were made under this plan in 2006, 2007, 2008 and 2009. Payments may continue to be made under this incentive plan but there have been no additional amounts allocated to the notional EVA bank accounts since 2006.

Pension, Retirement or Similar Benefits

     We do not provide any post-retirement benefits other than those pursuant to the plans required or permitted by local regulations and described below.

     Under the Labor Standards Law of South Korea, employees with more than one year of service are entitled to receive a lump-sum payment upon termination of their employment with STATS ChipPAC Korea Ltd. based on their length of service and rate of pay at the time of termination. Accrued severance benefits are adjusted annually for all eligible employees based on their employment as of the balance sheet date. The expense for severance benefits for 2007, 2008 and 2009 was approximately $10.7 million, $8.2 million and $3.0 million, respectively. In accordance with the National Pension Act of South Korea, a certain portion of these severance benefits are deposited with the Korean National Pension Fund.

     Additionally, under the National Pension Act of South Korea, STATS ChipPAC Korea Ltd. is required to contribute a certain percentage for pension based on each employee’s salary to the Korean National Pension Fund. The expense for the pension benefits in 2007, 2008 and 2009 was approximately $3.3 million, $3.3 million and $2.1 million, respectively.

     Under Singapore law, we make monthly contributions based on the statutory funding requirement into a Central Provident Fund for substantially all of our Singapore employees who are Singapore citizens or Singapore permanent residents. The aggregate expenses under this plan were approximately $6.1 million, $6.9 million and $5.9 million in 2007, 2008 and 2009, respectively.

     Under Chinese law and Shanghai municipal government regulations, we make monthly contributions based on the statutory funding requirement into the Pension Fund Center and Provident Fund Center of Shanghai for all of our employees in China. In 2007, 2008 and 2009, the aggregate expenses under this plan were approximately $3.1 million, $3.4 million and $3.3 million, respectively.

     Under Malaysian law, we make monthly contributions based on statutory requirements to the Employee Provident Fund for all employees in Malaysia except for contract and foreign workers. STATS ChipPAC Malaysia Sdn. Bhd.’s total expenses under this plan in 2007, 2008 and 2009 were approximately $2.2 million, $2.2 million and $1.3 million, respectively. Each employee with more than 20 years of service with STATS ChipPAC Malaysia Sdn Bhd is entitled to a single sum payment of $3,012 upon his or her mandatory retirement from his or her employment at age 55 years. We paid approximately $84,500, $88,400 and $20,110 for such retirement payments in 2007, 2008 and 2009, respectively. Accrued gratuity benefits for eligible employees are adjusted annually.

     Under Thai law, we make monthly contributions based on the statutory funding requirement into the Employee Provident Fund for substantially all of our employees in Thailand. The aggregate expenses under this plan were approximately $153,000 in the period from October 2, 2007 (when we acquired LSI’s assembly and test operations in Thailand) to December 31, 2007, $632,000 in 2008 and $567,000 in 2009.

     Under the Labor Standards Law in Thailand, employees with more than 120 days of service are entitled to receive a lump sum payment upon retirement or involuntary termination of their employment with STATS ChipPAC (Thailand) Limited based on their length of service and latest salary at the time of retirement or involuntary termination. The expense for severance benefits in 2007, 2008 and 2009 was approximately $1.4 million, $0.7 million and $0.5 million, respectively.

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     ChipPAC and STATS ChipPAC Test Services, Inc. have a 401(k) savings plan where our Company matches 50% of employee contributions up to 6% of eligible employee compensation. Our matching contributions under the 401(k) plan were approximately $470,000, $471,000 and $261,000 in 2007, 2008 and 2009, respectively. The matching contributions are accrued monthly based upon actual employee contribution. The expenses relating to the plan are a minimum annual charge of $2,000 and $28 per person and are accrued on a monthly basis. Returns on the 401(k) plan from investments in mutual funds are calculated daily by an external administrator who administers the plan. Our Company’s matching contribution to the 401(k) savings plan was suspended in May 2009.

     Under Taiwanese law, STATS ChipPAC Taiwan Semiconductor Corporation and STATS ChipPAC Taiwan Co., Ltd. are required to make monthly contributions based on the statutory funding requirement for substantially all of the employees in Taiwan into the employee’s individual pension account overseen by the Bureau of Labor Insurance. In 2007, 2008 and 2009, the aggregate expenses under this plan for STATS ChipPAC Taiwan Semiconductor Corporation were approximately $334,000, $315,000 and $222,000, respectively, and for STATS ChipPAC Taiwan Co., Ltd. were approximately $141,000, $174,000 and $212,000, respectively.

     STATS ChipPAC Taiwan Semiconductor Corporation operates a defined benefit retirement plan for a substantial portion of its employees in Taiwan in accordance with the Labor Standards Law in Taiwan. Pension benefits are generally based on years of service and average salary for the six months prior to the approved retirement date. STATS ChipPAC Taiwan Semiconductor Corporation contributes 2% of eligible wages and salaries on a monthly basis to a pension fund maintained with the Central Trust of China, as required by the Labor Standards Law. At each year end, STATS ChipPAC Taiwan Semiconductor Corporation actuarially determines pension benefit costs and obligations using the projected unit credit method, and the amounts calculated depend on a variety of assumptions. These assumptions include discount rates, rates for expected returns on plan assets, mortality rates and retirement rates. The funding of the pension plan is determined in accordance with statutory funding requirements. STATS ChipPAC Taiwan Semiconductor Corporation is obligated to make up any shortfall in the plan’s assets in meeting the benefits accrued to the participating staff. As of December 27, 2009, there was no shortfall in the plan’s assets. Total pension plan expenses in 2007 and 2008 were approximately $7,000 and $19,000, respectively. There were no pension plan expenses in 2009.

C. Board Practices

Board of Directors

     Our Articles of Association set the minimum number of directors at two. We currently have seven directors. A number of our directors are re-elected at each annual general meeting of shareholders. The number of directors retiring and eligible to stand for re-election each year varies, but is generally equal to (but not less than) one-third of our Board of Directors, with the directors who have been in office longest since their last re-election or appointment standing for re-election. Our Articles of Association also provide that the Board of Directors has the power to appoint any person to be a director to fill a casual vacancy or as an additional director. These persons may only be directors until the next annual general meeting of shareholders but are eligible for re-election. Mr. Tan Lay Koon and Mr. Peter Seah Lim Huat are due for retirement by rotation at the next annual general meeting of shareholders to be held in April 2010 but are eligible for re-election. We intend to seek shareholders’ approval for their re-election at the annual general meeting in April 2010.

     Under the Companies Act, Chapter 50 of Singapore (“Companies Act”), the term of any director expires on the date of the annual general meeting of shareholders immediately following the date on which that director turns 70 years of age, although he or she is thereafter eligible for re-appointment. Directors who are aged 70 or older are eligible for re-appointment upon the approval of our shareholders by way of an ordinary resolution passed at an annual general meeting and, if re-appointed, will hold office until the next annual general meeting of the shareholders. Accordingly, the appointments of Mr. Charles R. Wofford and Mr. R. Douglas Norby will expire, and we intend to seek shareholders’ approval for their re-appointment, at the next annual general meeting of shareholders to be held in April 2010.

     As of February 1, 2010, Temasek, through its wholly-owned subsidiary STSPL, beneficially owned approximately 83.8% of our outstanding ordinary shares. Temasek, a private limited company incorporated in Singapore, is wholly-owned by the Minister for Finance (Incorporated) of Singapore, a body corporate constituted by the Minister for Finance (Incorporation) Act (Cap. 183). As a result, Temasek is able to exercise control over matters requiring the approval of our shareholders. The actions of Temasek and STSPL, particularly through the election of directors and subsequent selection of management by those directors, can affect our strategic decisions, our legal and capital structure and our day-to-day operations.

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     Our Articles of Association permit a director to appoint an alternate director to act in place of such director should the director be unable to perform his or her duties as director for a period of time. Under Singapore law, the alternate director is not merely an agent of the director but is also held accountable to us for his or her actions as director during the period for which he or she acts as alternate director.

     We do not have any service contracts with any of our non-executive directors. The service contract of our executive director does not provide for benefits upon termination of employment.

Committees of our Board of Directors

Audit Committee

     The Audit Committee currently consists of three members, all of whom are non-executive directors and determined by our Board of Directors to be independent under Rule 10A-3 under the Exchange Act and for purposes of the Singapore Code of Corporate Governance 2005. The current members of the Audit Committee are Mr. R. Douglas Norby (Chairman), Mr. Teng Cheong Kwee and Mr. Tokumasa Yasui.

     The Audit Committee serves as an independent and objective party to review the integrity and reliability of the financial information presented by management to shareholders, regulators and the general public. It oversees the establishment, documentation, maintenance and periodic evaluation of the system of our internal controls and is responsible for the appointment, compensation, independence, retention, termination and oversight of the work of our external auditors. The Audit Committee also reviews and evaluates the performance and policies of our internal audit function and the external auditors. Under Singapore law, only board members of a company may serve on its Audit Committee.

     All new related party transactions (as defined in Item 404 of Regulation S-K under the Securities Act) and certain transactions that constitute interested party transactions (as defined in the listing manual of the SGX-ST) under our Interested Party Transaction Policy require approval by the Audit Committee.

     The Audit Committee held six meetings in 2009.

Executive Resource and Compensation Committee

     The current members of the Executive Resource and Compensation Committee are Mr. Charles R. Wofford (Chairman), Mr. Peter Seah Lim Huat and Mr. R. Douglas Norby.

     The Executive Resource and Compensation Committee oversees the development of leadership and management talent in our Company, ensures that we have appropriate remuneration policies and designs competitive compensation packages with a focus on long-term sustainability of business and long-term shareholders’ return.

     The Executive Resource and Compensation Committee is comprised entirely of non-executive directors, the majority of whom, including the Chairman, have been determined by our Board of Directors to be independent directors under the Singapore Code of Corporate Governance 2005. Our Board of Directors has determined that Mr. Charles R. Wofford and Mr. R. Douglas Norby are independent directors under the Singapore Code of Corporate Governance 2005.

     The Executive Resource and Compensation Committee has the power to review, vary (if necessary) and approve the entire specific remuneration framework and specific packages for the key management executives of our Company that are at the job level of Executive Vice President and Senior Vice President and who report directly to the Chief Executive Officer as well as the plant managing directors (“Senior Management Executives”).

     The Executive Resource and Compensation Committee may delegate to the Chief Executive Officer the power to approve awards under the equity based plans to employees at the job level of Senior Vice President and below who do not report directly to the Chief Executive Officer.

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     Specifically, the duties and responsibilities of the Executive Resource and Compensation Committee include the following:

• consider, review, vary and approve our Company’s policy for determining executive remuneration including the remuneration policy with regard to Senior Management Executives;

• consider, review, vary (if necessary) and approve the entire specific remuneration framework and specific packages for each Senior Management Executive;

• review and make recommendations to the Board of Directors the design of any option plans, stock plans and other equity-based plans;

• review and make recommendations to the Board of Directors with regard to each award to the non-executive directors, the Chief Executive Officer and any other executive director and Senior Management Executives under each equity based plan;

• review and make recommendations to the Board of Directors with regard to each award as well as the total proposed awards under each equity based plan in accordance with the rules governing each such plan; and

• approve the remuneration framework for the Chief Executive Officer and our non-executive directors (including but not limited to directors’ fees).

     The Executive Resource and Compensation Committee held five meetings in 2009.

Executive Committee

     The Executive Committee currently consists of Mr. Charles R. Wofford (Chairman), Mr. Teng Cheong Kwee and Mr. Rohit Sipahimalani.

     The main objective of the Executive Committee is to enable our Board of Directors to delegate some of its powers and functions regarding the governing of our affairs and the affairs of our subsidiaries to the Executive Committee in order to facilitate timely decision-making processes within the limits of authority as determined by our Board of Directors. The Executive Committee also meets with our senior management to review our annual budget and financial performance.

     The Executive Committee held four meetings in 2009.

Nominating and Corporate Governance Committee

     The current members of the Nominating and Corporate Governance Committee are Mr. Charles R. Wofford (Chairman), Mr. Peter Seah Lim Huat and Mr. Teng Cheong Kwee. The Nominating and Corporate Governance Committee’s responsibilities include identifying suitable candidates for appointment to our Board, with a view to ensuring that the individuals comprising our Board of Directors can contribute in the relevant strategic areas of our business and are able to discharge their responsibilities as directors having regard to the law and high standards of governance.

     We adopt the following practices which are consistent with the Singapore Code of Corporate Governance 2005:

• The Nominating and Corporate Governance Committee comprises not less than three directors, the majority of whom, including the Chairman, have been determined by our Board of Directors to be independent directors under the Singapore Code of Corporate Governance 2005. Our Board of Directors has determined that Mr. Charles R. Wofford and Mr. Teng Cheong Kwee are independent directors under the Singapore Code of Corporate Governance 2005.

• The Nominating and Corporate Governance Committee’s duties and responsibilities include the following:

(i)	the identification of qualified candidates to become members of our Board of Directors;
(ii)	the selection of nominees for election as directors at the next annual meeting of shareholders (or extraordinary general meeting of shareholders at which directors are to be elected);

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(iii)	the selection of candidates to fill any vacancies on our Board of Directors;
(iv)	the development and recommendation to our Board of Directors of a set of corporate governance guidelines and principles applicable to our Company (being our Code of Business Conduct and Ethics); and
(v)	the oversight of the evaluation of our Board of Directors and its committees.

     The Nominating and Corporate Governance Committee held two meetings in 2009.

D. Employees

     As of February 1, 2010, we employed 10,429 full-time employees and 750 temporary or contract employees. The average number of temporary or contract employees in 2009 based on the number of temporary or contract employees at the end of each month was 604 per month.

     As of December 27, 2009, approximately 72% of our South Korean employees were represented by the STATS ChipPAC Korea Labor Union and are covered by a collective bargaining agreement and a wage agreement. The wage agreement is renewed every year. The collective bargaining agreement which, among other things, covers basic union activities, working conditions and welfare programs is renewed every other year. The wage agreement was renewed in April 2009 and is effective through March 2010. The collective bargaining agreement was renewed in May 2009 and is effective through April 2011.

     Management and the STATS ChipPAC Korea Labor Union have negotiations and meetings on a regular basis in order to discuss various issues and share concerns relating to the employees and the financial condition of STATS ChipPAC Korea. We believe that management has a good relationship with the STATS ChipPAC Korea Labor Union.

     The following table sets forth the number of our employees by function and location for the dates indicated:

	December 30,		December 28,		December 27,		February 1,
	2007		2008		2009		2010
Function:
Direct and indirect labor (manufacturing)		13,764		12,096		10,282		10,307
Indirect labor (administration)		809		669		598		575
Research and development		300		293		295		297
Total		14,873		13,058		11,175		11,179
Location:
Singapore		3,288		3,032		2,480		2,474
China		3,829		3,456		3,391		3,454
Malaysia		2,900		1,870		1,379		1,339
South Korea		2,698		2,618		2,043		2,016
Taiwan		590		580		576		573
Thailand		1,296		1,288		1,132		1,147
United States		252		199		159		161
Others		20		15		15		15
Total		14,873		13,058		11,175		11,179

E. Share Ownership for Directors and Senior Management

     Based on an aggregate of 2,202,218,293 ordinary shares outstanding as of February 1, 2010, each of our directors and senior management officers had a beneficial ownership of less than 1% of our outstanding ordinary shares, including ordinary shares held directly and share options granted as of such date.

     Beneficial ownership is determined in accordance with rules of the SEC and includes shares over which the indicated beneficial owner exercises voting and/or investment power or receives the economic benefit of ownership of such securities. Ordinary shares subject to options currently exercisable or exercisable within 60 days are deemed outstanding for computing the percentage ownership of the person holding the options but are not deemed outstanding for computing the percentage ownership of any other person.

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     All of our ordinary shares have identical rights in all respects and rank equally with one another.

Share Options for Directors

     The following table contains information pertaining to share options held by our directors as of February 1, 2010.

	Number of Ordinary Shares		Per Share Exercise
	Issuable on Exercise of Option		Price (S$)		Exercisable Period
Tan Lay Koon		700,000		2.826	10/19/2001 to 10/18/2010
		325,000		2.885	04/29/2003 to 04/28/2012
		2,000,000		2.2	06/26/2003 to 06/25/2012
		700,000		1.99	08/06/2004 to 08/05/2013
		500,000		1.91	02/17/2005 to 02/16/2014
Peter Seah Lim Huat		70,000		1.99	08/06/2004 to 08/05/2013
		35,000		1.91	02/17/2005 to 02/16/2014

STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors

     At our annual general meeting in April 2009, we obtained shareholders’ approval for the adoption of the STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors (the “NED Equity Grant Plan”). The purpose of the NED Equity Grant Plan is to give recognition to non-executive directors of our Company who have contributed to our Company.

     The NED Equity Grant Plan is administered by the Executive Resource and Compensation Committee of our Company. The Executive Resource and Compensation Committee may extend an offer to participate in the NED Equity Grant Plan to non-executive directors of our Company as the Executive Resource and Compensation Committee may select in its absolute discretion. Offers to participate have been extended to all of our current non-executive directors. An offer to participate in the NED Equity Grant Plan is generally not transferable.

     Subject to certain rules of the NED Equity Grant Plan including consequences arising from cessation of a directorship and change of control of our Company, the number of our ordinary shares deliverable under the NED Equity Grant Plan shall occur on or after December 31, 2011. The number of our ordinary shares to be issued to each participant of the NED Equity Grant Plan shall be determined by the Executive Resource and Compensation Committee and is subject to the achievement by our Company of the prescribed performance targets over the relevant performance period and any other criteria and considerations deemed appropriate by the Executive Resource and Compensation Committee.

     The maximum number of our ordinary shares which could be issued under the NED Equity Grant Plan on any date when added to the total number of new ordinary shares in the capital of our Company issued and issuable under the NED Equity Grant Plan, shall not exceed 0.45% of the total number of our outstanding ordinary shares

     No participant has been awarded shares under the NED Equity Grant Plan in 2009.

Employees’ Share Ownership Schemes

     In March 2008, we terminated the STATS ChipPAC Ltd. Restricted Share Plan (the “RSP”) and the STATS ChipPAC Ltd. Performance Share Plan (the “PSP”), which were adopted in April 2006, and the STATS ChipPAC Ltd. Employee Share Purchase Plan 2004 (the “ESPP”) which was adopted in August 2004. The STATS ChipPAC Share Option Plan, as amended, was phased out as of December 2006 and replaced by the RSP. Upon the termination of the PSP, we cancelled the 2,935,000 unvested performance share units, which resulted in a non-cash charge of $1.6 million of accelerated share-based compensation expense in 2008.

     In December 2007, consistent with our plans to terminate our ADR program, we amended our plans (where necessary) to eliminate the participants’ option to elect to receive ADSs in lieu of ordinary shares. We terminated our ADR program with effect from April 30, 2008.

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     At our annual general meeting in April 2009, we obtained shareholders’ approval for renewal of our share purchase mandate, authorizing the repurchase of up to 2.5% of the issued ordinary share capital as of the date of the annual general meeting, which allows us the flexibility to deliver repurchased ordinary shares held in treasury (instead of issuing new shares) under our equity incentive plans. The shareholders’ mandate will terminate on the earlier of the date on which the next annual general meeting is held or the date on which the approval is revoked or varied. As of December 27, 2009, we had not repurchased any shares. We do not intend to seek renewal of the shareholders’ mandate in our next annual general meeting to be held in April 2010.

STATS ChipPAC Ltd. Performance Share Plan 2009

     At our annual shareholders’ meeting in April 2009, we obtained shareholders’ approval for the adoption of the STATS ChipPAC Ltd. Performance Share Plan 2009 (the “PSP 2009”). The purpose of the PSP 2009 is to retain staff whose contributions are essential to the well-being and prosperity of our Company and to give recognition to senior employees and executive directors of our Company who have contributed to the growth of our Company.

     The PSP 2009 is administered by the Executive Resource and Compensation Committee of our Company. Up to 18 senior employees of our Company who meet the relevant age and rank criteria as designated by the Executive Resource and Compensation Committee from time to time, including the Chief Executive Officer of our Company and any other executive director of our Company, are eligible to participate in the PSP 2009 at the absolute discretion of the Executive Resource and Compensation Committee.

     Each performance share represents an unfunded and unsecured promise of our Company to issue or transfer ordinary shares of our Company with no exercise or purchase price. Contingent awards of performance shares are granted as the Executive Resource and Compensation Committee may, on the recommendation by the management of our Company, determine in its absolute discretion. Subject to certain rules of the PSP 2009 including consequences arising from termination of employment of a participant and change of control of our Company, vesting of the performance shares comprised in outstanding awards shall occur on December 31, 2011. Determination of the number of ordinary shares deliverable with respect to any performance share award is subject to the achievement by our Company of the prescribed performance targets set by the Executive Resource and Compensation Committee over the relevant performance period.

     The maximum permissible number of our ordinary shares which could be issued pursuant to awards granted under the PSP 2009 on any date when added to the total number of new ordinary shares in our capital issued and issuable pursuant to awards granted under the PSP 2009, shall not exceed 5.02% of the total number of our outstanding ordinary shares.

     Performance shares contingently awarded under the PSP 2009 are generally not transferable. A grantee of a contingent award of performance shares has no rights as a shareholder with respect to any ordinary shares covered by such contingent award of performance shares until such ordinary shares have been issued and delivered in accordance with the terms of the PSP 2009.

     Since the commencement of the PSP 2009 to the financial year ended December 27, 2009, contingent awards aggregating between 34,000,000 and 88,819,964 performance shares have been awarded under the PSP 2009, representing the corresponding number of ordinary shares to be delivered, if the performance targets set by the Executive Resource and Compensation Committee are achieved.

STATS ChipPAC Ltd. Restricted Share Plan

     We terminated, as of March 2008, the RSP which was adopted in April 2006. The purpose of the RSP was to replace the STATS ChipPAC Share Option Plan commencing 2007 and to offer selected individuals an opportunity to acquire a proprietary interest or to increase their interest in the success of our Company through the grant of Restricted Share Units (“RSUs”).

     The RSP was administered by the Executive Resource and Compensation Committee. Employees, directors and consultants were eligible to participant in the RSP.

     Each RSU represents an unfunded, unsecured promise of our Company to issue or transfer ordinary shares of our Company with no exercise or purchase price as the award vests in accordance with a schedule determined by the Executive Resource and Compensation Committee. RSUs were granted subject to performance conditions. Each RSU has a value equal to the fair market value of an ordinary share and the Executive Resource and Compensation Committee has the authority to settle RSUs in cash or ordinary

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shares. RSUs granted under the plan are generally not transferable. Unvested portions of RSUs are generally subject to forfeiture if employment terminates prior to vesting. A grantee of RSUs has no rights as a shareholder with respect to any ordinary shares covered by the grantee’s RSU award until such ordinary shares have been issued or transferred pursuant to the terms of such award.

     The number of ordinary shares that may be issued under the RSP may not exceed, in the aggregate, 50 million ordinary shares of our Company (subject to anti-dilution adjustments pursuant to the RSP).

     In 2007, we granted to our directors, officers and employees RSUs representing 6,976,754 ordinary shares in seven separate grants: two grants in February 2007 aggregating 6,711,754 RSUs; two grants in April 2007 aggregating 56,000 RSUs; two grants in May 2007 aggregating 56,000 RSUs; and one grant in October 2007 for 153,000 RSUs. One-third of the RSUs granted vest on the anniversary of the grant date over three years. All outstanding RSUs will vest in 2010.

     As of February 1, 2010, RSUs representing 1,572,789 ordinary shares were outstanding, out of which RSUs representing 23,000 ordinary shares were held by our directors and executive officers as a group.

     We intend to settle all future vested RSUs in cash. Unvested RSUs granted to resigned directors representing 65,940 ordinary shares were cancelled and RSUs granted to resigned employees representing 1,501,507 ordinary shares were cancelled.

STATS ChipPAC Ltd. Employee Share Purchase Plan 2004

     We terminated, as of March 2008, the ESPP which was adopted in August 2004. We adopted the ESPP to provide our employees the opportunity to purchase our ordinary shares in order to encourage broad employee ownership, encourage employees to remain in our employ, enhance the ability to attract new employees by providing an opportunity to acquire a vested interest in our success and provide a performance incentive to our employees.

     The ESPP had been administered by the Executive Resource and Compensation Committee. Employees of our Company and designated subsidiaries were eligible to participant in the ESPP.

     Prior to the amendments to the ESPP adopted in 2006, substantially all employees could purchase our Company’s ordinary shares at a price equal to 85% of the lower of the fair market value at the beginning or the end of specified six-month purchase periods. Share purchases were limited to 15% of an employee’s eligible compensation.

     In April 2006, changes to the terms of the ESPP were approved by the shareholders. We eliminated the provision that the purchase price of the shares to be purchased under the ESPP be determined by reference to the lower of the fair market value at the beginning or the end of the specified purchase period and instead provided that the purchase price be determined by reference to the fair market value of the shares based on the quoted market price on the date of the purchase or, if the shares are acquired through an open market purchase, the price actually paid for the shares. Further, instead of providing for a 15% discount on the purchase price, we may match up to 20% of the contributions of ESPP participants by transferring or issuing shares or providing cash contribution for the purchase of shares. As a result of these changes, the ESPP no longer qualifies under Section 423 of the United States Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

     In addition, in 2006, the maximum aggregate number of ordinary shares that may be issued under the ESPP was revised from 130 million ordinary shares to no more than 92 million ordinary shares of our Company (subject to anti-dilution adjustment pursuant to the ESPP). As of February 1, 2010, there were no outstanding employee share purchase rights under the ESPP.

STATS ChipPAC Ltd. Substitute Share Purchase and Option Plan (the “Substitute Option Plan”) and STATS ChipPAC Ltd. Substitute Equity Incentive Plan (the “Substitute EIP”, and together with the Substitute Option Plan, the “Substitute Plans”)

     In connection with the merger between STATS and ChipPAC, we adopted the Substitute Plans to enable substitute options to be granted to holders of options granted under the ChipPAC 1999 Stock Purchase and Option Plan and the ChipPAC 2000 Equity Incentive Plan. The number of our ordinary shares that may be issued under the Substitute Option Plan and the Substitute EIP, may not exceed, in the aggregate, approximately 7 million and 73 million ordinary shares, respectively.

     As of February 1, 2010, substitute options representing 896,089 ordinary shares were outstanding.

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STATS ChipPAC Share Option Plan, as amended

     Effective May 28, 1999, we adopted the ST Assembly Test Services Ltd Share Option Plan 1999 (the “STATS 1999 option plan”). The STATS 1999 option plan was amended from time to time to accomplish various varying objectives including, among other things, to comply with changes in applicable laws and to bring the plan in line with current market practices. Subsequently, the STATS 1999 option plan was re-named the STATS ChipPAC Share Option Plan. The STATS ChipPAC Share Option Plan, as amended, was phased out as of December 2006 and replaced by the RSP. Since December 2006, no options have been granted under the STATS ChipPAC Share Option Plan.

     The purpose of the STATS ChipPAC Share Option Plan was to offer selected individuals an opportunity to acquire or increase an ownership interest in our Company through the grant of options to purchase our ordinary shares. Options granted under the STATS ChipPAC Share Option Plan may be either nonqualified options or incentive stock options (“ISO”) intended to qualify under Section 422 of the Internal Revenue Code.

     The number of ordinary shares that may be issued under the STATS ChipPAC Share Option Plan may not exceed, in the aggregate, 198 million ordinary shares (subject to anti-dilution adjustments pursuant to the plan), including 80 million ordinary shares that may be issued under the Substitute Plans.

     The STATS ChipPAC Share Option Plan was administered by the Executive Resource and Compensation Committee. Subject to certain exceptions as provided in the plan, employees, directors and consultants are eligible for the grant of options.

     The exercise price of an ISO must not be less than 100% of the fair market value of our ordinary share on the date of grant. An individual who owns more than 10% of the total combined voting power of all classes of the outstanding shares of the Company or any of our subsidiaries is not eligible to be granted ISOs unless (i) the exercise price of the ISO is at least 110% of the fair market value of the ordinary shares on the date of the grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant.

     The options typically vest over a four-year period. The term of an option granted to an employee may not exceed seven years from the date of grant. The term of an option granted to a non-employee may not exceed five years from the date of the grant.

     As of February 1, 2010, options (under the STATS ChipPAC Share Option Plan and the Substitute Plans combined) to purchase an aggregate of 12,490,649 ordinary shares were outstanding, out of which options to purchase 6,135,000 ordinary shares were held by our directors and executive officers as a group. The exercise prices of these options range from S$0.25 to S$6.93. The expiration dates of these options range from February 2010 to October 2015.

Limits under the SGX-ST Listing Manual on the Issue of Shares Pursuant to our Share Plans

     Under the listing rules of the SGX-ST, the aggregate number of ordinary shares which could be issued under all of our share plans shall not exceed 15% of the total number of our issued ordinary shares from time to time (excluding any treasury shares).

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

     As of February 1, 2010, Temasek, through its wholly-owned subsidiary, STSPL, beneficially owned approximately 83.8% of our outstanding ordinary shares. Temasek, a private limited company incorporated in Singapore, is wholly-owned by the Minister for Finance (Incorporated) of Singapore, a body corporate constituted by the Minister for Finance (Incorporation) Act (Cap. 183). As a result, Temasek is able to exercise control over matters requiring the approval of our shareholders.

     Matters that typically require the approval of our shareholders include, among other things:

• the election of directors;

• the merger or consolidation of us with any other entity;

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• any sale of all or substantially all of our assets; and

• the timing and payment of dividends.

     The following table sets forth certain information regarding the ownership of our ordinary shares as of February 1, 2010 by each person who is known by us to own beneficially more than 5% of our outstanding ordinary shares. Beneficial ownership is determined in accordance with the rules of the SEC and includes shares over which the indicated beneficial owner exercises voting and/or investment power or receives the economic benefit of ownership of such securities. Ordinary shares subject to options currently exercisable or exercisable within 60 days are deemed outstanding for the purposes of computing the percentage ownership of the person holding the options but are not deemed outstanding for the purposes of computing the percentage ownership of any other person.

	Number of Shares		Percentage
Name of Beneficial Owner	Beneficially Owned		Beneficially Owned
Temasek(1)		1,845,715,689		83.8	%
Marathon(2)		139,854,000		6.4	%

Notes:
(1)	As notified to our Company by Temasek, a private limited company incorporated in Singapore, wholly-owned by the Minister for Finance (Incorporated) of Singapore, a body corporate constituted by the Minister for Finance (Incorporation) Act (Cap. 183), which owns 100% of the ordinary shares of STSPL. Temasek is therefore deemed to beneficially own 1,845,715,689 of our ordinary shares, which are owned directly by STSPL. The percentage beneficially owned is based on an aggregate 2,202,218,293 ordinary shares outstanding as of February 1, 2010.
(2)	We received notice from Marathon in May 2007 that it had voting control over 102,305,000 ordinary shares, which represented approximately 4.65% of our ordinary shares outstanding as of February 1, 2010, and non-voting control over an additional 37,549,000 ordinary shares, which represented approximately 1.70% of our ordinary shares outstanding as of February 1, 2010.

     The following summarizes the significant changes in the percentage ownership held by our major shareholders during the past three years:

• Prior to the tender offer by STSPL in March 2007, Temasek beneficially owned, and its wholly-owned subsidiary, STSPL, directly owned, approximately 712,228,050 ordinary shares, which represented approximately 35.6% of our outstanding ordinary shares at that time. Upon the consummation of the tender offer in May 2007, Temasek beneficially owned, and STSPL directly owned, 1,838,819,759 ordinary shares (including ordinary shares represented by ADSs and ordinary shares issuable upon conversion of the $134.5 million aggregate principal amount of our 2.5% convertible notes acquired by STSPL in the tender offer), which represented approximately 84.2% of our outstanding ordinary shares at that time. On May 22, 2008, STSPL converted into 145.1 million ordinary shares its entire $134.5 million of our 2.5% convertible notes that it acquired in connection with its tender offer in 2007. See “Item 4. Information on the Company — A. History and Development of our Company.”

• In May 2007, we received notice from Marathon that it had voting and dispositive control over 102,305,000 ordinary shares, which represented 5.0% of our outstanding ordinary shares at that time, and dispositive but non-voting control over an additional 37,549,000 ordinary shares, which represented 1.8% of our outstanding ordinary shares at that time. Prior to May 2007, Marathon was not a major shareholder of our Company.

     All our ordinary shares have identical rights in all respects and rank equally with one another.

     Our ordinary shares have been traded on the SGX-ST since January 31, 2000. Our ADSs were traded on Nasdaq from January 28, 2000 to December 28, 2007. We voluntarily delisted our ADSs from Nasdaq with effect from December 31, 2007 and terminated our ADR program effective April 30, 2008. On May 22, 2009, we filed a certification on Form 15F with the SEC to deregister and terminate our reporting obligations under the Exchange Act with respect to our ordinary shares and our senior notes. Under the SEC’s rules, our SEC reporting obligations under the Exchange Act were immediately suspended upon the filing of the Form 15F and the deregistration became effective 90 days after the filing on August 20, 2009. However, we remain obligated under our senior notes to continue filing with or submitting to the SEC the reports required under the terms of our senior notes on a voluntary basis.

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     As of February 1, 2010, 141,003 of our ordinary shares, representing less than 0.01% of our outstanding shares, were held by a total of 33 holders of record with addresses in the United States. Because many of our ordinary shares were held by brokers and other institutions on behalf of shareholders in street name, we believe that the number of beneficial holders of our ordinary shares is higher.

     The closing price of our ordinary shares on the SGX-ST was S$1.03 per ordinary share on February 1, 2010.

B. Related Party Transactions

     Temasek is a holding company with investments in a group of companies (the “Temasek Group”). We engage in transactions with companies in the Temasek Group in the ordinary course of business. Such transactions are generally entered into on normal commercial terms.

     We entered into a turnkey contract with Chartered Semiconductor Manufacturing Ltd. (“Chartered”) in March 2000 pursuant to which we agreed to provide wafer sort, packaging and test services to Chartered. The term of this agreement, which was due to expire in March 2003, was extended to March 2005 by an amendment agreement dated October 30, 2002 and is automatically renewed on an annual basis unless otherwise terminated. This agreement governed the conduct of business between the parties relating to, among other things, our provision of sort, packaging and test services to Chartered which were previously governed solely by purchase orders executed by Chartered. The agreement did not contain any firm commitment from Chartered to purchase or from us to supply services covered thereunder. In April 2004, we entered into another test services agreement with Chartered pursuant to which we agreed to give Chartered priority to use six of our testers, and access to six additional testers, for which Chartered guaranteed minimum loading and issuance of purchase orders of $450,000 per month. This test services agreement expired in March 2005. In March 2005, we entered into a three-year partnership agreement with Chartered pursuant to which we agreed to provide wafer sort, assembly and test services to Chartered. This is not a firm commitment from Chartered to purchase from us nor is it a firm commitment from us to supply services covered thereunder. In August 2007, we entered into a three-year joint development agreement with Chartered pursuant to which we agreed to jointly develop packaging technology including, but not limited to, the flip-chip assembly technology for Chartered’s advanced wafer technologies. The joint development agreement may be terminated by either of us upon 60 days’ written notice. In December 2009, Temasek completed the divestment of its equity interest in Chartered in connection with the acquisition of Chartered by ATIC International Investment Company LLC.

     We have $9.0 million, $8.6 million and $15.0 million of cash and cash equivalents, and $7.0 million, $19.4 million and $24.3 million of short and long term marketable securities placed with Temasek affiliated financial institutions as of December 30, 2007, December 28, 2008 and December 27, 2009, respectively. Interest income earned were $0.3 million, $0.2 million and $0.3 million in 2007, 2008 and 2009, respectively.

     In June 2006, we entered into a strategic joint venture with CR Logic to sell packaging and test equipment related to specific low lead count packages to CR Logic’s indirect wholly-owned subsidiary, ANST. ANST, an assembly and test company based in Wuxi, China, is a wholly-owned subsidiary of MAT and, in connection with the transaction, we acquired a 25% shareholding in MAT with CR Logic owning a 75% interest. Under the agreements entered into in connection with the joint venture, ANST purchased more than 1,000 sets of key assembly and test equipment from STATS ChipPAC Shanghai Co., Ltd. for $35 million, to be settled in cash installments over a four year period until 2010. STATS ChipPAC Shanghai Co., Ltd. has agreed to continue to provide sales and technical support to our existing customers on specific low lead count packages until December 31, 2009. In addition, STATS ChipPAC Shanghai Co., Ltd. has agreed to refer customers to ANST for which ANST has agreed to pay a commission on the aggregate amount of revenues generated from such orders on a quarterly basis in 2007, 2008 and 2009 and a goodwill payment of $5.0 million if the transferred revenues exceed $180 million over the four year period. The joint venture agreement entered into in connection with our share subscription and sale of assets regulates the relationships, rights and obligations of the shareholders of MAT. In 2008, CR Logic assigned these agreements to its sister subsidiary, CSMC Technologies Corporation. We consented to such assignment.

     In April 2007, we entered into a letter agreement with STSPL relating to STSPL’s options proposal in connection with its tender offer for equity securities of our Company. This agreement governed the procedures for settlement of the options proposal, including payment mechanics. The agreement terminated automatically on June 30, 2007.

     Our operations in Singapore are conducted in a building constructed on land held on a long-term operating lease from a statutory board of the Government of Singapore. The lease is for a 30-year period commencing March 1, 1996 and is renewable for a further 30 years subject to the fulfillment of certain conditions.

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     All new related party transactions (as defined in Item 404 of Regulation S-K under the Securities Act) and certain transactions that constitute interested party transactions (as defined in Rule 904 of the listing manual of the SGX-ST) under our Interested Party Transaction Policy require approval by the Audit Committee of our Board of Directors. In addition, more significant related party transactions must be separately approved by a majority of our Board of Directors and certain transactions that constitute interested party transactions require shareholder approval. We also engage in transactions with other companies directly or indirectly controlled by Temasek, in the ordinary course of business. These transactions, which include transactions for gas, water and electricity, facilities management, transportation and telecommunication services are at their prevailing market rates/prices (including where appropriate, preferential rates and discounts) and on customary terms and conditions, and are generally not subject to review by the Audit Committee. These expenses amounted to approximately $19.8 million, $16.7 million and $2.9 million for 2007, 2008 and 2009, respectively.

C. Interest of Experts and Counsel

     Not applicable

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

     Please see Item 18 for a list of the financial statements filed as part of this annual report.

Legal Proceedings

     In February 2006, our Company, ChipPAC and STATS ChipPAC (BVI) Limited were named as defendants in the California Litigation. The plaintiff, Tessera, has asserted that semiconductor chip packaging, specifically devices having BGA and multi-chip BGA configurations used by the defendants infringe certain patents of Tessera. Tessera has further asserted that our Company is in breach of an existing license agreement entered into by Tessera with ChipPAC, which agreement has been assigned by ChipPAC to our Company.

     In May 2007, at Tessera’s request, the ITC instituted the First ITC Investigation of certain of our Company’s co-defendants in the California Litigation and other companies, including certain of our Company’s customers. In addition, in April 2007, Tessera instituted the Texas Action against certain of our Company’s co-defendants in the California Litigation and other companies. In the First ITC Investigation, the ITC issued a limited exclusion order in May 2009 preventing the named companies from importing certain packaged semiconductor chips and products containing them into the United States. The respondents in the First ITC Investigation appealed to the U.S. Court of Appeals for the Federal Circuit and the appeal is pending. The Texas Action seeks damages and injunctive relief against the named defendants. Both the First ITC Investigation and the Texas Action allege infringement of two of the same patents asserted by Tessera in the California Litigation, and may involve some of the same products packaged by our Company that are included in the California Litigation.

     In May 2008, the ITC instituted the Second ITC Investigation of our Company and other semiconductor package assembly service providers that are included in the California Litigation. In the Second ITC Investigation, Tessera sought an order to prevent the Respondents from providing packaging or assembly services for certain packaged semiconductor chips incorporating small format non-tape BGA semiconductor packages and products containing them, for importation into the United States. In addition, Tessera sought a general exclusion order excluding from importation all small format non-tape BGA semiconductor packages (and downstream products containing such packages), regardless of whether such packages are assembled by the Respondents. The Second ITC Investigation alleged infringement of three of the same patents asserted by Tessera in the California Litigation. Our Company responded to the complaint in June 2008. In February 2009, the Second ITC Investigation was stayed pending the outcome of the First ITC Investigation. In March 2009, Tessera moved to terminate the Second ITC Investigation. In August 2009, the ITC issued a final determination terminating the Second ITC Investigation.

     The district court in the California Litigation has vacated the trial schedule and stayed all proceedings pending a final resolution of the First ITC Investigation. The PTO has also instituted reexamination proceedings on all of the patents Tessera has asserted in the California Litigation and the Second ITC Investigation. It is not possible to predict the outcome of the California Litigation, the total costs of resolving the California Litigation, or when the stay in the California Litigation will be lifted; nor is it possible to predict the

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outcome of the First ITC Investigation or the Texas Action. It is also not possible to predict the outcome of the PTO proceedings or their impact on the California Litigation or the First ITC Investigation.

     We believe that we have a meritorious defense to these claims and intend to defend the lawsuit(s) vigorously. A court or ITC determination that our products or processes infringe the intellectual property rights of others could result in significant liability and/or require us to make material changes to our products and/or processes. Due to the inherent uncertainties of the lawsuit(s) and investigation(s), we cannot accurately predict the ultimate outcome and it could result in significant liability and/or injunction and could have a material adverse effect on the business, financial condition and the results of operations of our Company.

     We also, from time to time, receive from customers, requests for indemnification against pending or threatened infringement claims brought against such customers, such as the Tessera cases described above. The resolution of any future allegation or request for indemnification could have a material adverse effect on our business, financial condition and results of operations.

     On April 24, 2009, Freescale notified us that, on April 21, 2009, it filed a complaint against our Company in the United States District Court for the Western District of Texas, claiming damages of approximately $7 million plus an unspecified amount of consequential damages, attorneys’ fees and costs in connection with an alleged breach of contract and other claims arising out of an alleged manufacturing defect in parts packaged for Freescale by our Company. Freescale demanded mediation of the claims, as required by its underlying contract with our Company.

     On August 7, 2009, we filed an answer to Freescale’s complaint as well as a counterclaim for various breaches of contract, claiming damages in excess of $1.56 million, in the United States District Court for the Western District of Texas. The parties reached an amicable settlement of the aforementioned claim by Freescale and our Company’s counterclaim in the third quarter of 2009. The associated legal settlement costs have been fully reserved and reflected in our financial statements for 2009.

     We are not involved in any other legal or arbitration proceedings, the outcome of which we believe would have a material adverse effect on our business, financial condition and results of operations. From time to time, however, we are involved in claims that arise in the ordinary course of business, and we maintain insurance that we believe to be adequate to cover these claims.

Dividend Policy

     We have never declared or paid any cash dividends on our ordinary shares. We may declare dividends by ordinary resolution of our shareholders at a general meeting, but we may not pay dividends in excess of the amount recommended by our Board of Directors. Our Board of Directors may, without the approval of our shareholders, also declare an interim dividend. We must pay all dividends out of profits. In making its determinations, our Board of Directors will consider, among other things, future earnings, results of operations, capital requirements, our general financial condition, general business conditions and other factors which they may deem relevant. We may pay dividends in Singapore dollars or U.S. dollars.

B. Significant Changes

     There has been no significant subsequent event following the close of the last financial year up to the date of this annual report that is known to us and requires disclosure in this annual report for which disclosure was not made in this annual report.

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

Price range of our ordinary shares

     The historical ‘high’ and ‘low’ prices of our ordinary shares for the periods stated are as shown below.

	Price per				Price per
	Ordinary Share				ADS on
	on the SGX-ST				Nasdaq(1)(2)
	(in S$)				(in $)
	High		Low		High		Low
Annual for 2005		1.34		0.88		8.16		5.30
Annual for 2006		1.42		0.84		8.85		4.91
Annual for 2007		1.88		1.14		12.79		7.26

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	Price per				Price per
	Ordinary Share				ADS on
	on the SGX-ST				Nasdaq(1)(2)
	(in S$)				(in $)
	High		Low		High		Low
Annual for 2008		1.60		0.42		—		—
Annual for 2009		1.00		0.27		—		—
Quarterly highs and lows:
— quarter ended March 30, 2008		1.60		1.10		—		—
— quarter ended June 29, 2008		1.35		1.12		—		—
— quarter ended September 28, 2008		1.17		0.82		—		—
— quarter ended December 28, 2008		0.92		0.40		—		—
— quarter ended March 29, 2009		0.53		0.27		—		—
— quarter ended June 28, 2009		0.71		0.31		—		—
— quarter ended September 27, 2009		0.97		0.59		—		—
— quarter ended December 27, 2009		1.00		0.80		—		—
Monthly highs and lows:
September 2009		0.97		0.81		—		—
October 2009		0.92		0.85		—		—
November 2009		0.89		0.80		—		—
December 2009		1.02		0.80		—		—
January 2010		1.20		0.99		—		—
February 2010		1.07		1.00		—		—

Notes:
(1)	Prior to July 2006, on the Nasdaq National Market.
(2)	We voluntarily delisted our ADSs from Nasdaq with effect from December 31, 2007, after which our ADSs traded on the over-the-counter market in the United States until we terminated our ADR program with effect from April 30, 2008.

B. Plan of Distribution

     Not applicable

C. Markets

     Our ordinary shares are listed on the SGX-ST (SGX-ST: STATSChP).

D. Selling Shareholders

     Not applicable

E. Dilution

     Not applicable

F. Expenses of the Issue

     Not applicable

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

     Not applicable

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B. Memorandum and Articles of Association

     We are a company limited by shares incorporated under the laws of the Republic of Singapore. Our Company’s registration number in Singapore is 199407932D.

Objects

     We were established mainly to manufacture, assemble, test and provide services relating to electrical and electronic components. We also carry out research and development work in relation to the electrical and electronic industry.

     A detailed list of all the other objects and purposes of our Company can be found in Article 3 of our Memorandum of Association which was filed with the SEC as an exhibit to our annual report on Form 20-F (File Number 000-29103) for fiscal year ended December 31, 2006, on March 12, 2007 and is available for examination at our registered office at 10 Ang Mo Kio Street 65, #05-17/20 Techpoint, Singapore 569059, Republic of Singapore.

Board of Directors

     Our Articles of Association state that a director must declare at a meeting of our Board of Directors if there are matters which may conflict with his duties or interests as a director. He is not allowed to vote in respect of any contract or arrangement or other proposal whatsoever in which he has any interest, directly or indirectly, and shall not be counted in the quorum in relation to any resolution with respect to which he is not entitled to vote. If an independent quorum is not achieved, the remaining directors may convene a general meeting.

     Our directors may exercise all the borrowing powers of our Company to borrow money, to mortgage or charge its undertaking, property and uncalled capital, and to issue debentures and other securities.

     A director is not required to hold ordinary shares in our Company.

     Under Singapore law, no person of or over the age of 70 years shall be appointed or act as a director of a public company or of a subsidiary of a public company unless the shareholders at an annual general meeting vote by an ordinary resolution in favor of his appointment to hold office until the next annual general meeting of our Company.

     Our Articles of Association set the minimum number of directors at two. The number of directors retiring and eligible to stand for re-election each year varies, but generally it is equal to (but not less than) one-third of our Board, with the directors who have been in office longest since their re-election or appointment standing for re-election.

     Our Articles of Association permit a director to appoint an alternate director to act in place of such director should the director be unable to perform his or her duties as director for a period of time. There are currently no alternate directors. Under Singapore law, the alternate director is not merely an agent of the director but is accountable to our Company for his or her actions as director during the period for which he or she acts as alternate director.

Ordinary Shares

     We have only one class of shares, namely, ordinary shares. As of December 27, 2009, there were 2,202,218,293 ordinary shares issued and allotted by our Company.

     Until January 30, 2006, our ordinary shares had a par value of S$0.25 each. The Companies (Amendment) Act 2005 of Singapore, which came into effect on January 30, 2006, abolished the concept of “par value” and “authorized capital.” Accordingly, as of January 30, 2006, the shares of our Company have no par or nominal value.

     Our ordinary shares have identical rights in all respects and rank equally with one another. Our Articles of Association provide that we may issue shares of a different class with preferential, deferred, qualified or other special rights, privileges or conditions as our Board of Directors may think fit, and may issue preference shares which are, or at the option of our Company are, redeemable, subject to certain limitations.

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     All of our ordinary shares are in registered form. All our issued ordinary shares are entitled to voting rights described under “— Voting Rights” below. We may, subject to and in accordance with the Companies Act and the rules of the SGX-ST, purchase our own ordinary shares. We may not, except as provided in the Companies Act, grant any financial assistance for the acquisition or proposed acquisition of our ordinary shares.

New Ordinary Shares

     New ordinary shares may only be issued with the prior approval of the shareholders in a general meeting. The approval, if granted, will lapse at the conclusion of the annual general meeting following the date on which the approval was granted or the date by which such annual general meeting is required by law to be held, whichever is earlier. Our shareholders have given the general authority to allot and issue ordinary shares in the capital of our Company prior to the next annual general meeting. Subject to the foregoing, the provisions of the Companies Act and any special rights attached to shares currently issued, all new ordinary shares are under the control of our Board of Directors who may allot and issue the same with such rights and restrictions as it may think fit, provided that, among others, new ordinary shares may not be issued to transfer a controlling interest in our Company without the prior approval in general meeting of our shareholders. Our shareholders are not entitled to pre-emptive rights under our Articles of Association or Singapore law.

Shareholders

     Only persons who are registered in our register of members and, in cases in which the person so registered is The Central Depository (Pte) Limited (“CDP”) or its nominee, as the case may be, the persons named as depositors in the depository register maintained by CDP for our ordinary shares, are recognized as shareholders. We will not, except as required by law, recognize any equitable, contingent, future or partial interest in any ordinary share or other rights in respect of any ordinary share other than an absolute right to the entirety thereof of the registered holder of the ordinary share or of the person whose name is entered in the depository register for that ordinary share. We may close the register of members at any time. However, the register may not be closed for more than 30 days in aggregate in any calendar year. We typically close the register to determine shareholders’ entitlement to receive dividends and other distributions for no more than ten days a year.

Transfer of Ordinary Shares

     There is no restriction on the transfer of fully paid ordinary shares except where required by law. Our directors may decline to register any transfer of ordinary shares which are not fully paid shares or ordinary shares on which we have a lien. Ordinary shares may be transferred by a duly signed instrument of transfer in a form acceptable to our directors. Our directors may also decline to register any instrument of transfer unless, among other things, it has been duly stamped if required and is presented for registration together with a certificate of payment of stamp duty (if any), the share certificate to which the transfer relates and such other evidence of title as they may require. We will replace lost or destroyed certificates for ordinary shares if the applicant pays a fee which will not exceed S$2 and furnishes any evidence and indemnity that our directors may require.

General Meetings of Shareholders

     We are required to hold an annual general meeting every year. Our Board of Directors may convene an extraordinary general meeting whenever it thinks fit and must do so if shareholders representing not less than 10% of our paid-up capital request in writing that such a meeting be held. In addition, two or more shareholders holding not less than 10% of the total number of our issued shares may call a meeting. Unless otherwise required by Singapore law or by our Articles of Association, voting at general meetings is by ordinary resolution, requiring an affirmative vote of a simple majority of the votes cast at that meeting. An ordinary resolution suffices, for example, for the appointment of directors. A special resolution, requiring the affirmative vote of at least 75% of the votes cast at the meeting, is necessary for certain matters under Singapore law, including the voluntary winding up of our Company, amendments to our Memorandum and Articles of Association, a change of our corporate name and a reduction in our share capital. We must give at least 21 days’ notice in writing for every general meeting convened for the purpose of passing a special resolution. Ordinary resolutions require at least 14 days’ notice in writing. The notice must be given to every shareholder who has supplied us with an address in Singapore for the giving of notices and must set forth the place, the day and the hour of the meeting and, in the case of special business, the general nature of that business and a statement regarding the effect of any proposed resolution on our Company in respect of such special business.

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Voting Rights

     A shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy. A proxy need not be a shareholder. A person who holds ordinary shares through the CDP book-entry settlement system will only be entitled to vote at a general meeting if his name appears on the depository register maintained by CDP as of 48 hours before the time of the general meeting as certified by CDP to our Company. Except as otherwise provided in our Articles of Association, two or more shareholders holding at least 33 1/3% of our total issued and fully-paid ordinary shares must be present in person or by proxy to constitute a quorum at any general meeting. Under our Articles of Association, on a show of hands, every shareholder present in person or by proxy shall have one vote (provided that in the case of a shareholder who is represented by two proxies, only one of the two proxies as determined by that shareholder or, failing such determination, by the chairman of the meeting (or by a person authorized by him) in his sole discretion shall be entitled to vote on a show of hands), and on a poll, every shareholder present in person or by proxy shall have one vote for each ordinary share held or represented. A poll may be demanded in certain circumstances, including by the chairman of the meeting, by not less than five shareholders present in person or by proxy and entitled to vote at the meeting, by a shareholder present in person or by proxy and representing not less than one-tenth of the total voting rights of all the shareholders having the right to vote at the meeting or, by a member present in person or by proxy and holding not less than 10% of the total number of paid-up shares of our Company (excluding treasury shares).

Dividends

     We may, by ordinary resolution of our shareholders, declare dividends at a general meeting, but we may not pay dividends in excess of the amount recommended by our directors. We must pay all dividends out of our profits. Our directors may also declare an interim dividend without the approval of the shareholders. All dividends in respect of shares are paid in proportion to the number of shares held by a shareholder, unless the rights attaching any ordinary shares or the terms of issue thereof provide otherwise. Where shares are partly paid, all dividends must be apportioned and paid proportionately to the amounts paid or credited as paid on the partly paid shares. All dividends must be apportioned and paid proportionately to the amounts so paid or credited as paid during any portion or portions of the period in respect of which the dividend is paid. An amount paid or credited as paid on a share in advance of a call is to be ignored. Unless otherwise directed, dividends are paid by check or warrant sent through the post to each shareholder at his registered address. Notwithstanding the foregoing, the payment to CDP of any dividend payable to a shareholder who holds his ordinary shares through the CDP book-entry settlement system shall, to the extent of payment made to CDP, discharge us from any liability to that shareholder in respect of that payment.

Bonus and Rights Issue

     Our directors may, with approval by our shareholders at a general meeting, issue bonus shares for which no consideration is payable to our Company to the shareholders in proportion to their shareholdings and/or capitalize any reserves or profits (including profit or monies carried and standing to any reserve account) and distribute the same as bonus shares credited as paid-up to our shareholders in proportion to their shareholdings. Our directors may also issue rights to take up additional ordinary shares to shareholders in proportion to their shareholdings. Such rights are subject to any conditions attached to such issue and the regulations of any stock exchange in which we are listed.

Take-Overs

     The Singapore Code on Take-overs and Mergers (the “Take-Over Code”) regulates the acquisition of, among others, ordinary shares of public companies and contains certain provisions that may delay, deter or prevent a future take-over or change in control of our Company. Any person acquiring an interest, either on his or her own or together with parties acting in concert with him in 30% or more of our voting shares or, if such person holds, either on his own or together with parties acting in concert with him, between 30% and 50% (both inclusive) of our voting shares, and acquires additional voting shares representing more than 1% of our voting shares in any six-month period, may be required to extend a take-over offer for the remaining voting shares in accordance with the provisions of the Take-Over Code.

     Parties “acting in concert” comprise individuals or companies who, pursuant to an arrangement or understanding (whether formal or informal), co-operate, through the acquisition by any of them of shares in a company, to obtain or consolidate effective control of that company. Certain persons are presumed (unless the presumption is rebutted) to be acting in concert with each other. They are as follows: (1) a company, its related companies and their associated companies and companies whose associated companies include any of these companies and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the aforementioned for the purchase of voting rights; (2) a company and any of its directors (including their close relatives, related

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trusts and companies controlled by any of the directors, their close relatives and related trusts); (3) a company and any of its pension funds and employee share schemes; (4) a person and any investment company, unit trust or other fund whose investment such person manages on a discretionary basis, but only in respect of the investment account which such person manages; (5) a financial or other professional adviser, including a stockbroker, and its client in respect of shares held by the adviser and persons controlling, controlled by or under the same control as the adviser and all the funds managed by the adviser on a discretionary basis, where the shareholdings of the adviser and any of those funds in the client total 10% or more of the client’s equity share capital; (6) directors of a company (including their close relatives, related trusts and companies controlled by any of such directors, their close relatives and related trusts) that is subject to an offer or where the directors have reason to believe a bona fide offer for the company may be imminent; (7) partners; and (8) an individual and his close relatives, related trusts, any person who is accustomed to act in accordance with his or her instructions and companies controlled by the individual, his close relatives, his related trusts or any person who is accustomed to act in accordance with his instructions and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the aforementioned for the purchase of voting rights.

     Subject to certain exceptions, a take-over offer must be in cash or be accompanied by a cash alternative at not less than the highest price paid by the offeror or parties acting in concert with the offeror during the offer period or within the preceding six months.

     Under the Take-Over Code, where effective control of a public company is acquired or consolidated by a person, or persons acting in concert, a general offer to all other shareholders is normally required. An offeror must treat all shareholders of the same class in an offeree company equally. A fundamental requirement is that shareholders in the company subject to the take-over offer must be given sufficient information, advice and time to consider and decide on the offer.

Liquidation or Other Return of Capital

     If our Company liquidates or in the event of any other return of capital, holders of ordinary shares will be entitled to participate in any distribution of surplus assets in proportion to their shareholdings, subject to any special rights attaching to any other class of shares.

Indemnity

     As permitted by Singapore law, our Articles of Association provide that, subject to the Companies Act, our directors and officers shall be entitled to be indemnified by our Company against any liability incurred in defending any proceedings, whether civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by them as officers or employees of our Company. We may not indemnify our directors and officers against any liability which by law would otherwise attach to them in respect of any negligence, default, breach of duty or breach of trust of which they may be guilty in relation to our Company.

Limitations on Rights to Hold or Vote Shares

     Except as described herein, there are no limitations imposed by Singapore law or by our Articles of Association on the rights of non-resident shareholders to hold or exercise voting rights attached to our ordinary shares.

Substantial Shareholdings

     The Companies Act and the Securities and Futures Act, Chapter 289 of Singapore require the substantial shareholders of our Company to give notice to our Company and the SGX-ST, including particulars of their interest and the circumstances by reason of which they have such interest, within two business days of their becoming substantial shareholders of our Company and of any change in the percentage level of their interest.

     Under the Companies Act, a person has a substantial shareholding in our Company if he has an interest (or interests) in one or more voting shares in our Company and the total votes attached to that share, or those shares, are not less than 5% of the total votes attached to all the voting shares in our Company.

     “Percentage level” in relation to a substantial shareholder, means the percentage figure ascertained by expressing the total votes attached to our voting shares in which the substantial shareholder has an interest or interests immediately before or (as the case may be) immediately after the relevant time as a percentage of the total votes attached to all the voting shares in our Company, and, if it is not a whole number, rounding that figure down to the next whole number.

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Minority Rights

     The rights of minority shareholders of Singapore-incorporated companies are protected under Section 216 of the Companies Act, which gives the Singapore courts a general power to make any order, upon application by any shareholder of the company, as they think fit to remedy situations where: (1) the affairs of the company are being conducted or the powers of the board of directors are being exercised in a manner oppressive to, or in disregard of the interests of, one or more of the shareholders; or (2) the company takes an action, or threatens to take an action, or the shareholders pass a resolution, or proposes to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to, one or more of the shareholders, including the applicant.

     Singapore courts have wide discretion as to the relief they may grant and such relief is not limited to the relief listed in the Companies Act. However, Singapore courts may direct or prohibit any act or cancel or vary any transaction or resolution, regulate the conduct of our Company’s affairs in the future, and authorize civil proceedings to be brought in the name of, or on behalf of, our Company by a person or persons and on such terms as the courts may direct. The Singapore courts may also direct that our Company or some of our shareholders purchase the shares of a minority shareholder and, in the case of a purchase of shares by us, a corresponding reduction of our share capital, and direct that our Memorandum or Articles of Association be amended or that our Company be wound up.

C. Material Contracts

     We lease the land on which our Singapore facility is situated under a long-term operating lease from the Housing and Development Board, a statutory board of the Government of Singapore, pursuant to a lease agreement dated November 18, 1996. The lease is for a 30-year period commencing March 1, 1996, and is renewable for a further 30 years subject to the fulfillment of certain conditions. The rent is $34,366 (S$48,456) per month, after deducting a rebate offered by the landlord, subject to revision to market rate in March of each year, with the increase capped at 4% per annum. In July 2004, the rate of rental increase was changed from a cap of 4% per annum to a cap of the lower of 5.5% per annum of the preceding annual rental rate or to the prevailing rental rate posted by the Housing and Development Board. The new rates became effective in September 2004.

     We have licensed patent rights from Freescale to use technology in manufacturing BGA packages under an agreement which we initially entered into with Motorola, Inc. in October 1996. We amended this agreement in April 2003 and September 2006 to, among other things, extend the agreement until December 31, 2010 and to redefine the formula for calculating royalty payments due under the agreement. In June 2004, Motorola, Inc. assigned this agreement, as amended, to Freescale. Under this agreement, as amended, we are required to pay Freescale a royalty based upon a percentage of total consolidated gross sales revenues. We cannot assure you that we will be able to renew this agreement when it expires on terms that are favorable to us or at all.

     On June 20, 2003, we executed a Strategic Assistance Loan Agreement with Simmtech Co. Ltd (“Simmtech”), pursuant to which we granted an interest-free loan of $5.0 million to Simmtech and Simmtech undertook to supply such quantities of equipment, materials, substrates, labor and other supplies to enable us to produce a specified number of PBGA and small thin Plastic Ball Grid Array (“stPBGA”) packages up to mid 2007. The loan was repayable in installments of $450,000, with the first installment of the repayment amount due on June 23, 2004 and thereafter on the first day of each subsequent three month period, except that the last repayment amount was due no later than July 1, 2007. In order to secure Simmtech’s obligations under the Strategic Assistance Loan Agreement to us, Simmtech deposited and pledged 0.7 million shares of common stock of Simmtech under a Pledge Agreement dated June 20, 2003 as well as transferred to us, pursuant to a Yangdo Tambo Agreement dated June 20, 2003, all its rights and interests in certain movable property to be released and re-transferred upon the repayment of the loan. On December 26, 2003, we signed a Base Capacity and Continuing Support Agreement with Simmtech and a Loan Agreement pursuant to which we granted an interest-free loan of $15.0 million to Simmtech. Under the Base Capacity and Continuing Support Agreement, which took effect on January 1, 2004, Simmtech further committed and undertook to supply certain quantities of substrates, laminates, materials and other items to enable us to produce certain specified quantities of PBGA and stPBGA packages. The loan was to be repaid in installments of $882,353, with the first installment to be paid on January 2, 2005 and subsequent installments to be paid on the first day of each subsequent three-month period, provided that the last installment was to be due no later than January 2, 2009. Under the Loan Agreement, in the event that Simmtech was to spin off its substrate manufacturing operations and form a new company to run such operations, we would be entitled to make an equity investment of up to 30% in the new company. Further, for as long as the loan remained outstanding from Simmtech, we would have the right to nominate for election one non-standing member to the board of directors of Simmtech. In order to secure Simmtech’s obligations under the Loan Agreement to us, Simmtech deposited and pledged 2.4 million shares of common stock of Simmtech under a Share Pledge Agreement dated December 26, 2003. Simmtech also transferred to us, pursuant to a Yangdo Tambo Agreement dated December 26, 2003, all its rights and interests in the equipment to be purchased using the loan sums. These rights and interests were to be released and re-transferred upon repayment of the loan. In

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addition, under the Factory Kun-Mortgage Agreement dated December 26, 2003, Simmtech granted us a fourth priority maximum amount factory mortgage in the amount of $15.0 million over certain property owned by Simmtech to secure its obligations to us under the Loan Agreement, Share Pledge Agreement, Yangdo Tambo Agreement and this Factory Kun-Mortgage Agreement. This factory mortgage was to be released on the date on which all of the secured obligations had been unconditionally and irrevocably paid and discharged in full. At Simmtech’s request, we discharged the pledge of 0.7 million shares on January 27, 2005 in consideration for the 2.4 million shares pledged to us under the December 26, 2003 Share Pledge Agreement. The $5.0 million and $15.0 million loans were fully repaid as of December 28, 2008.

     In November 2003, we issued our zero coupon convertible notes pursuant to an indenture dated as of November 7, 2003 between ST Assembly Test Services Ltd. (now known as STATS ChipPAC Ltd.) and The Bank of New York, as trustee. These notes are our senior, unsecured and unsubordinated obligations. The convertible notes had a yield to maturity of 4.25%. At the maturity date on November 7, 2008, 123.4% of the principal amount, comprising principal and redemption interest, would be due and payable. The notes could be converted into our ordinary shares, or subject to certain limitations, ADSs, each of which represented ten ordinary shares, at an initial conversion price of $3.05 per ordinary share (equivalent to an initial number of 570.5902 ordinary shares per $1,000 principal amount of convertible notes, based on a fixed exchange rate of US$1.00 = S$1.7403). The conversion price could be subjected to adjustments for certain events. We could elect to satisfy our obligations to deliver ordinary shares or ADSs through the payment of cash in accordance with the terms of the notes. We could redeem all or a portion of the convertible notes at any time on or after November 7, 2006 at a price to yield of 4.25% per annum to the redemption date if our shares or ADSs trade at or above 130% of the conversion price for a period of 20 trading days in any 30 consecutive trading day period. The note holders had the option to require us to repurchase all or a portion of their notes on November 7, 2007 at a price equal to 118.32% of the principal amount of the notes being redeemed, plus any accrued and unpaid interest accrued to the date of redemption. In addition, upon the occurrence of certain repayment events, including a change in control, on or prior to November 7, 2008, each note holder could require us to repurchase all or a portion of such holder’s notes at a price to yield of 4.25% per year to the redemption date. In November 2007, we redeemed $96.4 million aggregate principal amount of the notes pursuant to note holders’ exercise of their redemption option. We paid an aggregate consideration of $114.1 million (including yield to maturity interest accrued up to November 7, 2007) for the redemption. We financed the redemption with cash and short-term borrowings. In January and February 2008, we repurchased $12.4 million and $2.5 million aggregate principal amount of the notes, respectively. We paid an aggregate consideration of $14.7 million (including accrued yield to maturity interest) and $2.9 million (including accrued yield to maturity interest), respectively, for the repurchases. On June 6, 2008, we redeemed the remaining $3.7 million principal amount of our zero coupon convertible notes. We paid a consideration of $4.5 million (including accrued interest) for the redemption and financed the repurchases with cash in hand.

     In May and June 2003, ChipPAC issued the 2.5% convertible notes pursuant to an indenture dated as of May 28, 2003 between ChipPAC (now known as STATS ChipPAC, Inc.) and U.S. Bank National Association, as trustee. These convertible notes are ChipPAC’s unsecured and subordinated obligations. These convertible notes had a maturity date of June 1, 2008, with interest at the rate of 2.5% per annum payable semi-annually on June 1 and December 1 of each year. On the maturity date of these convertible notes, ChipPAC would have been required to pay to the note holders of these convertible notes 100% of the principal amount. These convertible notes were originally convertible into ChipPAC Class A common stock. However, as a condition precedent to the merger, we, ChipPAC and the trustee for these convertible notes entered into a supplemental indenture to modify the conversion rights of these convertible notes such that these convertible notes would be convertible into our ADSs. Pursuant to the supplemental indenture, these convertible notes could be converted into our ADSs at a conversion price of $9.267 per ADS. The conversion price could be subject to adjustments for certain events. These convertible notes were not redeemable at the option of ChipPAC. Upon the occurrence of specified change in control events, each holder of these notes could require ChipPAC to repurchase all or a portion of such holder’s notes at a purchase price equal to 100% of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if any. On October 11, 2004, we, ChipPAC and the trustee for these convertible notes entered into a second supplemental indenture to provide for an unconditional guarantee of these convertible notes on a subordinated basis by STATS ChipPAC (but not by any of its subsidiaries). On October 18, 2004, ChipPAC commenced a consent solicitation from holders of these convertible notes to amend the indenture governing these convertible notes to replace ChipPAC’s obligation to file with the SEC annual reports and such other information, documents and reports specified in Sections 13 and 15(d) of the Exchange Act with an obligation for us to file all such reports with the SEC as are applicable to a foreign private issuer. The consent solicitation expired on November 1, 2004. ChipPAC received valid deliveries of consents from holders of approximately $130.5 million aggregate principal amount, or 87%, of these convertible notes outstanding. Accordingly, ChipPAC obtained the requisite consents authorizing the adoption of the proposed amendment to the indenture. The consents were accepted and the amendments to the indenture became effective on November 2, 2004. Payment of the consent fee of $326,250 was made on November 4, 2004.

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     In May 2007, in connection with the tender offer by STSPL for equity securities of our Company, STSPL acquired $134.5 million aggregate principal amount of these convertible notes. The balance $15.5 million principal amount of the 2.5% convertible notes were converted into ADSs in May 2007. In November 2007, we entered into a letter agreement with STSPL pursuant to which STSPL agreed to the following: (1) the conversion right of these convertible notes will be satisfied by a delivery of our ordinary shares in lieu of ADSs upon conversion of these convertible notes, (2) we have no obligation to list or cause to have quoted the ADSs on Nasdaq or another national securities exchange or OTC market or any other market, (3) if our reporting obligations under the Exchange Act are terminated, we have no obligation to file with the SEC or provide the trustee for these convertible notes any reports, information or documents or comply with the provisions of the U.S. Trust Indenture Act of 1939, as amended, and (4) before STSPL transfers any of these convertible notes, it will procure the transferee to deliver a letter substantially in the form of the November 2007 letter or consent to us, ChipPAC and the trustee entering into a supplemental indenture to amend the indenture to effect the foregoing. On May 22, 2008, STSPL converted the balance $134.5 million aggregate principal amount of our 2.5% convertible notes into ordinary shares.

     In November 2004, we issued $215.0 million of 6.75% senior notes due 2011 pursuant to an indenture dated as of November 18, 2004 between STATS ChipPAC Ltd. and U.S. Bank National Association, as trustee. These notes are our senior unsecured obligations. These notes are guaranteed, on an unsecured senior basis, by all of our existing wholly-owned subsidiaries (except STATS ChipPAC Test Services (Shanghai) Co., Ltd., STATS ChipPAC Shanghai Co., Ltd. and STATS ChipPAC Semiconductor Shanghai Co., Ltd.) and our future restricted subsidiaries (except where prohibited by local law). These notes will mature on November 15, 2011, with interest at the rate of 6.75% per annum payable semi-annually on May 15 and November 15 of each year, commencing May 15, 2005. Prior to November 15, 2008, we may redeem all or part of these notes at any time by paying a “make-whole” premium plus accrued and unpaid interest. We may redeem all, but not less than all, of these notes at any time in the event of certain changes affecting withholding taxes at 100% of their principal amount plus accrued and unpaid interest. On or after November 15, 2008, we may redeem all or a part of these notes at any time at the redemption prices specified under the terms and conditions of these notes plus accrued and unpaid interest. In addition, prior to November 15, 2007, we may redeem up to 35% of these notes with the net proceeds of certain equity offerings. Upon a change of control, we will be required to offer to purchase these notes at 101% of their principal amount plus accrued and unpaid interest.

     In July 2005, we issued $150.0 million of 7.5% senior notes due 2010 pursuant to an indenture dated as of July 18, 2005 between STATS ChipPAC Ltd. and U.S. Bank National Association, as trustee. These notes are our senior unsecured obligations. The senior notes are guaranteed on an unsecured senior basis, by all of our existing wholly-owned subsidiaries (except STATS ChipPAC Test Services (Shanghai) Co., Ltd., STATS ChipPAC Shanghai Co., Ltd., STATS ChipPAC Semiconductor Shanghai Co., Ltd. and STATS ChipPAC Korea Ltd.) and our future restricted subsidiaries (except where prohibited by local law). These notes will mature on July 19, 2010, with interest at the rate of 7.5% per annum payable semi-annually on January 19 and July 19 of each year, commencing January 19, 2006. Prior to July 19, 2010, we may redeem all or part of these notes at any time by paying a “make-whole” premium plus accrued and unpaid interest. We may redeem all, but not less than all, of these notes at any time in the event of certain changes affecting withholding taxes at 100% of their principal amount plus accrued and unpaid interest. In addition, prior to July 19, 2008, we may redeem up to 35% of these notes with the net proceeds of certain equity offerings. Upon a change of control, we will be required to offer to purchase these notes at 101% of their principal amount plus accrued and unpaid interest.

     STATS ChipPAC Korea Ltd. has a line of credit from Hana Bank with a credit limit of $25.0 million pursuant to a term loan agreement dated May 29, 2006. In 2006, STATS ChipPAC Korea Ltd. borrowed $12.0 million under this facility to finance its purchase of a building and land in South Korea. In 2007, STATS ChipPAC Korea Ltd. borrowed an additional $3.6 million under this facility. The limit under these lines of credit was decreased to $6.6 million in February 2009. Interest was payable on a monthly basis. The principal on the $12.0 million loan was repayable over eight equal quarterly installments from September 2007 to June 2009. The principal on the $3.6 million loan was repayable at maturity in June 2009. In June 2009, STATS ChipPAC Korea Ltd. rolled forward the remaining principal amount outstanding under the $12.0 million loan and the $3.6 million loan, aggregating $5.1 million, as a loan under one facility with a credit limit of $5.1 million. The interest on this $5.1 million line of credit was payable on a monthly basis. The principal was repayable at maturity in June 2010 but STATS ChipPAC Korea Ltd. fully prepaid the loan in September 2009 and the facility was terminated.

     In June 2006, we entered into a strategic joint venture with CR Logic to sell packaging and test equipment related to specific low lead count packages to CR Logic’s indirect wholly-owned subsidiary, ANST. In connection with the transaction, we acquired, pursuant to a subscription agreement, for a cash consideration of $10.0 million, a 25% shareholding in MAT with CR Logic owning a 75% interest. ANST, an assembly and test company based in Wuxi, China, is a wholly owned subsidiary of MAT. Under the agreements entered into in connection with the joint venture, ANST, has agreed to purchase more than 1,000 sets of key assembly and test equipment from STATS ChipPAC Shanghai Co., Ltd. for $35.0 million, to be settled in cash installments over a four year period

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until 2010. To-date, we have received $17.8 million from ANST. STATS ChipPAC Shanghai Co., Ltd. has agreed to continue to provide sales and technical support to our existing customers on specific low lead count packages until December 31, 2009. In addition, STATS ChipPAC Shanghai Co., Ltd. has agreed to refer customers to ANST for which ANST has agreed to pay a commission on the aggregate amount of revenues generated from such orders on a quarterly basis in 2007, 2008 and 2009 and a goodwill payment of $5.0 million if the transferred revenues exceed $180.0 million over the four-year period. The joint venture agreement entered into in connection with our share subscription and sale of assets regulates the relationships, rights and obligations of the shareholders of MAT. In connection with this transaction, we received a deed of indemnity dated June 2006 from CR Logic, MAT and Wuxi China Resources Microelectronics (Holdings) Limited, under which they jointly and severally agree to indemnify each of us, MAT and ANST, as the case may be, against any losses, liabilities and damages suffered, any depletion in or reduction in value of assets, or increase in related liabilities in connection with any claim for taxation arising from transactions, earnings, accruals or receipts occurring prior to the completion all transactions contemplated under these agreements. In 2008, CR Logic assigned these agreements to its sister subsidiary, CSMC Technologies Corporation. We consented to such assignment.

     In August 2006, we entered into a facility agreement with Oversea-Chinese Banking Corporation Limited, as the arranger and agent, and six lenders for a syndicated three-year revolving line of credit of $125.0 million. The purpose of the loan facility was to fund general working capital requirements. The floating interest rate on this facility was determined by reference to LIBOR. In November 2007, we drew down $55.0 million. The loan bore interest at the rate of 6.0% per annum. The loan was repaid in December 2007 and we cancelled this loan facility on January 31, 2008, on which date no loan was outstanding.

     In August 2006, STATS ChipPAC Taiwan Semiconductor Corporation, entered into a NT$3.6 billion (approximately $112.4 million based on the exchange rate as of February 1, 2010) floating interest rate loan facility with a syndicate of lenders, with Taishin Bank as the sponsor bank. The purpose of this loan is to fund the purchase of fixed assets, refinancing existing indebtedness and/or general working capital requirements. The floating interest rate on the facility is determined by reference to a 90-day commercial paper interest rate and is payable on a quarterly basis. The loan draw downs must be made within 24 months from the date of first drawdown, which took place in February 2007. As of December 27, 2009, STATS ChipPAC Taiwan Semiconductor Corporation has drawn down NT$0.7 billion (approximately $21.9 million based on exchange rate as of February 1, 2010) under the term loan facility. The principal of and interest on the loan is payable in nine quarterly installments commencing February 2009 (being 24 months from first draw down date) with the first eight quarterly installments each repaying 11% of the principal and the last quarterly installment repaying 12% of the principal. In May 2009, STATS ChipPAC Taiwan Semiconductor Corporation refinanced the outstanding NT$0.6 billion (approximately $18.7 million based on exchange rate as of February 1, 2010) loan with new credit facilities of NT$873.0 million ($27.3 million based on exchange rate as of February 1, 2010) obtained from various bank and financial institutions. As December 27, 2009, $19.3 million of loan under these credit facilities was outstanding. These credit facilities have varying interest rates ranging from 1.73% to 1.96% per annum and maturities ranging from May 2011 to May 2012. As of December 27, 2009, US$4.6 million of loan under these credit facilities were classified as short-term liabilities due to the expectation of early repayment of certain of these credit facilities.

     In April 2007, we entered into an agreement with Schott Advanced Packaging Singapore Pte. Ltd. for the purchase of equipment and assets relating to wafer level processing for an aggregate purchase price of S$6.8 million (approximately $4.8 million based on the exchange rate as of February 1, 2010). Immediately upon execution of this agreement, we paid the entire purchase price in a single payment to Schott Advanced Packaging Singapore Pte. Ltd. for its simultaneous sale, assignment, transfer and delivery of the equipment and assets to us. Under this agreement, we agreed to use commercially reasonable efforts to evaluate the possibility of obtaining an EDB grant pursuant to this agreement. If an EDB grant is disbursed to either party pursuant to this agreement, the recipient shall pay the other party 25% of the amount it receives from EDB within 30 days of receipt of any such disbursement.

     In May 2007, STATS ChipPAC Malaysia Sdn. Bhd. entered into an agreement with Mingxin and Daheng New Epoch Technology, Inc., as guarantor, for the sale of assembly and test assets used for the manufacture of discrete power packages to Mingxin, as well as related training and technical assistance, for $10.0 million. Payment of the purchase price and transfer of the assets under the agreement will take place in three equal installments over 12 months from the commencement of the first phase of the transfer unless the transfer plan is amended or updated by mutual agreement of the parties. Additionally, for a period of five years from the commencement of the first phase of the transfer, we agreed to refer all customers of STATS ChipPAC (BVI) Limited to Mingxin in exchange for the quarterly payment by Mingxin of specified fees calculated based on its revenues from such customers, average selling prices and sales adjustments.

     In July 2007, we entered into a definitive asset purchase agreement, as amended by Amendment No. 1 dated October 2, 2007, with LSI pursuant to which STATS ChipPAC (Thailand) Limited acquired LSI’s assembly and test operations in Pathumthani, Thailand,

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which consist of a facility with approximately 463,000 square feet of floor space, manufacturing equipment and certain other assets for an aggregate purchase price of approximately $100.0 million payable over the next four years. We funded the initial payment of $50.0 million of the aggregate purchase consideration with our cash and cash equivalents. STATS ChipPAC (Thailand) Limited issued a promissory note bearing interest of 6.0% per annum for the balance of the purchase price. Interest on the note is payable annually on all outstanding principal amounts under the note and principal is payable in four yearly installments. The amount payable to LSI under the promissory note after a contractual net-off of certain receivables from LSI of $3.2 million amounted to $46.8 million. The promissory note is payable over four annual installments of $20.0 million, $10.0 million, $10.0 million and $6.8 million over four years commencing October 2, 2008. The first and second annual installment of $20.0 million and $10.0 million were paid to LSI in 2008 and 2009, respectively. As of December 27, 2009, $16.8 million was outstanding. In addition, in October 2007, we executed a general purchase agreement with LSI pursuant to which LSI and its affiliates will purchase from us, on an as-ordered basis, IC assembly and test services and assembled and tested ICs.

     We have a line of credit from Bank of America with a credit limit of $50.0 million pursuant to a facility agreement dated November 23, 2007, of which $50.0 million was outstanding as of December 27, 2009 over two loan tranches of $25.0 million each. The principal of and interest on the two loan tranches of $25.0 million each are payable at maturity in February 2010 and June 2010, respectively. These two loan tranches bear interest at the rate of 2.25% per annum and 1.83% per annum, respectively. The Company has the option to roll-forward the principal at maturity for a period of one, two, three, or six months. We rolled forward the loan tranche due to mature in February 2010 for a period of two months.

     STATS ChipPAC Shanghai Co., Ltd. obtained a short term loan facility from Bank of Communications Co., Ltd. with a credit limit of $15.0 million pursuant to a loan contract dated June 30, 2009. As of December 27, 2009, $6.0 million of loan under this credit facility was outstanding over two loan tranches of $3.0 million each. The principal of the two loan tranches of $3.0 million each are payable at maturity in June 2010. Interest on the two loan tranches of $3.0 million each are payable on a quarterly basis. These two tranches bear interest at the rate of 3.4% per annum and 2.5% per annum, respectively.

     STATS ChipPAC Korea Ltd. obtained a short term loan facility from DBS Bank Ltd with a credit limit of $25.0 million pursuant to a facility agreement dated September 4, 2009. No drawdown has been made from this facility as of December 27, 2009.

D. Exchange Controls

     Currently, there are no exchange control restrictions in Singapore.

Exchange Rates

     Fluctuations in the exchange rate between the Singapore dollar and the U.S dollar will affect the U.S. dollar equivalent of the Singapore dollar price of the ordinary shares on SGX-ST. Currently, there are no restrictions in Singapore on the conversion of Singapore dollars into U.S. dollars and vice versa.

     The following table sets forth, information concerning the exchange rates between Singapore dollars and U.S. dollars based on the average closing rate appearing on Reuters on the last business day of each month.

	Singapore Dollars per US$1.00 Closing Rate
	Average (1)		Low		High		Period End
Fiscal Year
2005		1.66		1.62		1.71		1.66
2006		1.59		1.53		1.67		1.53
2007		1.51		1.44		1.55		1.45
2008		1.41		1.34		1.53		1.45
2009		1.46		1.38		1.56		1.41

Note:
(1)	The average of the daily noon buying rates, for fiscal year 2005 to 2007 and daily closing rates for fiscal years 2008 and 2009 on the last business day of each month during the year.

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     The following table sets forth, for the periods indicated, information concerning the exchange rates between Singapore dollars and U.S. dollars based on the average of the closing rate appearing on Reuters.

	Singapore Dollars per US$1.00 Closing Rate
	Average (1)		Low		High		Period End
Month
September 2009		1.42		1.41		1.45		1.41
October 2009		1.40		1.38		1.42		1.40
November 2009		1.39		1.38		1.40		1.38
December 2009		1.40		1.38		1.41		1.41
January 2010		1.40		1.38		1.41		1.40
February 2010		1.41		1.40		1.42		1.41

Note:
(1)	The average of the daily closing rates on each business day during the month.

     The above tables illustrate how many Singapore dollars it would take to buy one U.S. dollar. These transactions should not be construed as a representation that those Singapore dollar or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Singapore dollars, as the case may be, at any particular rate, the rate stated below, or at all.

E. Taxation

Singapore Taxation

     The statements made herein regarding taxation are general in nature and based on certain aspects of the tax laws of Singapore and administrative guidelines issued by the relevant authorities in force as of the date hereof and are subject to any changes in such laws or administrative guidelines, or in the interpretation of these laws or guidelines, occurring after such date, which changes could be made on a retroactive basis. The following is a summary of the material Singapore income tax and stamp duty consequences of the purchase, ownership and disposal of the ordinary shares or ADSs (collectively, referred to as the “Securities” in this section) to a holder of the Securities who is not tax resident in Singapore. The statements below are not to be regarded as advice on the Singapore tax position of any holder of the Securities or of any person acquiring, selling or otherwise dealing in the Securities or on any tax implications arising from the acquisition, sale or other dealings in respect of the Securities. The statements made herein do not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase, own or dispose of the Securities and do not purport to deal with the tax consequences applicable to all categories of investors some of which (such as dealers in securities) may be subject to special rules. Prospective purchasers and holders of the Securities are advised to consult their own tax advisors as to the Singapore or other tax consequences of the acquisition, ownership or disposition of the Securities, including, in particular, the effect of any foreign, state or local tax laws to which they are subject.

Income Tax

     Non-resident corporate taxpayers are subject to income tax on income that is accrued in or derived from Singapore, and on foreign income received or deemed to be received in Singapore, subject to certain exceptions. A non-resident individual is subject to income tax on the income accrued in or derived from Singapore.

     Subject to the provisions of any applicable double taxation treaty, non-resident taxpayers who derive certain types of income from Singapore are subject to a withholding tax on that income at a rate of 17% for the year of assessment 2010 (other than non-resident individuals for which the applicable rate of withholding remains at 20%). We are obligated by law to withhold tax at the source. No comprehensive tax treaty currently exists between Singapore and the United States.

     A company will be regarded as being tax resident in Singapore if the control and management of its business is exercised in Singapore (for example, if the company’s board of directors meets and conducts the business of the company in Singapore). An individual is tax resident in Singapore in a year of assessment if, in the preceding year, he was physically present in Singapore or exercised employment in Singapore (other than as a director of a company) for 183 days or more, or if the individual resides in Singapore.

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Dividend Distributions

     Dividends received in respect of our ordinary shares by either a resident or non-resident of Singapore are not subject to Singapore withholding tax.

     We moved to the one-tier corporate tax system on January 1, 2008. Accordingly, any dividends declared by us after January 1, 2008 will not be subject to Singapore tax in the hands of our shareholders, irrespective of tax residence of the shareholders.

Tax on Capital Gains

     Singapore does not impose tax on capital gains. However, there are currently no specific laws or regulations which address the characterization of capital gains; hence gains or profits may be construed to be of such income nature and subject to tax, especially if they arise from activities which the Inland Revenue Authority of Singapore regards as the carrying on of a trade or business in Singapore. Thus, any gains or profits from the disposal of the Securities are not taxable in Singapore unless the seller is regarded as carrying on a trade or business (for example, one of dealing in Securities) in Singapore, in which case the disposal profits would be taxable as such profits would be considered revenue in nature.

     Inland Revenue Authority of Singapore issued a circular entitled “Income Tax Implications arising from the adoption of Singapore Financial Reporting Standards 39 (“FRS 39”) — Financial Instruments: Recognition and Measurement” (“FRS 39 Circular”). The Income Tax Act, Chapter 134 of Singapore has been amended to give legislative effect to the FRS 39 Circular. The tax regime described in the FRS 39 Circular generally applies, subject to certain “opt-out” provisions, to taxpayers who are required to comply with FRS 39 for financial reporting purposes. Holders of our Securities who are adopting FRS 39 for Singapore income tax purposes may be required to recognize gains or losses on the Securities, irrespective of disposal, in accordance with FRS 39. Holders of our Securities who may be subject to tax treatment under the FRS 39 Circular should consult their own accounting and tax advisors regarding the Singapore income tax consequences of their acquisition, holding or disposal of our Securities.

Stamp Duty

     There is no stamp duty payable in respect of the issuance and holding of Securities. Where Securities evidenced in certificated form are acquired in Singapore, stamp duty is payable on the instrument of transfer of the Securities at the rate of S$0.20 for every S$100 or part thereof of the consideration for, or market value of, the Securities, whichever is higher. The stamp duty is borne by the purchaser unless there is an agreement to the contrary. Where an instrument of transfer is executed outside Singapore or no instrument of transfer is executed, no stamp duty is payable on the acquisition of Securities. However, stamp duty may be payable if the instrument of transfer is executed outside Singapore and received in Singapore.

     Stamp duty is not applicable to electronic transfers of ordinary shares through CDP.

Estate Duty

     Estate duty has been abolished with respect to all deaths occurring on or after February 15, 2008.

United States Federal Income Taxation

     The following is a general summary of the material United States federal income tax consequences of the ownership and disposition of the ordinary shares. This summary applies only to U.S. Holders (as defined below) that have the U.S. dollar as their functional currency and that hold ordinary shares as “capital assets.” This discussion does not address tax considerations applicable to a U.S. Holder’s special circumstances or to U.S. Holders that may be subject to special tax rules. You are a “U.S. Holder” if you are a beneficial owner of ordinary shares and you are, for U.S. federal income tax purposes, (i) a citizen or resident of the United States; (ii) a corporation (or other entity taxable as a corporation) organized under the laws of the United States, any State thereof or the District of Columbia; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust that (a) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions of the trust or (b) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person. The following discussion is based on the tax laws of the United States as in effect on the date hereof and on U.S. Treasury Regulations in effect or, in some cases, proposed, as of the date hereof, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and

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could affect the tax consequences described below. U.S. Holders are urged to consult their own tax advisors with respect to the United States federal income tax consequences of the ownership and disposition of ordinary shares in light of their own particular circumstances, as well as the effect of any state, local or non-United States tax laws.

Distributions on Ordinary Shares

     Subject to the PFIC rules discussed below, distributions, if any, made with respect to the ordinary shares will be included in the income of a U.S. Holder as dividend income to the extent of our current and accumulated earnings and profits, calculated pursuant to United States federal income tax principles. Our Company does not intend to calculate our earnings and profits under U.S. federal income tax principles, therefore a U.S. Holder should expect that a distribution generally will be treated as a dividend. U.S. Holders must include such distributions in income on the date they are actually or constructively received by the U.S. Holder. It is not expected that distributions paid by our Company will represent “qualified dividend income,” and therefore such distributions would be subject to United States federal income taxation at the regular rates applicable to ordinary income.

     A corporate U.S. Holder will not be entitled to a dividends received deduction generally available upon the receipt of dividends distributed by United States corporations. Distributions in excess of our current and accumulated earnings and profits will be treated as a return of capital to the extent of the U.S. Holder’s basis in the ordinary shares and thereafter as capital gain. Such capital gain will be long-term capital gain if the U.S. Holder’s holding period of the ordinary shares is more than one year at the time of sale or exchange.

     If a taxable dividend is paid in a currency other than the U.S. dollar, the amount includible in gross income will be the U.S. dollar value of such dividend, calculated by reference to the exchange rate in effect on the date of actual or constructive receipt of the dividend by the U.S. Holder, regardless of whether the payment is actually converted into U.S. dollars. U.S. Holders should consult their own tax advisors concerning the possibility of foreign currency gain or loss if any such currency is not converted into U.S. dollars on the date of receipt.

     Dividends received with respect to the ordinary shares will be treated as income from outside the United States and will be treated as “passive category income” or “general category income” for United States foreign tax credit purposes. Under the Internal Revenue Code, certain portions of dividends paid by a foreign corporation 50% or more of which is owned by United States persons may be treated as income from sources within the United States provided that the foreign corporation has more than a small amount of income from sources within the United States. The Singapore taxes paid under the imputation system are paid by our Company and deemed to have been distributed to and paid by our shareholders. A U.S. Holder should not be subject to United States federal income tax on such amounts, and the holder will likely not be eligible for foreign tax credits for such amounts against its United States federal income tax liability.

Sale or Exchange of the Ordinary Shares

     Subject to the PFIC rules discussed below, upon the sale or exchange of an ordinary share, a U.S. Holder will generally recognize capital gain or loss equal to the difference between (i) the amount of cash proceeds and the fair market value of any property received on the sale or exchange and (ii) such holder’s adjusted tax basis in the ordinary share. Such capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period in the ordinary share is more than one year at the time of sale or exchange. Long-term capital gains recognized by certain non-corporate U.S. Holders, including individuals, will generally be subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. Such gain or loss generally will be treated as income or loss from within the United States for United States foreign tax credit purposes.

Passive Foreign Investment Company

     Special United States federal income tax rules apply to U.S. persons owning shares of a PFIC. A non-U.S. corporation is considered to be a PFIC for any taxable year if, applying certain look-through rules, either (1) at least 75% of its gross income is passive income or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income.

     We do not believe that we were a PFIC for our taxable fiscal year ended December 27, 2009. However, our PFIC status is a factual determination made after the close of each taxable year and thus there can be no assurance that we will not become a PFIC in our current taxable year or any future taxable year as a result of changes in our assets, income or business operations or fluctuations in the value of our ordinary shares.

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     If we were classified as a PFIC for any taxable year during which a U.S. Holder held ordinary shares, such U.S. Holder will be subject to special tax rules with respect to any “excess distribution” received by such U.S. Holder and any gain realized by such U.S. Holder from a sale or other disposition (including a pledge) of the ordinary shares, unless the U.S. Holder makes a “mark-to-market” election as discussed below. Under these special tax rules:

• The excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ordinary shares;

• The amount allocated to the current taxable year, and any taxable year in the U.S. Holder’s holding period prior to the first taxable year in which we became a PFIC, will be treated as ordinary income; and

• The amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

     If we are a PFIC for any year during which a U.S. Holder holds ordinary shares, we generally will continue to be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which such holder holds ordinary shares. If we cease to be a PFIC, a U.S. Holder may avoid some of the adverse effects of the PFIC regime by making a deemed sale election with respect to the ordinary shares. We do not intend to prepare or provide the information that would entitle a U.S. Holder to make a qualified electing fund election.

     If a U.S. Holder makes a mark-to-market election, such holder generally will include as ordinary income the excess, if any, of the fair market value of the ordinary shares at the end of each taxable year over their adjusted basis, and will be permitted an ordinary loss in respect of the excess, if any, of the adjusted basis of the ordinary shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of previously included in come as a result of the mark-to-market election). Any gain recognized on the sale or other disposition of ordinary shares will be treated as ordinary income. The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter on a qualified exchange or other market, as defined in the applicable U.S. Treasury Regulations. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to their investment in ordinary shares.

United States Information Reporting and Backup Withholding

     Dividend payments with respect to ordinary shares and proceeds from the sale, exchange or redemption of ordinary shares may be subject to information reporting to the Internal Revenue Service and possible United States backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on Internal Revenue Service Form W-9. U.S. Holders should consult their tax advisors regarding the application of the United States information reporting and backup withholding rules.

     Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s United States federal income tax liability, and such holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the Internal Revenue Service and furnishing any required information.

F. Dividends and Paying Agents

     Not applicable

G. Statements by Experts

     Not applicable

H. Documents on Display

     All documents relating to our Company which are referred to in this annual report are available at our registered office at 10 Ang Mo Kio Street 65, #05-17/20 Techpoint, Singapore 569059, Republic of Singapore.

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I. Subsidiary Information

     Not applicable

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to financial market risks, including changes in currency exchange rates and interest rates. To mitigate the currency exchange risks, a substantial majority of our revenue, material and equipment supplies are transacted in U.S. dollars. We may employ derivative instruments such as forward foreign currency swaps, foreign currency contracts and options and interest rate swaps to manage our foreign exchange and interest rate exposures. These instruments are generally used to reduce or eliminate the financial risks associated with our assets and liabilities and not for trading purposes.

Investment and Interest Rates

     Our exposure to market risk associated with changes in interest rates primarily relates to our investment portfolio and debt obligations. We place our investments in time deposits and marketable securities. We mitigate default risk by investing in marketable securities that are of at least an “A” rating, as assigned by an internationally recognized credit rating organization, and major Singapore banks and government-linked companies. We have no material cash flow exposure due to rate changes for cash equivalents and short-term investments. The fair value of fixed rate debts will vary as interest rates change. As of December 27, 2009, our short-term and long-term debt obligations for the $213.0 million of 6.75% senior notes due 2011 and $150.0 million of 7.5% senior notes due 2010 bear fixed interest rate. The 6.75% senior notes due 2011 and 7.5% senior notes due 2010 bear interest of 6.75% and 7.5% per annum, respectively.

Currency Exchange Rates

     A portion of our costs is denominated in various foreign currencies, like the Singapore dollar, the South Korean Won, the Chinese Renminbi, the Thai Baht, the Malaysian Ringgit, the New Taiwan dollar and the Japanese Yen. As a result, changes in the exchange rates of these currencies or any other applicable currencies to the U.S. dollar will affect our cost of goods sold and operating margins and could result in exchange losses. We have entered into foreign currency contracts to mitigate financial risks associated with payroll costs, materials costs and other costs denominated in Singapore dollars, South Korean Won, Chinese Reminbi and Malaysia Ringgit reduce our exposure from future exchange rate fluctuations.

     Based on our overall currency rate exposure, we have adopted a foreign currency hedging policy for committed or forecasted currency exposures. As of December 27, 2009, we had a series of foreign currency forward contracts with total outstanding contract value of approximately $121.6 million to hedge against fluctuation in Singapore dollars, South Korean Won, Chinese Renminbi and Malaysian Ringgit. We may utilize foreign currency swaps as well as foreign exchange forward contracts and options. These programs reduce, but do not always entirely eliminate, the impact of currency exchange movements. The goal of the hedging policy is to effectively manage risk associated with fluctuations in the value of the foreign currency, thereby making financial results more stable and predictable. However, we cannot assure you that any hedging policy we implement will be effective and we may experience reduced operating margins if any such policies are unsuccessful.

     We have performed sensitivity analyses as of December 28, 2008 and December 27, 2009 by measuring the change in fair values arising from a hypothetical 10% adverse movement in the exchange rates for all the currencies relative to the U.S. dollar, with all other variables held constant. The analyses cover our foreign currencies monetary denominated assets and liabilities. The foreign currency exchange rates we used were based on our closing exchange rates as of December 28, 2008 and December 27, 2009. The sensitivity analyses indicated that a hypothetical 10% adverse movement, after taking into account offsetting positions, would result in a foreign exchange loss of $0.4 million and $0.5 million as of December 28, 2008 and December 27, 2009, respectively.

     Currency, maturity, interest rate and fair value information relating to our marketable securities and, short-term and long-term debt are disclosed in Notes 1(l), 4, 14, 15 and 24 to our audited consolidated financial statements, respectively, included in “Item 18. Financial Statements”.

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Commodity Price

     We purchase certain raw materials in the normal course of business, which are affected by commodity prices. Therefore, we are exposed to some price volatility related to various market conditions outside our control. However, we employ various purchasing and pricing contract techniques in an effort to minimize volatility. Generally these techniques include setting in advance the price for products to be delivered in the future. We do not generally make use of financial instruments to hedge commodity prices, partly because of the contract pricing utilized. While price volatility can occur, which would impact profit margins, there are generally alternative suppliers available.

Limitations

     Fair value estimates are made at a specific point in time and are based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     None

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

     See “Item 10. Additional Information — C. Material Contracts” for a description of the rights of securities holders which remain unchanged.

ITEM 15. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding our required disclosure.

     Based on the foregoing, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 27, 2009, the end of the period covered by this annual report, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting

     Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Exchange Act.

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     Internal control over financial reporting refers to a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and members of our Board of Directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

     Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process, and it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     Management evaluated the effectiveness of our internal control over financial reporting as of December 27, 2009 using the framework set forth in the report of the Treadway Commission’s Committee of Sponsoring Organizations (“COSO”), “Internal Control — Integrated Framework.”

     Based on the foregoing, management has concluded that our internal control over financial reporting was effective as of December 27, 2009. Our independent registered public accounting firm, PwC, has issued an audit report on our internal control over financial reporting, which is included herein.

Changes to Internal Controls

     Management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, whether any changes in our internal control over financial reporting that occurred during our last fiscal year have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation, management has concluded that no such changes have occurred.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

     Our Board of Directors has determined that Mr. R. Douglas Norby qualifies as an “audit committee financial expert” as defined in Item 16A of Form 20-F and as an independent director under Rule 10A-3 under the Exchange Act and for purposes of the Singapore Code of Corporate Governance 2005.

ITEM 16B. CODE OF ETHICS

     Our Company has built a reputation of integrity and ethical business practices and gained credibility and trust from our stockholders, customers, suppliers and employees over time. We have adopted a code of business conduct and ethics that is designed to qualify as a “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and is applicable to our employees, officers and non-employee directors, including our Chief Executive Officer, Chief Financial Officer, principal accounting officer or controller, and persons performing similar function. We have posted our code of

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ethics on our internal company website, conducted company-wide awareness workshops and have included it within our new employee orientation programs. We will provide it free of charge to the general public upon request.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     PwC has been serving as our independent registered public accounting firm from August 2004.

     As part of PwCs’ review of its independence with respect to our Company in connection with the audit of our consolidated financial statements for 2007, PwC identified the following activity that required consideration about PwC’s independence. PricewaterhouseCoopers Russia (“PwC Russia”) provided an executive recruitment service to an entity that is affiliated to our Company by virtue of being entities under common control of Temasek. Our Company does not otherwise have any relationship with the entity. The scope of service provided by PwC Russia to such entity included the testing of the accountancy and tax competency of an individual who was being proposed the post of chief accountant. The fee for this engagement was approximately $4,000. Our Audit Committee and PwC each concluded that PwC Russia violated the SEC’s auditor independence rules. As part of PwCs’ review of its independence with respect to our Company in connection with the audit of our consolidated financial statements for 2008, PwC identified a member of the PwC audit engagement team held 250 shares in Singapore Telecommunications Ltd (“SingTel”), an affiliated company of our Company. Our Audit Committee and PwC each concluded that the said member of the audit engagement team violated the SEC’s auditor independence rules. Consequently, our Audit Committee conducted an inquiry into, and an evaluation of, the facts and circumstances surrounding the matters presented in 2007 and 2008, respectively. Based upon all the facts and circumstances, PwC and our Audit Committee share the view that, throughout the audit and professional engagement period and continuing to date, PwC has been and continues to be capable of exercising objective and impartial judgment on all issues encompassed within the audit engagement. Our Audit Committee understands that the PwC audit team believed they were independent. After the inquiries and evaluations, our Audit Committee and PwC each concluded that under the general standard of auditor independence as set out in Rule 2-01(b) of Regulation S-X under the Exchange Act, there has been no impairment of PwC’s independence for the 2007 and 2008 audit. PwC concluded, and our Audit Committee concurs, that PwC’s capacity for objective judgment was not and is not diminished and that the investing public would not perceive that an impairment of independence affecting the integrity of the financial statements for 2007 and 2008 has occurred.

     The following table shows the fees we paid or accrued for the audit and other services provided by PwC for 2008 and 2009.

	Year Ended
	December 28,		December 27,
	2008		2009
	(In thousands)
Audit fees	$	1,679	$	1,223
Audit-related fees		227		35
Tax fees		104		93
All other fees		—		—
Total	$	2,010	$	1,351

     Audit Fees. This category consists of fees billed for the audit of financial statements and internal control over financial reporting, quarterly review of financial statements and other audit services, which are normally provided by the independent auditors in connection with statutory and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements and include the group audit; statutory audits required by non-U.S. jurisdictions; comfort letters and consents; attest services; and assistance with and review of documents filed with the SEC.

     Audit-Related Fees. This category consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements or that are traditionally performed by the external auditor, and include internal control reviews of new systems, program and projects; review of security controls and operational effectiveness of systems; due diligence related to acquisitions; accounting assistance; audits, offering of convertible notes and audits in connection with proposed or completed acquisitions; and employee benefit plan audits.

     Tax Fees. This category includes fees billed for tax compliance services, including the preparation of original and amended tax returns and claims for refund; tax consultations, such as assistance and representation in connection with tax audits and appeals, tax advice related to mergers and acquisitions, transfer pricing, and requests for rulings or technical advice from taxing authorities and tax planning services.

105

     All Other Fees. No fees were paid or billed by PwC with respect to any other services which have not been described above in 2008 and 2009.

Audit Committee Pre-approval Process

     Our Audit Committee reviews and pre-approves the scope and the cost of all audit and permissible non-audit services performed by the independent auditors, other than those for de minimus services which are approved by our Audit Committee prior to the completion of the audit. All of the services provided by PwC during the last three fiscal years have been approved by our Audit Committee.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE

     Not applicable

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

     Neither we, nor any affiliated purchaser, made any purchase of our equity securities for the year ended December 27, 2009.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

     Not applicable

ITEM 16G. CORPORATE GOVERNANCE

     Not applicable

ITEM 17.    FINANCIAL STATEMENTS

     See Item 18 for a list of the Financial Statements filed as part of this annual report.

ITEM 18.    FINANCIAL STATEMENTS

     The following financial statements are filed as part of this annual report, together with the report of our independent registered public accounting firm:

     Report of Independent Registered Public Accounting Firm

     Consolidated Balance Sheets as of December 28, 2008 and December 27, 2009

     Consolidated Statements of Operations for 2007, 2008 and 2009

     Consolidated Statements of Equity and Comprehensive Income for 2007, 2008 and 2009

     Consolidated Statements of Cash Flows for 2007, 2008 and 2009

     Notes to the Consolidated Financial Statements

106

ITEM 19. EXHIBITS

     The following exhibits are filed as part of this annual report:

1.1	Memorandum of Association of STATS ChipPAC Ltd. — incorporated by reference to Exhibit 1.1 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
1.2.**	Amended Articles of Association of STATS ChipPAC Ltd.
2.1	Specimen ordinary share certificate of STATS ChipPAC Ltd. issued on and after January 30, 2006 in respect of transfers of shares issued before January 30, 2006 — incorporated by reference to Exhibit 3.1 of Amendment No. 2 to the Registration Statement on Form 8-A (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on May 9, 2006
2.1.1	Specimen ordinary share certificate of STATS ChipPAC Ltd. issued on and after January 30, 2006 in respect of new issuances of shares issued after January 30, 2006 — incorporated by reference to Exhibit 3.2 of Amendment No. 2 to the Registration Statement on Form 8-A (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on May 9, 2006
4.1	Lease Agreement dated November 18, 1996 by and between the Housing and Development Board and ST Assembly Test Services Pte Ltd — incorporated by reference to Exhibit 10.4 of Amendment No. 1 to Form F-1 (File No. 333-93661) of ST Assembly Test Services Ltd, as filed with the SEC on January 3, 2000
4.2#	Amendment Agreement dated April 22, 2003 renewing the Immunity Agreement dated October 18, 1996 by and between Motorola Inc. and ST Assembly Test Services Pte Ltd — incorporated by reference to Exhibit 4.12 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.3	Second Amendment to Immunity Agreement dated September 19, 2006 amending the Immunity Agreement dated October 18, 1996, as amended April 22, 2003 by and between Freescale Semiconductor, Inc. and STATS ChipPAC, Ltd. — incorporated by reference to Exhibit 4.6 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.4	Strategic Assistance Loan Agreement dated June 20, 2003 by and between ST Assembly Test Services Ltd and Simmtech Co. Ltd — incorporated by reference to Exhibit 4.16 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.5	Yangdo Tambo Agreement dated June 20, 2003 by and between ST Assembly Test Services Ltd and Simmtech Co. Ltd — incorporated by reference to Exhibit 4.17 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.6	Pledge Agreement dated June 20, 2003 by and between ST Assembly Test Services Ltd and Simmtech Co. Ltd — incorporated by reference to Exhibit 4.18 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.7	Loan Agreement dated December 26, 2003 by and among ST Assembly Test Services Ltd, Simmtech Co. Ltd and Mr. Se-Ho Chun — incorporated by reference to Exhibit 4.19 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.8	Yangdo Tambo Agreement dated December 26, 2003 by and between ST Assembly Test Services Ltd and Simmtech Co. Ltd — incorporated by reference to Exhibit 4.20 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.9	Share Pledge Agreement dated December 26, 2003 by and between ST Assembly Test Services Ltd and Mr. Se-Ho Chun — incorporated by reference to Exhibit 4.21 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.10	Factory Kun-Mortgage Agreement dated December 26, 2003 by and between ST Assembly Test Services Ltd and Simmtech Co. Ltd — incorporated by reference to Exhibit 4.22 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.11	Base Capacity and Continuing Support Agreement dated December 26, 2003 by and between ST Assembly Test Services Ltd and Simmtech Co. Ltd — incorporated by reference to Exhibit 4.23 of Form 20-F (File No. 333-75080) of ST Assembly Test Services Ltd, as filed with the SEC on March 19, 2004
4.12	Indenture dated November 18, 2004 by and between STATS ChipPAC Ltd. and U.S. Bank National Association relating to the 6.75% Senior Notes Due 2011 — incorporated by reference to Exhibit 4.40 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 18, 2005
4.13	Subsidiary Guarantee Agreement dated November 18, 2004 among STATS ChipPAC Ltd., the Subsidiary Guarantors party thereto and U.S. Bank National Association relating to the 6.75% Senior Notes Due 2011 — incorporated by reference to Exhibit 4.43 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 18, 2005
4.14	Supplemental Subsidiary Guarantee Agreement dated as of February 21, 2006 among STATS ChipPAC Ltd., the Subsidiary Guarantors party thereto and U.S. Bank National Association with respect to the 6.75% Senior Notes Due 2011 — incorporated by reference to Exhibit 4.49 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on February 28, 2006
4.15	Supplemental Subsidiary Guarantee Agreement dated as of September 18, 2007 among STATS ChipPAC Ltd., the Subsidiary Guarantors party thereto and U.S. Bank National Association with respect to the 6.75% Senior Notes due 2011 — incorporated by reference to Exhibit 4.24 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.16	Indenture dated as of July 19, 2005 by and between STATS ChipPAC Ltd. and U.S. Bank National Association relating to the 7.5% Senior Notes Due 2010 — incorporated by reference to Exhibit 4.1 of Form 6-K (File No. 333-75080) of STATS ChipPAC

107

	Ltd., as filed with the SEC on August 25, 2005
4.17	Subsidiary Guarantee Agreement dated as of July 19, 2005 among STATS ChipPAC Ltd., the Subsidiary Guarantors party thereto and U.S. Bank National Association relating to the 7.5% Senior Notes Due 2010 — incorporated by reference to Exhibit 4.3 of Form 6-K (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on August 25, 2005
4.18	Supplemental Subsidiary Guarantee Agreement dated as of February 21, 2006 among STATS ChipPAC Ltd., the Subsidiary Guarantors party thereto and U.S. Bank National Association with respect to the 7.5% Senior Notes Due 2010 — incorporated by reference to Exhibit 4.48 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on February 28, 2006
4.19	Supplemental Subsidiary Guarantee Agreement dated as of September 18, 2007 among STATS ChipPAC Ltd., the Subsidiary Guarantors party thereto and U.S. Bank National Association with respect to the 7.5% Senior Notes Due 2010 — incorporated by reference to Exhibit 4.28 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.20	STATS ChipPAC Ltd. Substitute Equity Incentive Plan — incorporated by reference to Exhibit 4.4 to Post-Effective Amendment No. 1 on Form S-8 (File No. 333-114232) of STATS ChipPAC Ltd., as filed with the SEC on August 25, 2004
4.21	STATS ChipPAC Ltd. Substitute Share Purchase and Option Plan — incorporated by reference to Exhibit 4.5 to Post-Effective Amendment No. 1 on Form S-8 (File No. 333-114232) of STATS ChipPAC Ltd., as filed with the SEC on August 25, 2004
4.22	STATS ChipPAC Ltd. Share Option Plan — incorporated by reference to Exhibit 4.28 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.23	STATS ChipPAC Ltd. Restricted Share Plan — incorporated by reference to Appendix 2 to STATS ChipPAC Ltd.’s Proxy Statement which was filed as Exhibit 99.1 on Form 6-K (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 30, 2006
4.24**	STATS ChipPAC Ltd. Performance Share Plan 2009
4.25**	STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors
4.26	Terms and Conditions of Appointment of Tan Lay Koon as President and Chief Executive Officer of STATS ChipPAC Ltd. dated August 5, 2004 by and between Tan Lay Koon and STATS ChipPAC Ltd.— incorporated by reference to Exhibit 4.46 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on February 28, 2006
4.27	Letter Amendment to Terms and Conditions of Appointment of Tan Lay Koon as President and Chief Executive Officer of STATS ChipPAC Ltd. dated October 26, 2006 — incorporated by reference to Exhibit(e)(8) of Schedule 14D-9 (File No. 005-60763) of STATS ChipPAC Ltd., as filed with the SEC on March 30, 2007
4.28	Letter Amendment to Terms and Conditions of Appointment of Tan Lay Koon as President and Chief Executive Officer of STATS ChipPAC Ltd. dated October 26, 2007 — incorporated by reference to Exhibit 4.37 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.29	Subscription Agreement dated June 22, 2006 among STATS ChipPAC Ltd., China Resources Logic Limited, Micro Assembly Technologies Limited and Wuxi China Resources Microelectronics (Holdings) Limited — incorporated by reference to Exhibit 4.41 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.30	Deed of Indemnity dated June 22, 2006 among STATS ChipPAC Ltd., China Resources Logic Limited, Micro Assembly Technologies Limited and Wuxi China Resources Microelectronics (Holdings) Limited — incorporated by reference to Exhibit 4.42 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.31	Joint Venture Agreement dated June 22, 2006 among STATS ChipPAC Ltd., China Resources Logic Limited, Wuxi China Resources Microelectronics (Holdings) Limited, Micro Assembly Technologies Limited and Wuxi CR Micro-Assembly Technology Ltd. — incorporated by reference to Exhibit 4.43 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.32	Asset Sale and Purchase Agreement dated June 22, 2006 among STATS ChipPAC Shanghai Co., Ltd., STATS ChipPAC Ltd., Wuxi CR Micro-Assembly Technology Ltd. and China Resources Logic Limited — incorporated by reference to Exhibit 4.44 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.33	Amendment Number One dated July 14, 2006 to the Asset Sale and Purchase Agreement dated June 22, 2006 among STATS ChipPAC Shanghai Co., Ltd., STATS ChipPAC Ltd., Wuxi CR Micro-Assembly Technology Ltd. and China Resources Logic Limited — incorporated by reference to Exhibit 4.45 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.34	Manufacturer’s Representative Agreement dated June 22, 2006 among Wuxi CR Micro-Assembly Technology Ltd., China Resources Logic Limited, STATS ChipPAC (BVI) Limited and STATS ChipPAC Ltd. — incorporated by reference to Exhibit 4.46 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.35	English language translation of Korean language US$25,000,000 Term Loan Agreement dated May 29, 2006 by and between STATS ChipPAC Korea Ltd. and Hana Bank — incorporated by reference to Exhibit 4.48 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.36	English language summary of Chinese language NT$1.8 Billion Syndicated Loan Agreement dated March 2, 2004 by and between STATS ChipPAC Taiwan Semiconductor Corporation (formerly known as Winstek Semiconductor Corporation) and Mega Bank Limited — incorporated by reference to Exhibit 4.49 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 12, 2007
4.37	English language summary of Chinese language NT$3.6 Billion Syndicated Loan Agreement dated August 18, 2006 by and between STATS ChipPAC Taiwan Semiconductor Corporation (formerly known as Winstek Semiconductor Corporation) and Taishin Bank Limited — incorporated by reference to Exhibit 4.50 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd.,

108

	as filed with the SEC on March 12, 2007
4.38	Agreement for the Sale and Purchase of Assets dated April 23, 2007 by and between Schott Advanced Packaging Singapore Pte Ltd. and STATS ChipPAC Ltd. — incorporated by reference to Exhibit 4.48 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.39	Asset Sale and Purchase Agreement dated May 21, 2007 among STATS ChipPAC Malaysia Sdn. Bhd. and Ningbo Mingxin Microelectronics Co. Ltd. and Daheng New Epoch Technology, Inc. — incorporated by reference to Exhibit 4.49 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.40	Asset Purchase Agreement dated as of July 25, 2007, among STATS ChipPAC (Thailand) Limited, STATS ChipPAC Ltd., LSI (Thai) Ltd. and LSI Corporation — incorporated by reference to Exhibit 4.50 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.41	Amendment No. 1 dated October 2, 2007, to Asset Purchase Agreement, dated as of July 25, 2007, among STATS ChipPAC (Thailand) Limited, STATS ChipPAC Ltd., LSI (Thai) Ltd. and LSI Corporation — incorporated by reference to Exhibit 4.51 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.42	Promissory Note, dated October 2, 2007 issued by STATS ChipPAC (Thailand) Limited — incorporated by reference to Exhibit 4.52 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.43	US$50,000,000 Uncommitted Facility Agreement dated November 23, 2007 by and between Bank of America, N.A., Singapore Branch and STATS ChipPAC Ltd. — incorporated by reference to Exhibit 4.53 of Form 20-F (File No. 333-75080) of STATS ChipPAC Ltd., as filed with the SEC on March 7, 2008
4.44**	English translation of Chinese language US$3,000,000 Loan Contract dated June 30, 2009 by and between STATS ChipPAC Shanghai Co., Ltd. and Bank of Communications Co., Ltd.
4.45**	English translation of Chinese language US$12,000,000 Loan Contract dated June 30, 2009 by and between STATS ChipPAC Shanghai Co., Ltd. and Bank of Communications Co., Ltd.
4.46**	US$25,000,000 Uncommitted Facility Agreement dated September 4, 2009 by and between STATS ChipPAC Korea Ltd. and DBS Bank Ltd
8.1	List of subsidiaries — incorporated by reference to Exhibit 8.1 of Form 20-F (File No. 000-29103) of STATS ChipPAC Ltd., as filed with the SEC on March 9, 2009
12.1**	Certification by the Chief Executive Officer pursuant to 17 CFR 240. 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2**	Certification by the Chief Financial Officer pursuant to 17 CFR 240. 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**	Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**	Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1**	Consent of PricewaterhouseCoopers LLP, Singapore, independent registered public accounting firm

#	Certain portions of this exhibit have been omitted pursuant to a confidential treatment order of the SEC. The omitted portions have been filed separately with the SEC.
**	Filed herewith.

109

SIGNATURES

     The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Date: March 5, 2010

STATS CHIPPAC LTD.
By:	/s/ Tan Lay Koon
Name	Tan Lay Koon
Title:	President and Chief Executive Officer
By:	/s/ John Lau Tai Chong
Name:	John Lau Tai Chong
Title:	Chief Financial Officer

110

STATS CHIPPAC LTD. AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

	Page
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets		F-3
Consolidated Statements of Operations		F-4
Consolidated Statements of Equity and Comprehensive Income		F-5
Consolidated Statements of Cash Flows		F-7
Notes to the Consolidated Financial Statements		F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
STATS ChipPAC Ltd.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of equity and comprehensive income and of cash flows present fairly, in all material respects, the financial position of STATS ChipPAC Ltd. and its subsidiaries at December 27, 2009 and December 28, 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 27, 2009 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 27, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Notes 1(bb) to the financial statements, the Company changed its method of accounting for uncertain tax positions in 2007.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP
Public Accountants and Certified Public Accountants

Singapore
March 5, 2010

F-2

STATS CHIPPAC LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
In thousands of U.S. Dollars (except per share data)

		December 28,			December 27,
	Note	2008			2009
ASSETS
Current assets:
Cash and cash equivalents	3	$	295,916		$	288,683
Short-term marketable securities	4		41,314			62,512
Accounts receivable, net	5		139,520			208,766
Short-term amounts due from affiliates	2		10,791			20,895
Other receivables	6		8,357			11,555
Inventories	7		60,717			61,859
Prepaid expenses and other current assets	8		14,693			19,765
Total current assets			571,308			674,035
Long-term marketable securities	4		15,587			16,929
Long-term amounts due from affiliates	2		13,726			—
Property, plant and equipment, net	9		1,216,342			1,115,497
Investment in equity investee	2		9,001			7,743
Intangible assets	10		44,762			39,993
Goodwill	11		551,132			551,132
Long-term restricted cash			1,012			384
Prepaid expenses and other non-current assets	8		24,193			21,227
Total assets		$	2,447,063		$	2,426,940
LIABILITIES AND EQUITY
Current liabilities:
Accounts and other payable		$	118,227		$	133,532
Payables related to property, plant and equipment purchases			30,704			49,172
Accrued operating expenses	12		148,069			100,997
Income taxes payable			3,379			2,380
Short-term borrowings	14		50,000			56,000
Short-term amounts due to affiliates	2		1,388			17
Current installments of long-term debts	15		26,953			168,786
Total current liabilities			378,720			510,884
Long-term debts, excluding current installments	15		396,500			233,181
Other non-current liabilities	17		64,144			59,329
Total liabilities			839,364			803,394
STATS ChipPAC Ltd. Shareholders’ Equity:
Ordinary shares — Issued ordinary shares — 2,202,218,293 in 2008 and 2009	18, 19		2,035,235			2,035,573
Accumulated other comprehensive loss	20		(12,308	)		(6,687	)
Accumulated deficit			(474,270	)		(464,217	)
Total shareholders’ equity attributable to STATS ChipPAC Ltd.			1,548,657			1,564,669
Noncontrolling interest			59,042			58,877
Total equity			1,607,699			1,623,546
Commitments and contingencies	21
Total liabilities and equity		$	2,447,063		$	2,426,940

See accompanying notes to consolidated financial statements.

F-3

STATS CHIPPAC LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands of U.S. Dollars (except per share data)

		Year Ended
		December 30,			December 28,			December 27,
	Note	2007			2008			2009
Net revenues		$	1,651,560		$	1,658,188		$	1,325,685
Cost of revenues			(1,330,284	)		(1,383,797	)		(1,117,308	)
Gross profit			321,276			274,391			208,377
Operating expenses:
Selling, general and administrative			112,593			118,337			95,516
Research and development			34,918			37,825			43,358
Restructuring charges	22		990			19,790			16,072
Equipment impairment			—			21,091			—
Accelerated share-based compensation			—			1,562			—
Tender offer expenses			10,922			—			—
Held for sale asset impairment			1,725			—			—
Total operating expenses			161,148			198,605			154,946
Operating income			160,128			75,786			53,431
Other income (expense), net:
Interest income			7,258			5,685			2,169
Interest expense			(40,450	)		(35,986	)		(31,056	)
Foreign currency exchange gain (loss)			2,487			5,247			(6,469	)
Equity income (loss) from investment in equity investee			102			(1,437	)		(1,321	)
Other non-operating income (expense), net	23		(442	)		27			(2,016	)
Total other expense, net			(31,045	)		(26,464	)		(38,693	)
Income before income taxes			129,083			49,322			14,738
Income tax expense	13		(29,581	)		(19,172	)		(3,712	)
Net income			99,502			30,150			11,026
Less: Net income attributable to the noncontrolling interest			(5,818	)		(4,448	)		(973	)
Net income attributable to STATS ChipPAC Ltd.		$	93,684		$	25,702		$	10,053
Net income per ordinary share attributable to STATS ChipPAC Ltd.:
— basic		$	0.05		$	0.01		$	0.00
— diluted		$	0.04		$	0.01		$	0.00
Net income per ADS attributable to STATS ChipPAC Ltd.:
— basic		$	0.46			—			—
— diluted		$	0.44			—			—
Ordinary shares (in thousands) used in per ordinary share calculation:
— basic			2,032,962			2,143,934			2,202,218
— diluted			2,188,687			2,146,249			2,202,230
ADS (in thousands) used in per ADS calculation:
— basic			203,296			—			—
— diluted			218,869			—			—

See accompanying notes to consolidated financial statements.

F-4

STATS CHIPPAC LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME

In thousands of U.S. Dollars

				Attributable to STATS ChipPAC Ltd.
							Accumulated						Total Equity
							Other						Attributable to
	Comprehensive						Comprehensive			Accumulated			STATS ChipPAC			Noncontrolling
	Income			Ordinary Shares			Loss			Deficit			Ltd.			Interest			Total Equity
				No.
				(In thousands)
Balances at December 31, 2006					2,002,814	1,847,002		(7,714	)		(593,138	)		1,246,150			57,946			1,304,096
Adjustment for initial adoption of FIN 48					—	—		—			(518	)		(518	)		—			(518	)
Balances at December 31, 2006					2,002,814	1,847,002		(7,714	)		(593,656	)		1,245,632			57,946			1,303,578
Share issuances					27,794	19,851		—			—			19,851			—			19,851
Conversion of convertible subordinated notes					16,726	15,500		—			—			15,500			—			15,500
Share-based compensation					—	8,869		—			—			8,869			—			8,869
Effect of subsidiary’s equity transaction					—	324		—			—			324			774			1,098
Dividends paid					—	—		—			—			—			(5,883	)		(5,883	)
Comprehensive income:
Net income		99,502			—	—		—			93,684			93,684			5,818			99,502
Other comprehensive income (loss) :
Unrealized gain on available-for-sale marketable securities		9			—	—		9			—			9			—			9
Realized loss on available-for-sale marketable securities		131			—	—		131			—			131			—			131
Unrealized loss on hedging instruments		1,736			—	—		1,736			—			1,736			—			1,736
Realized loss on hedging instruments included in net income		(2,034	)		—	—		(2,034	)		—			(2,034	)		—			(2,034	)
Foreign currency translation adjustment		1,409			—	—		267			—			267			1,142			1,409
Other comprehensive income		1,251
Comprehensive income attributable to the noncontrolling interest		(6,960	)
Comprehensive income attributable to STATS ChipPAC Ltd.		93,793
Balance at December 30, 2007					2,047,334	1,891,546		(7,605	)		(499,972	)		1,383,969			59,797			1,443,766

See accompanying notes to consolidated financial statements.

F-5

STATS CHIPPAC LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME (Continued)

In thousands of U.S. Dollars (except per share data)

				Attributable to STATS ChipPAC Ltd.
								Accumulated						Total Equity
								Other						Attributable to
	Comprehensive							Comprehensive			Accumulated			STATS ChipPAC			Noncontrolling
	Income			Ordinary Shares				Loss			Deficit			Ltd.			Interest			Total Equity
				No.
				(In thousands)
Share issuances					9,745	7,833			—			—			7,833			—			7,833
Conversion of convertible subordinated notes					145,139	134,500			—			—			134,500			—			134,500
Share-based compensation					—	3,570			—			—			3,570			—			3,570
Effect of subsidiary’s equity transaction					—	(60	)		—			—			(60	)		247			187
Dividends paid					—	—			—			—			—			(4,016	)		(4,016	)
Reclassification of share-based compensation to liability					—	(2,154	)		—			—			(2,154	)		—			(2,154	)
Comprehensive income:
Net income		30,150			—	—			—			25,702			25,702			4,448			30,150
Other comprehensive income (loss)
Unrealized gain on available-for-sale marketable securities		327			—	—			327			—			327			—			327
Realized gain on available-for-sale marketable securities		(36	)		—	—			(36	)		—			(36	)		—			(36	)
Unrealized loss on hedging instruments		(14,463	)		—	—			(14,463	)		—			(14,463	)		—			(14,463	)
Realized loss on hedging instruments		9,972			—	—			9,972			—			9,972			—			9,972
Foreign currency translation adjustment		(1,937	)		—	—			(503	)		—			(503	)		(1,434	)		(1,937	)
Other comprehensive loss		(6,137	)		—
Comprehensive income attributable to the noncontrolling interest		(3,014	)
Comprehensive income attributable to STATS ChipPAC Ltd.		20,999
Balance at December 28, 2008					2,202,218	2,035,235			(12,308	)		(474,270	)		1,548,657			59,042			1,607,699
Share-based compensation					—	4			—			—			4			—			4
Effect of subsidiary’s equity transaction					—	334			—			—			334			(202	)		132
Dividends paid					—	—			—			—			—			(2,248	)		(2,248	)
Comprehensive income:
Net income		11,026			—	—			—			10,053			10,053			973			11,026
Other comprehensive income (loss)
Unrealized gain on available-for-sale marketable securities		849			—	—			849			—			849			—			849
Realized gain on available-for-sale marketable securities		(10	)		—	—			(10	)		—			(10	)		—			(10	)
Unrealized loss on hedging instruments		(2,216	)		—	—			(2,216	)		—			(2,216	)		—			(2,216	)
Realized loss on hedging instruments		5,649			—	—			5,649			—			5,649			—			5,649
Foreign currency translation adjustment		2,661			—	—			1,349			—			1,349			1,312			2,661
Other comprehensive income		6,933
Comprehensive income attributable to the noncontrolling interest		(2,285	)
Comprehensive income attributable to STATS ChipPAC Ltd.		15,674
Balance at December 27, 2009					2,202,218	2,035,573			(6,687	)		(464,217	)		1,564,669			58,877			1,623,546

See accompanying notes to consolidated financial statements.

F-6

STATS CHIPPAC LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands of U.S. Dollars

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Cash Flows From Operating Activities
Net income attributable to STATS ChipPAC Ltd.	$	93,684		$	25,702		$	10,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		254,352			283,691			266,630
Amortization of leasing prepayments		11			—			—
Debt issuance cost amortization		2,561			2,737			1,719
Equipment impairment		—			21,091			—
(Gain) loss on sale of property, plant and equipment		(17	)		1,123			1,212
Held for sale asset impairment		1,725			—			—
Accretion of discount on convertible notes		4,830			66			—
Gain from repurchase of senior notes		—			—			(276	)
Foreign currency exchange (gain) loss		724			(1,555	)		965
Share-based compensation expense		8,869			3,570			501
Deferred income taxes		(3,675	)		5,511			1,725
Net income attributable to the noncontrolling interest		5,818			4,448			973
Equity loss (income) from investment in equity investee		(102	)		1,437			1,321
Others		1,604			4,178			1,414
Changes in operating working capital:
Accounts receivable		(27,581	)		131,840			(69,246	)
Amounts due from affiliates		(13,638	)		(8,373	)		3,622
Inventories		29,599			22,595			(1,142	)
Other receivables, prepaid expenses and other assets		7,112			(2,951	)		(4,466	)
Accounts payable, accrued operating expenses and other payables		44,030			(75,322	)		(38,762	)
Amounts due to affiliates		1,606			(263	)		(1,371	)
Net cash provided by operating activities		411,512			419,525			174,872
Cash Flows From Investing Activities
Proceeds from sales of marketable securities	$	19,660		$	29,755		$	15,663
Proceeds from maturity of marketable securities		23,599			50,141			31,736
Purchases of marketable securities		(27,450	)		(93,094	)		(67,634	)
Acquisition of intangible assets		(6,762	)		(12,871	)		(5,032	)
Acquisition of business		(100,000	)		—			—
Purchases of property, plant and equipment		(232,288	)		(278,899	)		(140,754	)
Proceeds from sale of assets held for sale		21,829			19,108			593
Others, net		2,324			2,146			946
Net cash used in investing activities		(299,088	)		(283,714	)		(164,482	)
Cash Flows From Financing Activities
Repayment of short-term debts	$	(6,549	)	$	(5,035	)	$	(5,035	)
Repayment of long-term debts and promissory notes		(170,518	)		(33,888	)		(38,709	)
Proceeds from issuance of shares		19,851			6,152			—
Repurchase and redemption of senior and convertible notes		(36,800	)		(22,057	)		(2,000	)
Proceeds from promissory notes		50,000			—			—
Proceeds from bank borrowings		82,857			4,735			29,840
(Increase) decrease in restricted cash		(631	)		600			603
Grants received		—			340			—
Capital lease payments		(3,680	)		—			—
Distribution to noncontrolling interest in subsidiary		(4,980	)		(4,312	)		(2,194	)
Net cash used in financing activities		(70,450	)		(53,465	)		(17,495	)
Net increase (decrease) in cash and cash equivalents		41,974			82,346			(7,105	)
Effect of exchange rate changes on cash and cash equivalents		30			109			(128	)
Cash and cash equivalents at beginning of the year		171,457			213,461			295,916
Cash and cash equivalents at end of the year	$	213,461		$	295,916		$	288,683
Supplementary Cash Flow Information
Interest paid	$	31,652		$	31,497		$	28,430
Income taxes paid		6,158			14,280			10,735
Non-cash items
Issuance of shares on conversion of convertible notes	$	15,500		$	134,500		$	—

See accompanying notes to consolidated financial statements.

F-7

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In thousands of U.S. Dollars (except per share data)

1. Background and Summary of Significant Accounting Policies

(a) Business and Organization

STATS ChipPAC Ltd. (“STATS ChipPAC” and together with its subsidiaries, the “Company”) is an independent provider of a full range of semiconductor test and packaging services. The Company has operations in Singapore, South Korea, China, Thailand, Malaysia, Taiwan, the United Kingdom, the Netherlands, Japan and in the United States of America, its principal market.

In 2007, Winstek Semiconductor Corporation changed its name to STATS ChipPAC Taiwan Semiconductor Corporation. The Company owned approximately 52% of STATS ChipPAC Taiwan Semiconductor Corporation’s total shares outstanding as of December 27, 2009.

Temasek Holdings (Private) Limited (“Temasek”), through its wholly-owned subsidiary, Singapore Technologies Semiconductors Pte Ltd (“STSPL”), beneficially owned approximately 83.8% of the Company as of December 27, 2009. Temasek, a private limited company incorporated in Singapore, is wholly-owned by the Minister for Finance (Incorporated) of Singapore, a body constituted by the Minister for Finance (Incorporation) Act (Cap. 183).

Proposed Capital Reduction Exercise and Related Financing Transaction

In January 2008, the Company announced its intention to effect a proposed capital reduction to return surplus share capital in an amount of up to $813,000 to the shareholders. At an extraordinary general meeting held on March 17, 2008, the shareholders approved the proposed capital reduction.

Among other conditions, the proposed capital reduction was subject to and conditional upon the Company being able to obtain adequate debt to fund the cash distribution pursuant to the capital reduction and the repayment of certain of the outstanding debt on terms and conditions acceptable to the Company. The amount of the cash distribution would accordingly have been determined based on the proceeds of such debt financing made available to the Company. In furtherance of the proposed capital reduction, the Company commenced a cash tender offer and consent solicitation in respect of its senior notes in June 2008 but terminated it in August 2008 because the financing condition under the tender offer and consent solicitation was not satisfied.

In February 2009, the Company announced that it would not proceed with the proposed capital reduction as previously approved at the March 2008 shareholders’ meeting as given the economic environment at that time, the Company was not able to obtain financing to fund the cash distribution and the repayment of certain outstanding debts on terms and conditions acceptable to the Company.

Acquisition of LSI Corporation’s assembly and test facility in Thailand

In October 2007, the Company consummated the previously announced definitive agreement with LSI Corporation (“LSI”) to acquire LSI’s assembly and test operation in Thailand for an aggregate purchase price of approximately $100,000, payable over the next four years. The Company financed the initial payment of $50,000 of the purchase consideration with the Company’s cash and cash equivalents, and issued promissory notes bearing interest of 6.0% per annum for the balance $46,800 purchase price, after taking into account a contractual net-off of $3,200 of certain receivables from LSI. The purchase price was assigned primarily to property, plant and equipment, and goodwill. The impact of the acquisition was not material to the Company’s consolidated financial position and results of operations.

F-8

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Temasek’s Subsidiary, Singapore Technologies Semiconductors Pte Ltd’s Tender Offer

In March 2007, STSPL, a wholly-owned subsidiary of Temasek, announced its intention to launch a voluntary conditional cash tender offer for the ordinary shares and American Depositary Shares (“ADSs”) of the Company that STSPL did not already own. The tender offer also included an offer by STSPL for the Company’s outstanding $115,000 aggregate principal amount of zero coupon convertible notes due 2008 and $150,000 aggregate principal amount of 2.5% convertible subordinated notes due 2008. Concurrently with the tender offer, STSPL made an options proposal to all holders of options granted under STATS ChipPAC share option plans.

In May 2007, the tender offer closed with STSPL and its concert parties holding 83.1% of the outstanding ordinary shares and ADSs (excluding the ordinary shares from the potential conversion of the $134,500 aggregate principal amount of the 2.5% convertible subordinated notes due 2008 acquired by STSPL) and $134,500 aggregate principal amount of the 2.5% convertible subordinated notes due 2008. The balance $15,500 outstanding principal amount of the 2.5% convertible subordinated notes due 2008 was converted by its holder into ADS in May 2007.

As of December 27, 2009, Temasek, through its wholly-owned subsidiary, STSPL, beneficially owned 1,845,715,689 ordinary shares, representing 83.8% of the Company’s ordinary shares, following STSPL’s conversion of its entire $134,500 of the Company’s 2.5% convertible subordinated notes due 2008 into 145,138,660 ordinary shares in May 2008.

In 2007, the Company recorded tender offer expenses of $10,922, consisting of investment banking, legal, accounting, insurance, printing and other costs associated with the tender offer. No tender offer expenses were incurred in 2008 and 2009.

(b) Fiscal Year

STATS ChipPAC’s 52-53 week fiscal year ends on the Sunday nearest and prior to December 31. STATS ChipPAC’s fiscal quarters end on a Sunday and are generally thirteen weeks in length. Fiscal year 2009, a 52-week year, ended on December 27, 2009, fiscal year 2008, a 52-week year, ended on December 28, 2008, and fiscal year 2007, a 52-week year, ended on December 30, 2007. Unless otherwise stated, all years and dates refer to STATS ChipPAC’s fiscal years.

(c) Accounting Principles

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) consistently applied for all periods.

(d) Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the consolidated accounts of STATS ChipPAC and its majority-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation. The Company has evaluated all subsequent events through to date the financial statements were issued.

(e) Issuances of Stock by Subsidiaries

Changes in the Company’s proportionate share of the underlying net equity of a subsidiary, which result from the issuance of additional stock to third parties, are recognized as increases or decreases to equity.

F-9

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

(f) Use of Estimates

The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. Significant estimates made by management include: the useful lives of property, plant and equipment and intangible assets as well as future cash flows to be generated by those assets; discounts and allowances relating to volume purchases and other incentive programs offered to customers, allowances for doubtful accounts, sales returns; valuation allowances for deferred tax assets; provision for inventory losses; fair value of reporting units; fair value of share-based compensation; and contingent liabilities, among others. Determining the fair value of purchased intangible asset is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, assumed royalty rates, future economic and market conditions and determination of appropriate market comparables. Actual results could differ from these estimates.

(g) Foreign Currency Transactions

The Company predominantly utilizes the U.S. dollar as its functional currency. Assets and liabilities which are denominated in foreign currencies are converted into the functional currency at the rates of exchange prevailing at the balance sheet date. Income and expenses which are denominated in foreign currencies are converted at the average rates of exchange prevailing during the period. Foreign currency transaction gains or losses are included in results of operations.

STATS ChipPAC Taiwan Semiconductor Corporation designates the New Taiwan Dollar as its functional currency. Where the functional currency of a subsidiary is other than the Company’s U.S. dollar reporting currency, the financial statements are translated into U.S. dollars using exchange rates prevailing at the balance sheet date for assets and liabilities and average exchange rates for the reporting period for the results of operations. Adjustments resulting from translation of such foreign subsidiary financial statements are reported within accumulated other comprehensive income (loss), which is reflected as a separate component of equity.

(h) Certain Risks and Concentrations

The Company’s customers are comprised of companies in the semiconductor industry located primarily in the United States of America, Asia and Europe. The semiconductor industry is highly cyclical and experiences significant fluctuations in customer demand, evolving industry standards, competitive pricing pressure that leads to steady declines in average selling prices, rapid technological changes, risk associated with foreign currencies and enforcement of intellectual property rights. Additionally, the market in which the Company operates is very competitive. As a result of these industry and market characteristics, key elements of competition in the independent semiconductor packaging market include breadth of packaging offerings, time-to-market, technical competence, design services quality, production yields, reliability of customer service and price.

The Company’s largest customer accounted for approximately 10%, 12% and 14% of revenues in 2007, 2008 and 2009, respectively. The Company’s ten largest customers collectively accounted for approximately 67.0%, 66.5% and 71.8% of revenues in 2007, 2008 and 2009, respectively. The Company generally does not require collateral on its trade receivables. The Company mitigates the concentration of credit risk in trade receivables through the Company’s credit evaluation process, credit policies, credit control and collection procedures but these methods cannot eliminate all potential credit risk losses. The withdrawal of commitment from any major customer for products, or

F-10

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

reduced or delayed demand or the loss of or default by any of these major customers could have an adverse effect upon the Company’s financial position, results of operations and cash flows.

Cash and cash equivalents are deposited with financial institutions primarily in Singapore, Taiwan, Thailand, the United States of America, British Virgin Islands, South Korea, China and Malaysia. Deposits in the financial institutions may exceed the amount of insurance provided on such deposits, if any. The Company utilizes forward contracts to protect against the effects of foreign currency fluctuations. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss. The Company has not experienced any such losses to date from non-performance by its counterparties.

Thailand, South Korean, Chinese and Malaysian foreign currency exchange regulators may place restrictions on the flow of foreign funds into and out of those countries. The Company is required to comply with these regulations when entering into transactions in foreign currencies in South Korea, China, Thailand and Malaysia.

(i) Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments that are readily convertible into cash and have original maturities of three months or less. Cash and cash equivalents consisted of cash, deposit accounts and money market funds as of December 27, 2009.

(j) Restricted Cash

Restricted cash consists of time deposits and government bonds held in connection with foreign regulatory requirement and as collateral for bank loans. As of December 28, 2008 and December 27, 2009, there were $1,012 and $384 of long-term restricted cash, respectively.

(k) Derivative Instruments and Hedging Activities

The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. Changes in the fair value of those instruments will be reported in earnings or other comprehensive income depending on the use of the derivative and whether it qualifies for hedge accounting. The accounting for gains and losses associated with changes in the fair value of derivatives and the effect on the consolidated financial statements will depend on the derivatives’ hedge designation and whether the hedge is highly effective in achieving offsetting changes in the fair values of cash flows of the asset or liability hedged. Ineffectiveness of the hedge or termination of the hedged transaction requires amounts to be classified from other comprehensive income (loss) to earnings.

The Company operates in various countries, and accordingly, is subject to the inherent risks associated with foreign exchange rate movements. The Company has established risk management policies for committed or forecasted exposures to protect against volatility of future cash flows. These programs reduce, but do not always entirely eliminate, the impact of the currency exchange or commodity price movements.

In 2008 and 2009, the Company entered into foreign currency forward contracts to protect the Company from fluctuations in exchange rates. At December 28, 2008 and December 27, 2009, the Company had a series of foreign currency forward contracts with total contract value of approximately $59,000 and $121,600, respectively, qualifying as cash flow hedge. The duration of these instruments are generally less than 12 months. In 2009, the Company had realized and unrealized loss of $5,649 and $2,216, respectively, on its foreign currency forward contracts. In 2008, the Company had

F-11

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

realized and unrealized loss of $9,972 and $14,463, respectively, on its foreign currency forward contracts. In 2008 and 2009, the Company have included in earnings, loss on hedging instruments of $9,469 and $400 due to termination of certain of its foreign currency forward contracts and unrecoverable hedging loss. Certain foreign currency forward contracts to economically hedge certain committed exposures are not designated as hedges. Accordingly, the changes in fair value of these foreign currency forward contracts are reported in earnings.

The following shows the Company’s derivative instruments measured at gross fair value as reflected in the balance sheet as of December 27, 2009:

	December 27, 2009
			Accrued
	Other		operating
	receivables		expenses
Derivatives designated as hedging instruments
Foreign currency forward contracts	$	—	$	680
Derivatives not designated as hedging instruments
Foreign currency forward contracts	$	—	$	—

Derivative in Accounting Standard Codification (“ASC”) No. 815, “Derivatives and Hedging”

The following show the effect of the Company’s derivative instruments designated as cash flow hedges in the Consolidated Statements of Operations:

	Year Ended December 27, 2009
				Location of				Location of	Location of
	Gain (Loss)			Gain (Loss)	Gain (Loss)			Gain (Loss)	Gain (Loss)
	Recognized			Reclassified	Reclassified			Reclassifed	Reclassified
	in OCI on			from OCI into	from OCI into			from OCI into	from OCI into
	Derivative			Income —	Income —			Income —	Income —
	— Effective			Effective	Effective			Ineffective	Ineffective
	Portion			Portion	Portion			Portion	Portion
				Cost of revenues	$	(5,989	)	Cost of revenues	$	—
Foreign currency forward contracts	$	(2,216	)	Selling, general and administrative expenses		340		Selling, general and administrative expenses		—
Total	$	(2,216	)		$	(5,649	)		$	—

(l) Marketable Securities

Marketable securities at December 28, 2008 and December 27, 2009 consist of corporate debt securities and certificates of deposits denominated in U.S. dollars, Chinese Renminbi and New Taiwan dollars. The Company classifies its securities in one of three categories: trading, available-for-sale, or held-to-maturity. Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities are those securities in which the Company has the ability and intent to hold the security until maturity. All securities not included in trading or held-to-maturity are classified as available-for-sale.

F-12

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Trading and available-for-sale securities are recorded at fair value. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Unrealized holding gains and losses on trading securities are included in earnings. Unrealized holding gains and losses, net of the related tax effect, if any, on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive loss until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis.

A decline in the market value of individual available-for-sale or held-to-maturity securities below cost that is deemed to be other than temporary results in a reduction in its carrying amount to fair value, with the impairment charged related to credit losses being recognized in earnings, and amounts related to all other factors being recognized in other comprehensive loss. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned.

(m) Inventories

Inventories are stated at the lower of standard cost, which approximates actual cost determined on the weighted average basis, or market value. Reserves are established for excess and obsolete inventories based on estimates of salability and forecasted future demand. The Company generally does not take ownership of customer supplied semiconductors, and accordingly does not include them as part of the Company’s inventories.

(n) Equity Method Investments

Investments in entities in which the Company can exercise significant influence, but owns less than a majority equity interest, are accounted for using the equity method of accounting. The Company’s unrealized profit arising from sales by the Company to equity method investee are eliminated to the extent of the Company’s ownership.

(o) Business Combination

Business combinations are accounted for using the purchase method accounting. Business combinations which are accounted for under the purchase method accounting include the results of operations of the acquired business from the effective date of acquisition. Any excess of the purchase price over estimated fair values of the net assets acquired is recorded as goodwill.

(p) Goodwill

The Company tests goodwill for impairment on an annual basis in the designated quarters for its different reporting units, and whenever circumstances indicate the carrying value of the goodwill may have been impaired. The impairment test is performed by first comparing the fair value of the applicable reporting unit to its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second step of the impairment test is performed to determine the amount of impairment loss, if any. The second step of the test involves the comparison of the implied fair value of the goodwill to its carrying value. If the carrying value of reporting unit goodwill exceeds its implied fair value, an impairment loss is recognized for an amount equal to the excess. The implied fair value of reporting unit is determined in the same manner as the amount of goodwill recognized in a purchase business combination.

The estimates of fair value of a reporting unit are determined using various valuation techniques with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires

F-13

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

the Company to make various judgmental assumptions including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. In estimating fair values of its reporting units, the Company also uses comparable market analyses.

(q) Intangible Assets

The Company capitalizes direct costs associated with acquisition, development or purchase of patent rights and technology licenses for use in its processes. These costs are amortized over the shorter of the useful life or license period. In addition, intangible assets acquired in business combinations accounted for under the purchase method of accounting are recorded at fair value on the Company’s consolidated balance sheet at the date of acquisition. In connection with the merger with ChipPAC, Inc. (now known as STATS ChipPAC, Inc.) (“ChipPAC”), the cost of intangible assets acquired comprising tradenames, technology, intellectual property and customer relationships, software and licenses, were recorded based on the fair values of those intangible assets on August 5, 2004 based on management’s estimate of the fair value of these intangible assets. Management considered a number of factors when estimating fair value, including appraisals, discounted cash flow analysis, estimated royalty rates and appropriate market comparables.

Acquired intangible assets are stated at cost less accumulated amortization. Amortization is calculated on the straight-line method over the following periods:

Tradenames	7 years
Technology and intellectual property	10 years
Customer relationships	2 years
Software and licenses	3 to 5 years

(r) Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on the straight-line method over the following periods:

Land use rights	50 to 99 years
Building, mechanical and electrical installation	3 to 25 years
Equipment	2 to 8 years

No depreciation is provided on property, plant and equipment under installation or construction and freehold land. Repairs and replacements of a routine nature are expensed, while those that extend the life of an asset are capitalized.

Plant and equipment under capital leases are stated at the present value of minimum lease payments and are amortized straight-line over the estimated useful life of the assets.

(s) Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Recoverability of a long-lived asset is measured by a comparison of the carrying amount to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If such asset is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of a long-lived

F-14

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

asset exceeds its fair value. In determining the fair value of the long-lived asset, the Company considers the estimated market value from vendors and prices of similar assets.

For long-lived assets held for sale, the carrying value is measured at the lower of its carrying amount or fair value less cost to sell and depreciation is ceased. Long-lived assets to be abandoned will be considered held and used until it is disposed of.

(t) Comprehensive Income (Loss)

The Company applies ASC No. 220, “Comprehensive Income” with respect to reporting and presentation of comprehensive income (loss) and its components in a full set of financial statements. Comprehensive income (loss) consists of net income, foreign currency translation adjustments and unrealized gain or loss on available-for-sale marketable securities and hedging instruments, and is presented in the consolidated statements of comprehensive income (loss).

(u) Revenue Recognition

Revenue is derived primarily from wafer probe and bumping, packaging and testing of semiconductor integrated circuits. Net revenues represent the invoiced value of services rendered net of returns, trade discounts and allowances, and excluding goods and services tax.

Revenue is recognized when there is evidence of an arrangement, fees are fixed or determinable, collectibility is reasonably assured, the service has been rendered, the revenue to be recognized is billable under the terms of the arrangement and not contingent upon completion of undelivered services, and, where applicable, delivery has occurred and risk of loss has passed to the customer.

The Company generally does not take ownership of customer supplied semiconductors as these materials are sent to the Company on a consignment basis. Accordingly, the values of the customer supplied materials are neither reflected in revenue nor in cost of revenue.

Provisions are made for estimates of potential sales returns and discounts allowance for volume purchases and early payments and are recorded as a deduction from gross revenue based upon historical experience and expectations of customers’ ultimate purchase levels and timing of payment. Actual revenues may differ from estimates if future customer purchases or payment timing differ, which may happen as a result of changes in general economic conditions, market demand for the customers’ products, or by customers’ desire to achieve payment timing discounts. Actual returns and discounts have not historically been significantly different from estimates. In addition, specific returns and discounts are provided for at the time their existence is known and the amounts are estimable.

The following sets forth the percentage of net revenues by packaging products group and testing services:

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Revenue
— packaging — laminate		56.3	%		56.5	%		57.9	%
— packaging — leaded		18.4			18.0			15.1
— test and other services		25.3			25.5			27.0
Total		100.0	%		100.0	%		100.0	%

F-15

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Provisions are made for collectibility of accounts receivable when there is doubt as to the collectibility of individual accounts. Collectibility is assessed based on the age of the balance, the customer’s historical payment history, its current credit-worthiness and current economic trends.

(v) Grants

Asset-related government grants consist of grants for the purchase of equipment used for research and development activities. Asset-related grants are presented in the consolidated balance sheet as deferred grants and are credited to income on the straight-line basis over the estimated useful lives of the relevant assets.

Income-related government grants are subsidies of training and research and development expenses. Income-related grants are credited to income when it becomes probable that expenditures already incurred will constitute qualifying expenditures for purposes of reimbursement under the grants, which is typically substantially concurrent with the expenditures.

There are no restrictions on transferring technology or manufacturing products developed with government grants.

(w) Share-Based Compensation

Share-based compensation represents the cost related to share-based awards made to employees and directors. The Company measures share-based compensation expense for all share based payment awards based on estimated fair value. The Company measures grant-date fair value estimates and recognizes the share-based compensation expense on a graded vesting basis net of estimated forfeitures over the requisite service period.

(x) Employee Benefit Plans

STATS ChipPAC Taiwan Semiconductor Corporation operates a defined benefit retirement plan for a substantial portion of its employees in Taiwan in accordance with the Labor Standards Law in Taiwan. Pension benefits are generally based on years of service and average salary for the six months prior to the approved retirement date. STATS ChipPAC Taiwan Semiconductor Corporation contributes 2% of eligible wages and salaries on a monthly basis to a pension fund maintained with the Central Trust of China, as required by the Labor Standards Law. At each year end, STATS ChipPAC Taiwan Semiconductor Corporation actuarially determines pension benefit costs and obligations using the projected unit credit method, and the amounts calculated depend on a variety of assumptions. These assumptions include discount rates, rates for expected returns on plan assets, mortality rates and retirement rates. The funding of the pension plan is determined in accordance with statutory funding requirements. STATS ChipPAC Taiwan Semiconductor Corporation is obligated to make up any shortfall in the plan’s assets in meeting the benefits accrued to the participating staff. As of December 27, 2009, there was no shortfall in the plan’s assets. Total pension plan expenses in 2007 and 2008 were approximately $7 and $19, respectively. No pension plan expenses were incurred in 2009.

STATS ChipPAC, Inc. and STATS ChipPAC Test Services, Inc. have a 401(k) savings plan where the Company matches 50% of employee contributions up to 6% of eligible employee compensation. The Company’s matching contributions under the 401(k) plan were $470, $471 and $261 in 2007, 2008 and 2009, respectively. The matching contributions are accrued monthly based upon actual employee contribution. The expenses relating to the plan are a minimum annual charge of $2 and $0.028 per person and are accrued on a monthly basis. Returns of the 401(k) plan from investments in mutual funds are calculated daily by an external administrator who administers the plan. The Company’s matching contribution to the 401(k) savings plan was suspended in May 2009.

F-16

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Under the Labor Standards Law of South Korea, employees with more than one year of service are entitled to receive a lump-sum payment upon termination of their employment with STATS ChipPAC Korea Ltd. (“STATS ChipPAC Korea”), based on their length of service and rate of pay at the time of termination. Accrued severance benefits are adjusted annually for all eligible employees based on their employment as of balance sheet date. The expense for severance benefits in 2007, 2008 and 2009 was approximately $10,671, $8,196 and $3,044, respectively.

Under the Labor Standards Law in Thailand, employees with more than 120 days of service are entitled to receive a lump sum payment upon retirement or involuntary termination of their employment with STATS ChipPAC (Thailand) Limited, based on their length of service and the latest salary at the time of retirement or involuntary termination. The expense for severance benefits in 2007, 2008 and 2009 were approximately $1,360, $690 and $493, respectively.

Each employee with more than 20 years of service with STATS ChipPAC Malaysia Sdn Bhd is entitled to a single sum payment of $3 upon his or her mandatory retirement from his or her employment at age 55 years. We paid approximately $85, $88 and $20 for such retirement payments in 2007, 2008 and 2009, respectively. Accrued gratuity benefits for eligible employees are adjusted annually.

The Company participates in a number of defined contribution retirement benefit plans in certain countries of operations. Contributions are based on a percentage of each eligible employee’s salary and are expensed as the related salaries are incurred. The Company incurred expenses of approximately $15,331, $16,825 and $13,570 with respect to these retirement plans in 2007, 2008 and 2009, respectively.

(y) Operating Leases

Rental payments under operating leases are expensed on a straight-line basis over the periods of the respective leases.

(z) Product Warranties

The Company guarantees that work performed will be free from any defects in workmanship, materials and manufacture generally for a period ranging from three to twelve months to meet the stated functionality as agreed to in each sales arrangement. Products are tested against specified functionality requirements prior to delivery, but the Company nevertheless from time to time experiences claims under its warranty guarantees. The Company accrues for estimated warranty costs under those guarantees based upon historical experience, and for specific items at the time their existence is known and the amounts are determinable. Warranty costs incurred in 2007 and 2008 were insignificant. As discussed in Note 21(b), the Company entered into an amicable settlement with a customer on an alleged breach of contract and other claims arising out of an alleged manufacturing defect in 2009.

(aa) Research and Development

Research and development costs are expensed as incurred.

(bb) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the financial statements and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are

F-17

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely than not that such loss carryforwards and deferred tax assets will not be realized.

In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax positions. The Company assesses, its income tax positions and record tax benefits for all years subject to examination based upon evaluation of the facts, circumstances, and information available at the reporting dates. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company records the tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in income tax expense.

The Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) (ASC No. 740) in 2007. As a result of this adoption, the Company recognized a charge of approximately $518 to the January 1, 2007 accumulated deficit balance.

(cc) Net Income (Loss) Per Share

Basic net income (loss) per share is computed using the weighted average number of ordinary shares outstanding. Diluted net income (loss) per share is computed using the weighted average number of ordinary shares outstanding and dilutive potential ordinary shares from the assumed exercise of share options outstanding during the period, if any, using the treasury stock method plus other potentially dilutive securities outstanding, such as convertible notes.

The Company excluded certain potentially dilutive securities for each period presented from its diluted net income per share computation because the exercise price of the securities exceeded the average fair value of the Company’s ordinary shares and therefore these securities were anti-dilutive.

A summary of the excluded potentially dilutive securities outstanding and the range of related exercise prices follows:

	December 30,		December 28,		December 27,
	2007		2008		2009
Convertible notes		10,613		—		—
Share plans		15,609		14,310		12,471

The following is a reconciliation of the numerators and denominators of the basic and diluted net income per ordinary share computations for the periods presented below:

	Year Ended
	December 30,		December 28,		December 27,
	2007		2008		2009
Net income	$	93,684	$	25,702	$	10,053
Net income excluding convertible bond interest expense		95,702		25,702		10,053
Weighted average number of ordinary shares outstanding (basic)		2,032,962		2,143,934		2,202,218
Weighted average dilutive shares from share plans		10,581		2,315		12

F-18

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

	Year Ended
	December 30,		December 28,		December 27,
	2007		2008		2009
Weighted average dilutive convertible notes		145,144		—		—
Weighted average number of ordinary shares and equivalent ordinary shares outstanding (diluted)		2,188,687		2,146,249		2,202,230

(dd) Reclassifications

Certain reclassifications have been made to prior period amounts to conform with classifications used in the current year.

(ee) New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”) (ASC No. 820), which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). SFAS 157 is effective for fiscal years beginning after November 15, 2007. The Company adopted SFAS 157 for financial assets and financial liabilities in 2008 and its adoption did not have a material impact on the Company’s consolidated financial position and results of operations. In February 2008, the FASB issued staff position No. 157-2 (“FSP 157-2”) which delays the effective date of SFAS 157, for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (annually). FSP 157-2 is effective for fiscal years beginning after November 15, 2008. The Company adopted FSP157-2 at the beginning of the first quarter of 2009. The Company’s adoption of SFAS 157 for nonfinancial assets and nonfinancial liabilities that are not measured and recorded at fair value on a recurring basis did not have a significant impact on its consolidated financial position and results of operations. In October 2008, the FASB issued staff position No. 157-3 (“FSP 157-3”) which clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of financial asset when the market for that financial asset is not active. FSP 157-3 is effective upon its issuance on October 10, 2008, including prior periods for which financial statements have not been issued. The Company’s adoption of FSP 157-3 did not have an effect on its consolidated financial position and results of operations.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”) (ASC No. 805), which replaces SFAS No. 141, “Business Combinations.” SFAS 141(R) retains the underlying concepts of SFAS 141 in that all business combinations are still required to be accounted for at fair value under the acquisition method of accounting but SFAS 141(R) changed the method of applying the acquisition method in a number of significant aspects. Acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. SFAS 141(R) is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. SFAS 141(R) amends SFAS 109 such that adjustments made to valuation allowances on deferred taxes and acquired tax contingencies associated with acquisitions that closed prior to the effective date of SFAS 141(R) would also apply the provisions of SFAS 141(R). If such liabilities are settled for lesser amounts prior to the adoption of SFAS 141(R), the reversal of any remaining liability

F-19

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

will affect goodwill. If such liabilities reverse subsequent to the adoption of SFAS 141(R), such reversals will affect the income tax provision in the period of reversal. Early adoption is not permitted. The Company adopted SFAS 141(R) at the beginning of the first quarter of 2009 and the adoption did not have a material impact on its financial statements; however, since the Company acquired significant deferred tax assets for which valuation allowances were recorded at the acquisition date, SFAS 141(R) could significantly affect the results of operations if there are subsequent changes in these valuation allowances.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51” (“SFAS 160”) (ASC No. 810). SFAS 160 requires the recognition of a noncontrolling (minority) interest as equity in the consolidated financial statements and separate from the parent’s equity. The amount of net income attributable to the noncontrolling (minority) interest will be included in consolidated net income on the face of the income statement. It also amends certain of ARB No. 51’s consolidation procedures for consistency with the requirements of SFAS 141(R). This statement also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. SFAS 160 is effective for annual periods beginning after December 15, 2008 and should be applied prospectively. However, the presentation and disclosure requirements of the statement shall be applied retrospectively for all periods presented. The adoption of SFAS 160 did not have a significant impact on the Company’s consolidated financial position and results of operations.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of SFAS No. 133” (“SFAS 161”) (ASC No. 815), which is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company’s adoption of SFAS 161 at the beginning of the first quarter of 2009 did not have a material impact on its consolidated financial position and results of operations.

In June 2009, the FASB confirmed that the FASB Accounting Standards Codification (the “Codification”) will become the single official source of authoritative U.S. GAAP (other than guidance issued by the SEC), superseding existing FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force (“EITF”), and related literature. After that date, only one level of authoritative U.S. GAAP will exist. All other literature will be considered non-authoritative. The Codification does not change U.S. GAAP; instead, it introduces a new structure that is organized in an easily accessible, user-friendly online research system. The Codification becomes effective for interim and annual periods ending on or after September 15, 2009. The Company applied the Codification beginning in the third quarter of 2009.

In August 2009, the FASB issued Accounting Standard Update No. 2009-05 (“FASB ASU 2009-05”) “Fair Value Measurements and Disclosures (Topic 820) — Measuring Liabilities at Fair Value”. FASB ASU 2009-05 provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures — Overall, for the fair value measurement of liabilities. This update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: (1) a valuation technique that used: (a) the quoted price of the identical liability when traded as an asset; and/or (b) quoted prices for similar liabilities or similar liabilities when traded as assets; and/or (2) another valuation technique that is consistent with the principles of Topic 820. Two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in

F-20

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

this update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendments in this update also clarify that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company’s adoption of FASB ASU 2009-05 in the third quarter of 2009 did not have a material impact on its consolidated financial position and results of operations. Refer to Note 24 for information on fair value measurements.

2. Related Party Transactions

As of December 27, 2009, Temasek, through its wholly-owned subsidiary, STSPL, beneficially owned 1,845,715,689 ordinary shares, representing 83.8% of the Company’s ordinary shares, following STSPL’s conversion of its entire $134,500 of the Company’s 2.5% convertible subordinated notes due 2008 into 145,138,660 ordinary shares on May 22, 2008. In 2008, related interest expense of $1,308 was incurred on these convertible subordinated notes. No related interest were incurred in 2009.

The Company’s operations in Singapore are conducted in a building constructed on land held on a long-term operating lease from a statutory board of the Government of Singapore. The lease is for a 30-year period commencing March 1, 1996 and is renewable for a further 30 years subject to the fulfillment of certain conditions.

The Company has contracts with Chartered Semiconductor Manufacturing Ltd (“Chartered”), majority owned by Temasek through STSPL, to provide wafer sort, packaging and test services and priority usage of the Company’s testers in return for minimum loads and orders. Temasek divested its equity in Chartered effective December 2009. Net revenues earned from Chartered in 2007, 2008 and 2009 were $9,008, $7,376 and $2,736, respectively.

The Company has $8,561 and $14,970 of cash and cash equivalents, and $19,376 and $24,262 of short and long term marketable securities placed with Temasek affiliated financial institutions as of December 28, 2008 and December 27, 2009, respectively. Interest income earned were $188 and $314 in 2008 and 2009, respectively.

The Company also engages in transacting with other companies, directly or indirectly controlled by Temasek, in the ordinary course of business. These transactions which include transactions for gas, water and electricity, facilities management, transportation and telecommunication services are at their prevailing market rates or prices and on customary terms and conditions. These expenses amounted to $19,808, $16,728 and $2,853 in 2007, 2008 and 2009, respectively.

The amounts owing by (to) affiliates were as follows:

	December 28,			December 27,
	2008			2009
Short-term amounts due from affiliates, accounts receivable, net of allowance for sales returns	$	1,955		$	1,413
Receivables on assets transfer due from affiliate		22,562			19,482
	$	24,517		$	20,895
Short-term amounts due to affiliates
Accounts payable	$	(1,388	)	$	(17	)

F-21

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

In 2006, the Company entered into an agreement to sell packaging and test equipment related to specific low lead count packages to Wuxi CR Micro-Assembly Technology Ltd. (“ANST”) for $35,000 payable over 4 years and a performance-based contingent earn-out of $5,000. ANST is a wholly owned subsidiary of MAT, of which the Company has a 25% shareholding. As a result of the planned sale of these assets to ANST, the Company had separately classified the related assets of $29,638 in 2006 to assets held for sale, a component of other non-current assets. During 2008, $10,021 of the related assets has been transferred to ANST. In 2009, the assets held for sale had been fully transferred to ANST. Realized gains on assets held for sales of $1,154, $168 and $425 have been recognized in 2007, 2008 and 2009, respectively.

In addition to the transfer of assets, the Company entered into an agreement to provide sales and technical support to ANST on a quarterly commission basis from 2007 to 2009, of which $208, $1,253 and $726 were earned in 2007, 2008 and 2009, respectively.

3. Cash and Cash Equivalents

Cash and cash equivalents consist of the following:

	December 28,		December 27,
	2008		2009
Cash at banks and on hand	$	88,800	$	124,734
Cash equivalents
Bank fixed deposits		141,924		100,361
Money market funds		65,192		63,588
	$	295,916	$	288,683

4. Marketable Securities

Marketable securities consist of the following:

	December 28,			December 27,
	2008			2009
Available-for-sale corporate debt securities and bank fixed deposits	$	57,507		$	79,208
Gross unrealized gains		—			233
Gross unrealized losses		(606	)		—
Fair value	$	56,901		$	79,441

Maturities of marketable securities (at fair value) are as follows:

	December 28,		December 27,
	2008		2009
Marketable securities:
Due in one year or less	$	41,314	$	62,512
Due after one year through five years		15,587		16,929
	$	56,901	$	79,441

Gross realized gains and losses in 2007 were $127 and $258, respectively. Gross realized gains and losses in 2008 were $36 and $nil, respectively. Gross realized gains and losses in 2009 were $10 and $nil, respectively. Proceeds from the sales or maturities of available-for-sale marketable securities in 2007, 2008 and 2009 were $43,259, $79,896 and $47,399, respectively.

F-22

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

5. Accounts Receivable

Accounts receivable consists of the following:

	December 28,			December 27,
	2008			2009
Accounts receivable — third parties	$	145,628		$	214,022
Allowance for sales returns		(6,108	)		(5,256	)
	$	139,520		$	208,766

Movements in the allowance for sales returns are as follows:

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Beginning	$	3,406		$	6,268		$	6,108
Utilized during the year		(98	)		(4,122	)		(949	)
Charged during the year		4,681			4,144			2,359
Writeback during the year		(1,721	)		(182	)		(2,262	)
Ending	$	6,268		$	6,108		$	5,256

6. Other Receivables

Other receivables consist of the following:

	December 28,		December 27,
	2008		2009
Deposits and staff advances	$	911	$	1,294
Taxes receivable		833		1,001
Grants receivables		117		421
Other receivables		6,496		8,839
	$	8,357	$	11,555

7. Inventories

Inventories consist of the following:

	December 28,		December 27,
	2008		2009
Raw materials	$	50,775	$	49,165
Work-in-progress		8,328		11,379
Finished goods		1,614		1,315
	$	60,717	$	61,859

F-23

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

8. Prepaid Expenses and Other Assets

Prepaid expenses and other current assets consist of the following:

	December 28,		December 27,
	2008		2009
Debt issuance cost, net of accumulated amortization	$	—	$	464
Other prepayments and assets		9,999		14,220
Deferred income tax assets		4,694		5,081
	$	14,693	$	19,765

Prepaid expenses and other non-current assets consist of the following:

	December 28,		December 27,
	2008		2009
Deferred income tax assets	$	13,095	$	15,841
Other deposits		295		276
Debt issuance cost, net of accumulated amortization		4,212		2,006
Assets held for sale		43		—
Others		6,548		3,104
	$	24,193	$	21,227

9. Property, Plant and Equipment

Property, plant and equipment consist of the following:

	December 28,			December 27,
	2008			2009
Cost:
Freehold land	$	10,703		$	10,833
Land and land use rights		19,864			19,864
Buildings, mechanical and electrical installation		269,046			278,492
Equipment		2,216,667			2,255,290
Total cost	$	2,516,280		$	2,564,479
Total accumulated depreciation		(1,299,938	)		(1,448,982	)
Property, plant and equipment, net	$	1,216,342		$	1,115,497

Depreciation charged to results of operations, including depreciation related to assets under capital leases in 2007, amounted to $246,554, $275,044 and $257,052 in 2007, 2008 and 2009, respectively.

The Company routinely reviews the remaining estimated useful lives of its equipment to determine if such lives should be adjusted due to the likelihood of technological obsolescence arising from changes in production techniques or in market demand for the use of its equipment. However, due to the nature of the packaging and testing operations, which may include sudden changes in demand in the end markets, and due to the fact that certain equipment is dedicated to specific customers, the Company may not be able to accurately anticipate declines in the utility of its equipment.

Equipment impairment charges of $21,091 were recorded in 2008 as a result of the Company’s ongoing assessment of property, plant and equipment for impairment. The equipment impairment

F-24

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

charges were taken because continued softness in demand in the end-markets to which certain of the equipment was dedicated had reduced the anticipated future usage of such equipment. No impairment charge was incurred in 2009.

Land use rights represent payments to secure, on a fully-paid up basis, the use of properties where the Company’s facilities are located in Shanghai, China and Kuala Lumpur, Malaysia for a period of 50 and 99 years, respectively. The land use rights expire in the year 2044 for Shanghai, China and in the year 2086 for Kuala Lumpur, Malaysia. The Company’s Singapore facilities are located in a building constructed on land held on a 30-year operating lease which is renewable for a further 30-year period subject to the fulfillment of certain conditions. The facilities in Hsin-Chu Hsien, Taiwan, Incheon City, South Korea and Pathumthani, Thailand are located on freehold land.

There was no equipment under capital lease as of December 28, 2008 and December 27, 2009.

10. Intangible Assets

Intangible assets consist of the following:

	December 28,			December 27,
	2008			2009
Cost:
Tradenames	$	7,700		$	7,700
Technology and intellectual property		32,000			32,000
Customer relationships		99,300			99,300
Patent costs, software, licenses and others		43,990			47,905
Total cost	$	182,990		$	186,905
Total accumulated amortization		(138,228	)		(146,912	)
Intangible assets, net	$	44,762		$	39,993

Amortization expense related to finite-lived intangible assets is summarized as follows:

	Year Ended
	December 30,		December 28,		December 27,
	2007		2008		2009
Tradenames	$	1,100	$	1,100	$	1,100
Technology and intellectual property		3,200		3,200		3,200
Patent costs, software, licenses and others		3,498		4,347		5,278
	$	7,798	$	8,647	$	9,578

Finite-lived intangible assets are generally being amortized over estimated useful lives of two to ten years. Estimated future amortization expense as of December 27, 2009 is summarized as follows:

2010	$	8,071
2011		7,124
2012		5,598
2013		4,308
2014		4,886
Thereafter		10,006
Total	$	39,993

F-25

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

11. Goodwill

The changes in the carrying value of goodwill are as follows:

	December 28,		December 27,
	2008		2009
Beginning	$	547,958	$	551,132
Purchase adjustments		3,174		—
Ending	$	551,132	$	551,132

As of December 27, 2009, the Company had goodwill of $2,209 related to the acquisition of STATS ChipPAC Taiwan Semiconductor Corporation, $524,114 related to the acquisition of ChipPAC and $24,809 related to acquisition of the assembly and test operations in Thailand. In 2008, purchase adjustments of $3,174 related to the deferred taxes valuation and other tax liabilities were recorded.

In 2007, 2008 and 2009, the Company performed its annual test for impairment and determined that the fair value of the reporting units exceeds their carrying value, and therefore goodwill was not impaired.

The Company cannot predict the occurrence of certain events or circumstances that might adversely affect the carrying value of goodwill in future. Such events may include, but are not limited to, strategic decisions made in response to economic and competitive conditions and the impact of the economic environment on the Company’s business.

12. Accrued Operating Expenses

Accrued operating expenses consist of the following:

	December 28,		December 27,
	2008		2009
Staff costs and accrued restructuring charges	$	49,224	$	42,304
Purchase of raw materials		4,636		12,993
Maintenance fees, license fees and royalties		5,025		3,488
Interest expense		7,536		7,339
Provision for vacation liability		4,697		1,859
Liability for uncertain tax positions		34,621		4,223
Others		42,330		28,791
	$	148,069	$	100,997

F-26

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

13. Income Taxes

Income (loss) before income taxes consists of the following:

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Singapore	$	(9,416	)	$	(9,652	)	$	207
Foreign		138,499			58,974			14,531
	$	129,083		$	49,322		$	14,738

Income tax (expense) benefit consists of the following:

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Current tax:
Singapore	$	—		$	—		$	—
Foreign		(23,192	)		(13,679	)		(1,589	)
Total current tax	$	(23,192	)	$	(13,679	)	$	(1,589	)
Deferred tax:
Singapore	$	(2,000	)	$	(5,804	)	$	(998	)
Foreign		(4,389	)		311			(1,125	)
Total deferred tax	$	(6,389	)	$	(5,493	)	$	(2,123	)
	$	(29,581	)	$	(19,172	)	$	(3,712	)

A reconciliation of the expected tax expense at the Singapore statutory rate of tax to actual tax expense is as follows:

	Year Ended
	December 30, 2007			December 28, 2008			December 27, 2009
Income tax expense computed at Singapore statutory rate of 17.0% (2008 and 2007: 18.0%)	$	23,235		$	8,878		$	2,505
Non-deductible expenses		4,948			9,018			8,944
Non-taxable income, including income exemption		(1,558	)		(9,287	)		(13,193	)
Differences in tax rates, including undistributed earnings		10,239			7,411			10,351
Effect of recognizing deferred tax assets at concessionary tax rate and tax credits		(18,381	)		(3,694	)		(4,041	)
Effect of change in statutory tax rate on deferred tax assets		3,721			—			3,142
Tax benefits from employee share option plans		(90	)		(100	)		(23	)
Reinvestment allowance		(4,516	)		(1,392	)		(1,316	)
Change in valuation allowance		12,163			25,446			(10,101	)
Taxable foreign exchange adjustment and foreign net operating loss		(3,645	)		(17,293	)		7,101
Unrecognized tax benefits and other items, net		3,465			185			343
Income tax expense	$	29,581		$	19,172		$	3,712

F-27

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss, unutilized capital allowance and investment tax credit carryforwards. The deferred tax assets as of December 28, 2008 and December 27, 2009 arose principally as a result of the deferred tax benefit associated with operating loss carryforwards, investment, and research and development tax credits, reinvestment allowance and deductible temporary differences on property, plant and equipment. The tax effect of significant items comprising the Company’s deferred income tax assets and liabilities at December 28, 2008 and December 27, 2009 are as follows:

	December 28,			December 27,
	2008			2009
Deferred income tax assets:
Operating loss carryforwards	$	26,335		$	25,497
Investment, and research and development tax credits		50,609			53,074
Reinvestment allowance		40,876			42,405
Property, plant and equipment		42,312			35,635
Others		15,051			11,604
		175,183			168,215
Valuation allowance		(157,394	)		(147,293	)
	$	17,789		$	20,922
Deferred income tax liabilities:
Property, plant and equipment	$	27,212		$	32,390
Allowances and reserves		1,989			1,669
	$	29,201		$	34,059
Net deferred income tax assets (liabilities)	$	(11,412	)	$	(13,137	)

In 2004, as part of the acquisition of ChipPAC, the Company acquired approximately $103,351 of net operating loss carryforwards, $32,185 of tax credit carryforwards and $47,023 of reinvestment allowance that were recognized as deferred tax assets upon acquisition. The Company established a valuation allowance of $53,973 against all of the net operating loss carryforwards and reinvestment allowance, and a portion of the Korean tax credit carryforwards in 2004. In 2007 and 2008, $4,040 and $991 of the United States, South Korea and China net operating loss carryforwards and tax credit carryforwards, respectively, were utilized and accordingly the goodwill related to the acquisition of ChipPAC was reduced by $4,040 and $991, respectively. Subsequent to the adoption of FAS141(R) (ASC No. 805) effective date January 1, 2009, the above rule will no longer apply and any benefit realized will be recorded as a reduction of income tax expense.

As of December 27, 2009, the Company had approximately $115,872 of tax loss carryforwards available to offset against future taxable income, certain amounts of which will expire in varying amounts from 2010 to 2026.

As of December 27, 2009, the Company had approximately $5,847, $276,118, $47,227 and $169,620 of research and development, unutilized capital allowances, investment tax credits and reinvestment allowance, respectively, which can be used to offset income tax payable in future years. Certain credits will expire in varying amounts from 2010 through 2013.

The Company recorded a valuation allowance of $157,394 and $147,293 as of December 28, 2008 and December 27, 2009, respectively, which represents an increase of $25,446 and a decrease $10,101 in 2008 and 2009, respectively, to reduce the assets to the amounts that the Company deemed, more likely than not, that the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in

F-28

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income based on business plans, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, the Company established a partial valuation allowance against its gross deferred tax assets to reduce the assets to the amount the Company deemed, more likely than not, that the deferred tax assets will be realized.

The Company’s subsidiary in China, STATS ChipPAC Shanghai Co., Ltd., qualifies for a tax holiday from State Department of China under the foreign investment policy. STATS ChipPAC Shanghai Co., Ltd. is exempted from tax for two years followed by three years of 50% tax exemption, commencing from the first profitable year of operations (2006). This tax holiday will expire on December 31, 2010.

Changes in share ownership by shareholder may result in a limitation on the amount of the Singapore net operating losses and unutilized capital allowances that are available as carryforwards for use by the Company. The Company reviewed the tax effect of such a shareholder change in connection with the tender offer by STSPL in 2007. In 2008, the Singapore tax authorities confirmed that the limitations relating to the Company’s ability to carryforward certain Singapore tax losses and capital allowances for offset against future taxable profits of the Company in connection with the tender offer by STSPL were not affected subject to the fulfillment of certain continuing conditions. Concurrently, approximately $311,611 of such tax losses and capital allowance carryforwards continued to be made available to the Company’s operations in Singapore.

In 2008, the Company recorded a $4,165 increase in tax reserves relating to certain tax matters prior to August 2004. This increased the goodwill related to the acquisition of ChipPAC accordingly by $4,165 in 2008. In addition, the Company reclassified $17,930 relating to certain tax matters prior to August 2004 from deferred tax liabilities to liability for unrecognized tax benefits in 2008. A reconciliation of the unrecognized tax benefits is as follows:

	December 30,		December 28,			December 27,
	2007		2008			2009
Unrecognized tax benefits:
Beginning	$	518	$	21,422		$	42,120
Increases related to prior year tax positions		13,521		24,211			—
Increases related to current year tax positions		7,383		927			7,258
Decreases related to current year tax positions		—		(4,111	)		(1,026	)
Decreases related to payments to and settlements with taxing authorities		—		(150	)		(33,453	)
Decreases as a result of lapse of applicable statute limitations		—		(179	)		(151	)
Ending	$	21,422	$	42,120		$	14,748

It is estimated that the uncertain tax position will increase by approximately $1,565 in the next twelve months given the same level of future taxable profit as 2009. The Company also expects the uncertain tax position to decrease by approximately $4,257 in the next twelve months due to payments to and settlements with taxing authorities. Included in the cumulative unrecognized tax benefits is an amount of $14,748 which if recognized, would impact the effective tax rate for 2009.

The Company’s continuing practice is to recognize interest and penalties related to the unrecognized tax benefits in the income tax expense. In 2009, the Company recognized $526 of interest and penalties in earnings. As of December 27, 2009, the Company does not have any accrued interest and penalties.

F-29

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Annually, the Company files income tax returns in various jurisdictions. The years still open to audit by the foreign tax authorities, which represent the years still subject to the statute of limitations, in major jurisdictions include Singapore (2003 onward), South Korea (2002 onward), Malaysia (2003 onward), United States (1999 onward), China (2002 onward) and Taiwan (2006 onward). Audit resolutions could potentially reduce the Company’s unrecognized tax benefits, either because the tax positions are not sustained on audit or because the Company agrees to tax disallowances.

In 2008, the Singapore Economic Development Board (“EDB”) offered the Company a five year tax incentive for its Singapore operations commencing July 1, 2007, whereby certain qualifying income will be subject to a concessionary tax rate of 5% instead of the Singapore statutory rate of 17% (18% prior to 2009), subject to the fulfillment of certain continuing conditions.

14. Short-Term Borrowings

The Company has a line of credit from Bank of America with a credit limit of $50,000, of which $50,000 was outstanding as of December 27, 2009 over two loan tranches of $25,000 each. The principal of and interest on the two loan tranches of $25,000 each are payable at maturity in February 2010 and June 2010, respectively. These two loan tranches bear interest at the rate of 2.25% per annum and 1.83% per annum, respectively. The Company has the option to roll-forward the principal at maturity for a period of one, two, three, or six months.

STATS ChipPAC Shanghai Co., Ltd. obtained a short term loan facility from Bank of Communications with a credit limit of $15,000 in June 2009. As of December 27, 2009, $6,000 of loan under this credit facility was outstanding over two loan tranches of $3,000 each. The principal of the two loan tranches of $3,000 each is payable at maturity in June 2010. Interest on the two loan tranches of $3,000 each is payable on a quarterly basis. These two tranches bear interest at the rate of 3.4% per annum and 2.5% per annum, respectively.

15. Long-Term Borrowings

Long-term debts consist of the following:

	December 28,			December 27,
	2008			2009
6.75% senior fixed-rate notes	$	215,000		$	213,000
7.5% senior fixed-rate notes		150,000			150,000
6% promissory note		26,800			16,800
U.S. dollars bank loan at floating rates		6,600			—
Taiwan dollar loans and commercial papers at floating rates		25,053			22,167
Total long-term borrowings		423,453			401,967
Less: current amounts		(26,953	)		(168,786	)
Non-current amounts	$	396,500		$	233,181

On November 18, 2004, the Company issued $215,000 of senior unsecured notes due November 15, 2011, for net proceeds of $210,458. The senior notes bears interest of 6.75% per annum payable semi-annually on May 15 and November 15 of each year. At the maturity date, 100.0% of the principal amount will be due and payable. Prior to November 15, 2008, the Company may redeem all or a part of the senior notes at any time by paying a “make whole” premium plus accrued and unpaid interest. The Company may redeem all, but not less than all, of these notes at any time in the event of certain

F-30

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

changes affecting withholding taxes at 100% of their principal amount plus accrued and unpaid interest. On or after November 15, 2008, the Company may redeem all or a part of these notes at any time at the redemption prices specified under the terms and conditions of the senior notes plus accrued and unpaid interest. In addition, prior to November 15, 2007, the Company may redeem up to 35% of these notes with the net proceeds of certain equity offerings. Upon a change of control, the Company will be required to offer to purchase these notes at 101.0% of their principal amount plus accrued and unpaid interest.

In March 2009, the Company repurchased $2,000 aggregate principal amount of its $215,000 6.75% Senior Notes due 2011 for $1,724 (excluding interest). The Company financed the repurchase of these senior notes with its existing cash on hand. As a result, the Company recognized a gain on repurchase of senior notes of $276 in 2009. The Company has deposited the repurchased $2,000 principal amount of senior notes with a banking institution to hold in custody and accordingly, these senior notes have thereupon ceased to be outstanding or to accrue interest in the Company’s financial statements.

On July 19, 2005, the Company issued $150,000 of senior unsecured notes due July 19, 2010 for net proceeds of $146,535. The senior notes bear interest rate of 7.5% per annum payable semi-annually on January 19 and July 19 of each year. At the maturity date, 100.0% of the principal amount will be due and payable. Prior to July 19, 2010, the Company may redeem all or a part of the senior notes at any time by paying a “make whole” premium plus accrued and unpaid interest. The Company may redeem all, but not less than all, of these notes at any time in the event of certain changes affecting withholding taxes at 100% of their principal amount plus accrued and unpaid interest and liquidated damages, if any. In addition, prior to July 19, 2008, the Company may redeem up to 35% of these notes at a redemption price of 107.5% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the redemption date, with the net proceeds of certain equity offerings. Upon a change of control, the Company will be required to offer to purchase these notes at 101.0% of their principal amount plus accrued and unpaid interest. A portion of the net proceeds were used to repay the then outstanding $99,000 short-term debts with Overseas-Chinese Banking Corporation Limited and Bank of America N.A.

On October 2, 2007, the Company issued a $50,000 promissory note carrying interest, payable annually, of 6% per annum to LSI in connection with the acquisition of an assembly and test operations in Thailand. The amount payable to LSI after contractual netting of certain receivables from LSI of $3,200 amounted to $46,800 as of December 30, 2007. The promissory note is payable over 4 yearly installments of $20,000, $10,000, $10,000 and $6,800 over the next 4 years. The first and second installment of $20,000 and $10,000, respectively, were paid to LSI in 2008 and 2009. As of December 27, 2009, the amount payable to LSI under the promissory note was $16,800.

STATS ChipPAC Taiwan Semiconductor Corporation has a NT$3.6 billion floating rate New Taiwan dollar term loan facility (approximately $112,430 based on exchange rate as of February 1, 2010) with a syndicate of lenders, with Taishin Bank as the sponsor bank. The loan drawdowns must be made within 24 months from the date of first drawdown, which took place in February 2007. Upon expiry of the 24 months period in February 2009, this facility ceased to be available for further drawdown. As of December 27, 2009, STATS ChipPAC Taiwan Semiconductor Corporation has drawn down NT$0.7 billion (approximately $21,861 based on exchange rate as of February 1, 2010) under the term loan facility. The principal of and interest on the loan is payable in nine quarterly installments commencing February 2009 (being 24 months from first draw down date) with the first eight quarterly installments each repaying 11% of the principal and the last quarterly installment repaying 12% of the principal. In May 2009, STATS ChipPAC Taiwan Semiconductor Corporation refinanced the outstanding NT$0.6 billion (approximately $18,738 based on exchange rate as of February 1, 2010) loan with new credit facilities of NT$873.0 million (approximately $27,264 as of February 1, 2010) obtained from various

F-31

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

bank and financial institutions. As of December 27, 2009, $19,270 of loan under these credit facilities was outstanding. These credit facilities have varying interest rates ranging from 1.73% to 1.96% per annum and maturities ranging from May 2011 to May 2012. As of December 27, 2009, $4,640 of loan under these credit facilities with maturity in 2012 were classified as short-term liabilities due to the expectation of early repayment of certain of these credit facilities.

Additionally, STATS ChipPAC Taiwan Semiconductor Corporation has a NT$0.3 billion (approximately $9,369 as of February 1, 2010) credit facility from Mega Bank of which $2,898 borrowings was outstanding as of December 27, 2009. This credit facility bears interest at the rate of 1.7% per annum and expires in August 2012. This loan is secured by a pledge of land and building with a combined net book value of $6,353 as of December 27, 2009.

Annual maturities of long-term debts as of December 27, 2009 are as follows:

Payable in year
2010	$	168,786
2011		230,844
2012		2,337
Total	$	401,967

The STATS ChipPAC consolidated group, with the exception of STATS ChipPAC Taiwan Semiconductor Corporation, the China non-guarantor entities (comprising STATS ChipPAC Shanghai Co., Ltd. and STATS ChipPAC Semiconductor Shanghai Co., Ltd.), and, in the case of the 7.5% Senior Notes due 2010, STATS ChipPAC Korea Ltd., fully and unconditionally guaranteed the obligations under the indentures of the 6.75% Senior Notes due 2011 and the 7.5% Senior Notes due 2010, on an unsecured senior basis. See Note 26, Condensed Consolidating Financial Information. The STATS ChipPAC consolidated group, with the exception of STATS ChipPAC Taiwan Semiconductor Corporation, are subject to the covenant restrictions under the terms of the 6.75% Senior Notes due 2011 and the 7.5% Senior Notes due 2010, which, among other things, limit their ability to incur additional indebtedness, prepay subordinated debts, make investments, declare or pay dividends, enter into transactions with affiliates, sell assets, enter into sale and leaseback transactions, incur liens and encumbrances, enter into merger and consolidations and other customary restrictions. The 6.75% Senior Notes due 2011 and the 7.5% Senior Notes due 2010 are cross-defaulted to the Company’s other indebtedness. At December 28, 2008, and December 27, 2009, the Company was in compliance with all covenants.

16. Unutilized Credit Facilities

As of December 28, 2008 and December 27, 2009, the Company have other undrawn banking and credit facilities consisting of short-term loans, long-term loans and bank guarantees of $41,571 and $36,383, respectively, with financial institutions in various countries. The notional letters of credit amounts outstanding as of December 28, 2008 and December 27, 2009 were $884 and $nil, respectively.

F-32

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

17. Other Non-Current Liabilities

Other non-current liabilities consist of the following:

	December 28,		December 27,
	2008		2009
Deferred tax liabilities	$	29,191	$	33,932
Accrued retirement and severance benefits		22,908		11,662
Liability for uncertain tax positions		7,499		10,525
Others		4,546		3,210
	$	64,144	$	59,329

Changes in accrued retirement and severance benefits in 2008 and 2009 are as follows:

	December 28,			December 27,
	2008			2009
Beginning	$	39,237		$	23,083
Provision for retirement and severance benefits		8,166			4,394
Severance payments		(15,752	)		(14,934	)
Foreign currency loss		(8,568	)		558
Ending	$	23,083		$	13,101
Payments on deposits with Korean National Pension Fund		(175	)		(130	)
Plan assets		—			(1,309	)
Ending, net of payments on deposits	$	22,908		$	11,662

18. Share Capital, Share Options and Incentive Plans

As a result of the employees exercising their share options and purchase rights in 2007 and 2008, 27,793,536 and 9,745,970 ordinary shares were issued, respectively. There was no issuance of ordinary shares in 2009.

In 2008, the Company issued 145,138,660 ordinary shares to STSPL upon conversion of $134,500 aggregate principal amount of its 2.5% convertible subordinated notes due 2008, respectively.

As of December 27, 2009, the Company had outstanding grants under two share-based compensation plans. Two of the Company’s share-based compensation plans were terminated in 2008 pursuant to the Company’s consideration on replacement of its long term compensation strategy.

For share-based awards, the Company recognizes compensation expense on a graded vesting basis over the requisite service period of the award. The fair value of the share-based compensation expense was as follows:

F-33

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

	Year Ended
	December 30,		December 28,		December 27,
	2007		2008		2009
Cost of revenues	$	4,783	$	905	$	190
Selling, general and administrative		3,118		875		242
Research and development		968		228		69
Accelerated share-based compensation		—		1,562		—
	$	8,869	$	3,570	$	501

The share-based compensation expense in 2009 was not material.

In 2007, the Company issued Restricted Shares Units (“RSUs”) and contingent Performance Share Plan (“PSP”) awards pursuant to the Restricted Share Plan (“RSP”) and the STATS ChipPAC Ltd. Performance Share Plan (the “PSP”), respectively. In 2007, no share options were granted, as the RSP is intended to replace the grants of share options under the STATS ChipPAC Ltd. Share Option Plan, as amended. In 2008, the Company terminated the PSP and the STATS ChipPAC Ltd. Employee Share Purchase Plan 2004 (the “ESPP”). No RSUs, contingent Performance Share Plan awards, employee share purchase rights or share options were granted in 2008.

Concurrently with the tender offer (refer to “Temasek’s Subsidiary, Singapore Technologies Semiconductors Pte Ltd’s Tender Offer” in Note 1(a)), STSPL made an options proposal to all holders of options granted under the STATS ChipPAC share option plans whereby the participating holders would agree not to exercise their options for new shares or to exercise their rights as option holders. During the tender offer period, 85,348,090 options were surrendered pursuant to the options proposal.

The following table summarizes share option activity in 2007, 2008 and 2009:

				Weighted Average
	Options			Exercise Price
	(In thousands)			Aggregate intrinsic
				value (in thousands)
Options outstanding at December 31, 2006		116,800		$	0.99
Lapsed and forfeited		(4,222	)		1.25
Surrendered in tender offer		(85,348	)		1.02
Exercised		(11,244	)		0.62
Options outstanding at December 30, 2007		15,986		$	1.70
Lapsed and forfeited		(1,559	)		1.60
Exercised		(37	)		0.55
Options outstanding at December 28, 2008		14,390		$	1.83
Lapsed and forfeited		(1,891	)		2.00
Options outstanding at December 27, 2009		12,499		$	1.80
Exercisable at December 30, 2007		15,328		$	1.53
Exercisable at December 28, 2008		14,303		$	1.53
Exercisable at December 27, 2009		12,471		$	1.50

F-34

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

The following table summarizes information about share options outstanding at December 27, 2009:

	Options Outstanding						Options Exercisable
			Weighted						Weighted
			Average		Weighted				Average		Weighted
	Number		Remaining		Average		Number		Remaining		Average
Range of Exercise	Outstanding at		Contractual		Exercise		Exercisable at		Contractual		Exercise
Prices	12/27/2009		Life		Price		12/27/2009		Life		Price
	(In thousands)						(In thousands)
$0.22 to $0.29		28		3.0 years	$	0.29		28		3.0 years	$	0.29
$0.43 to $0.47		1		1.3 years	$	0.46		1		1.3 years	$	0.46
$0.55 to $0.87		456		2.9 years	$	0.76		428		2.8 years	$	0.76
$0.91 to $1.07		1		1.5 years	$	1.07		1		1.5 years	$	1.07
$1.16 to $1.64		11,352		2.3 years	$	1.39		11,352		2.3 years	$	1.39
$2.04 to $2.61		18		0.5 years	$	2.61		18		0.5 years	$	2.61
$3.99		643		0.3 years	$	3.99		643		0.3 years	$	3.99
		12,499		2.3 years				12,471		2.3 years

The following table summarizes information on the RSUs in 2007, 2008 and 2009:

				Weighted
	Number			average grant-
	outstanding			date fair value
	(In thousands)
Granted in 2007		6,970		$	0.86
Cancelled		(668	)		0.86
Outstanding as of December 30, 2007		6,302		$	0.86
Cancelled		(655	)		0.86
Vested		(2,083	)		0.86
Outstanding as of December 28, 2008		3,564		$	0.85
Cancelled		(238	)		0.85
Vested		(1,735	)		0.85
Outstanding as of December 27, 2009		1,591		$	0.85

In 2008, 2.1 million ordinary shares were issued pursuant to the RSP. In 2009, $1,488 was paid to the participants of the RSP as settlement of the vested 1.7 million RSUs made in cash. The Company intends to settle all future RSUs in cash.

At our annual shareholders’ meeting in April 2009, the Company obtained shareholders’ approval for the adoption of the STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors (the “NED Equity Grant Plan”) and the STATS ChipPAC Ltd. Performance Share Plan 2009 (the “PSP 2009”).

Subject to certain rules of the NED Equity Grant Plan including consequences arising from cessation of a directorship and change of control of the Company, the number of the Company’s ordinary shares deliverable under the NED Equity Grant Plan shall occur on or after December 31, 2011. The number of the Company’s ordinary shares to be issued to each participant of the NED Equity Grant Plan shall be determined by the Executive Resource and Compensation Committee (“ERCC”) and is subject to the achievement by the Company of the prescribed performance targets over the relevant performance period and any other criteria and considerations deemed appropriate by the ERCC.

F-35

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

The maximum number of the Company’s ordinary shares which could be issued under the NED Equity Grant Plan on any date when added to the total number of new ordinary shares in the capital of the Company issued and issuable under the NED Equity Grant Plan, shall not exceed 0.45% of the total number of the Company’s outstanding ordinary shares.

No participant has been awarded shares under the NED Equity Grant Plan in 2009.

Each performance share under the PSP 2009 represents an unfunded and unsecured promise of the Company to issue or transfer ordinary shares of the Company with no exercise or purchase price. Contingent awards of performance shares are granted as the ERCC may, on the recommendation by the management of the Company, determine in its absolute discretion. Subject to certain rules of the PSP 2009 including consequences arising from termination of employment of a participant and change of control of the Company, vesting of the performance shares comprised in outstanding awards shall occur on December 31, 2011. Determination of the number of ordinary shares deliverable with respect to any performance share award is subject to the achievement by the Company of the prescribed performance targets set by the ERCC over the relevant performance period.

The maximum permissible number of ordinary shares of the Company which could be issued pursuant to awards granted under the PSP 2009 on any date when added to the total number of new ordinary shares in the capital of the Company issued and issuable pursuant to awards granted under the PSP 2009, shall not exceed 5.02% of the total number of the Company’s outstanding ordinary shares.

Performance shares contingently awarded under the PSP 2009 are generally not transferable. A grantee of a contingent award of performance shares has no rights as a shareholder with respect to any ordinary shares covered by any contingent award of performance shares until such ordinary shares have been delivered in accordance with the terms of the PSP 2009.

Since the commencement of the PSP 2009 in 2009, contingent awards aggregating between 34,000,000 and 88,819,964 performance shares have been awarded under the PSP 2009, representing the corresponding number of ordinary shares to be delivered if the performance targets set by the ERCC are achieved.

In 2009, no share-based compensation expense was recognized for the NED Equity Grant Plan and PSP 2009.

Under the listing rules of the Singapore Exchange Securities Trading Limited, the aggregate number of shares which could be issued under all the share plans of the Company shall not exceed 15% of the total number of the issued shares of the Company from time to time (excluding any treasury shares).

19. Share Repurchase

The Company is incorporated in Singapore. Based on the Companies (Amendment) Act 2005 of Singapore, a Singapore company can repurchase shares out of capital, as well as from distributable profits, and ordinary shares repurchased by a company can be held by that company as treasury shares instead of being cancelled. At the annual general meeting in April 2009, the Company obtained shareholders’ approval for the repurchase of up to approximately 55 million ordinary shares (2.5% of the issued ordinary share capital as of the date of the annual general meeting). The approved amount for share repurchases under this shareholders’ mandate will terminate on the earlier of the date on which the next annual general meeting is held or is required by law to be held or the date which the

F-36

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

approval is revoked or varied. As of December 27, 2009, the Company had not repurchased any shares.

20. Accumulated Other Comprehensive (Loss) Income

The components of accumulated other comprehensive loss are as follows:

	December 28,			December 27,
	2008			2009
Currency translation loss	$	(7,589	)	$	(6,240	)
Unrealized loss on hedging instruments		(4,113	)		(680	)
Unrealized gain (loss) on available-for-sale marketable securities		(606	)		233
	$	(12,308	)	$	(6,687	)

21. Commitments and Contingencies

(a) Commitments

As of December 28, 2008 and December 27, 2009, unconditional purchase obligations consist of the following:

	December 28,		December 27,
	2008		2009
Capital commitments
Building, mechanical and electrical installation	$	2,187	$	5,623
Equipment		33,522		73,253
Other commitments
Inventories	$	27,848	$	41,433

These unconditional purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Company and specify all significant terms, including fixed or minimum quantities to be purchased, fixed or variable price provisions and the approximate timing of transactions. The duration of these purchase obligations are generally less than 12 months.

The Company is party to certain royalty and licensing agreements which have anticipated cumulative payments of approximately $45,364 for 2010 through 2016.

The Company leases certain of its facilities in Singapore, South Korea and the United States under operation lease arrangements and has lease agreements for the land located in Singapore, Malaysia and China related to its facilities in these locations. Operating lease rental expense in 2007, 2008 and 2009 was $11,277, $11,794 and $11,473, respectively.

The Company has leased certain plant and equipment under operating leases. These leases extend through 2012. Operating lease rental expenses, including amortization of lease prepayments, in respect of these leases in 2007, 2008 and 2009 were $1,954, $4,662 and $5,884, respectively.

Future minimum lease payments under non-cancelable operating leases as of December 27, 2009 were:

F-37

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Payable in year
2010		17,006
2011		11,603
2012		8,522
2013		7,149
2014		7,180
Thereafter		18,591
Total	$	70,051

(b) Contingencies

The Company is subject to claims and litigations, which arise in the normal course of business. These claims may include allegations of infringement of intellectual property rights of others as well as other claims of liability. The Company accrues liability associated with these claims and litigations when they are probable and reasonably estimable.

In February 2006, the Company and its wholly-owned subsidiaries, ChipPAC and STATS ChipPAC (BVI) Limited, were named as defendants in a patent infringement lawsuit filed in United States Federal Court for the Northern District of California (the “California Litigation”). The plaintiff, Tessera Technologies, Inc. (“Tessera”), has asserted that semiconductor chip packaging, specifically devices having Ball Grid Array (“BGA”) and multi-chip BGA configurations used by the defendants infringe certain patents of Tessera. Tessera has further asserted that the Company is in breach of an existing license agreement entered into by Tessera with ChipPAC, which agreement has been assigned by ChipPAC to the Company.

In May 2007, at Tessera’s request, the United States International Trade Commission (the “ITC”) instituted an investigation (the “First ITC Investigation”) of certain of the Company’s co-defendants in the California Litigation and other companies, including certain of the Company’s customers. In addition, in April 2007, Tessera instituted an action in the Federal District Court for the Eastern District of Texas (the “Texas Action”) against certain of the Company’s co-defendants in the California Litigation and other companies. In the First ITC Investigation, the ITC issued a limited exclusion order in May 2009 preventing the named companies from importing certain packaged semiconductor chips and products containing them into the United States. The respondents in the First ITC Investigation appealed to the U.S. Court of Appeals and the appeal is pending. The Texas Action seeks damages and injunctive relief against the named defendants. Both the First ITC Investigation and the Texas Action allege infringement of two of the same patents asserted by Tessera in the California Litigation, and may involve some of the same products packaged by the Company that are included in the California Litigation.

In May 2008, the ITC instituted an investigation (the “Second ITC Investigation”) of the Company and other semiconductor package assembly service providers that are included in the California Litigation. In the Second ITC Investigation, Tessera sought an order to prevent the Company and other named companies (collectively, the “Respondents”) from providing packaging or assembly services for certain packaged semiconductor chips incorporating small format non-tape BGA semiconductor packages and products containing them, for importation into the United States. In addition, Tessera sought a general exclusion order excluding from importation all small format non-tape BGA semiconductor packages (and downstream products containing such packages), regardless of whether such packages are assembled by the Respondents. The Second ITC Investigation alleged infringement of three of the same patents asserted by Tessera in the California Litigation. The Company responded to the complaint in June 2008. In February 2009, the Second ITC Investigation was stayed pending the outcome of the First ITC Investigation. In March 2009, Tessera moved to terminate the Second ITC

F-38

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Investigation. In August 2009, the ITC issued a final determination terminating the Second ITC Investigation.

The district court in the California Litigation has vacated the trial schedule and stayed all proceedings pending a final resolution of the First ITC Investigation. The U.S. Patent and Trademark Office has also instituted reexamination proceedings on all of the patents Tessera has asserted in the California Litigation and the Second ITC Investigation. It is not possible to predict the outcome of the California Litigation, the total costs of resolving the California Litigation, or when the stay in the California Litigation will be lifted; nor is it possible to predict the outcome of the First ITC Investigation or the Texas Action. It is also not possible to predict the outcome of the PTO proceedings or their impact on the California Litigation or the First ITC Investigation.

The Company believes that it has a meritorious defense to these claims and intend to defend the lawsuit(s) vigorously. A court or ITC determination that the Company’s products or processes infringe the intellectual property rights of others could result in significant liability and/or require the Company to make material changes to its products and/or processes. Due to the inherent uncertainties of the lawsuit(s) and investigation(s), the Company cannot accurately predict the ultimate outcome and it could result in significant liability and/or injunction and could have a material adverse effect on the business, financial condition and the results of operations of the Company.

The Company also, from time to time, receive from customers request for indemnification against pending or threatened infringement claims brought against such customers, such as the Tessera cases described above. The resolution of any future allegation or request for indemnification could have a material adverse effect on the Company’s business, financial condition and results of operations.

In 2009, Freescale Semiconductor, Inc. (“Freescale”), a customer of the Company, notified the Company that, it filed a complaint against the Company in the United States District Court for the Western District of Texas in connection with an alleged breach of contract and other claims arising out of an alleged manufacturing defect in parts packaged for Freescale by the Company. Freescale demanded mediation of the claims, as required by its underlying contract with the Company. The Company filed an answer to Freescale’s complaint as well as a counterclaim in the United States District Court for the Western District of Texas. The parties reached an amicable settlement of the aforementioned claim by Freescale and the Company’s counterclaim in the third quarter of 2009. The associated legal settlement costs have been fully reserved and reflected in the Company’s financial statements in 2009.

In addition, the Company is subject to various taxes in the different jurisdictions in which it operate. These include taxes on income, property, goods and services, and other taxes. The Company submits tax returns and claims with the appropriate government taxing authorities, which are subject to examination and agreement by those taxing authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine adequacy of provision for taxes.

In connection with the merger with ChipPAC, the Company assumed certain contingent liabilities. In 2002, an assessment of approximately 16.0 billion South Korean Won (approximately $13,725 based on the exchange rate as of February 1, 2010) was made by the South Korean National Tax Service (“NTS”) relating to withholding tax not collected on the interest income on the loan between ChipPAC’s subsidiaries in South Korea and Hungary for the period from 1999 to September 2001. ChipPAC appealed the assessment through the NTS’s Mutual Agreement Procedure (“MAP”). On July 18, 2002, the Icheon tax office of the NTS approved a suspension of the proposed assessment until resolution of the disputed assessment. The NTS required a corporate guarantee amounting to the tax

F-39

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

assessment in exchange for the suspension. ChipPAC complied with the guarantee request on July 10, 2002. A further assessment of 2.7 billion South Korean Won (approximately $2,316 based on the exchange rate as of February 1, 2010) was made on January 9, 2004 for the interest from October 2001 to May 2002. ChipPAC engaged in a MAP and obtained suspension of the additional proposed assessment by providing a corporate guarantee in the amount of the additional assessment. In June 2007, the NTS extended the MAP. In the event that the Company was not successful with the appeal, the maximum amount that would have been payable under the tax assessments issued in 2002 and 2004 including potential interest and local surtax as of December 27, 2009 was estimated to be 37.4 billion South Korean Won (approximately $32,082 based on the exchange rate as of February 1, 2010).

On July 7, 2009, the NTS issued a notice on the termination of the MAP. Consequently, a revised tax assessment was issued to ChipPac’s subsidiary in South Korea for 10.6 billion South Korean Won (approximately $9,093 based on the exchange rate as of February 1, 2010). This revised tax assessment replaced the prior tax assessments issued in 2002 and 2004. The tax liability amounts from the revised tax assessment have been fully reserved as liability from uncertain tax positions in the Company’s financial statements. In 2009, the Company reduced its accrued liability related to the uncertain tax positions by $3,081 following the termination of the MAP. The Company paid the tax liability amounts from the revised tax assessment between August and September 2009. The two corporate guarantees in the aggregate of 18.7 billion South Korean Won (approximately $16,041 based on the exchange rate as of February 1, 2010) previously provided by ChipPAC to the NTS were released in September 2009.

22. Restructuring Charges

In 2009, the Company recorded severance and related charges of $16,072 in connection with its restructuring plan involving the reduction of approximately 620 employees, representing approximately 5% of its global workforce.

In 2008, the Company recorded restructuring expenses of $19,790 in 2008. The restructuring expenses in 2008 consisted of severance and related charges of $6,000 in connection with the Company’s reduction of workforce by 335 employees in 2008 and a further severance and related charges of $13,790 in connection with the Company’s restructuring plan involving the reduction of approximately 1,600 employees, representing approximately 12% of its global workforce, which the Company announced in December 2008.

The Company implemented the restructuring plan to aggressively reduce its operating costs in response to the severe operating environment during those periods and to realign its organization’s structure and efficiency.

23. Other Non-Operating Income (Expense)

	Year Ended
	December 30,			December 28,			December 27,
	2007			2008			2009
Gain (loss) on sale of marketable securities	$	(131	)	$	36		$	10
Gain from repurchase of senior notes		—			—			276
Other expense, net		(311	)		(9	)		(2,302	)
	$	(442	)	$	27		$	(2,016	)

24. Fair Value of Financial Instruments

F-40

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data.

The following tables set forth the fair value of the Company’s financial assets and liabilities, excluding interest components, that were accounted for at fair value on a recurring basis as of December 28, 2008 and December 27, 2009, respectively:

	Fair value measurement
	as of December 28, 2008
	Level 1		Level 2		Level 3		Total
Assets:
Short-term marketable securities	$	41,314	$	—	$	—	$	41,314
Long-term marketable securities		15,587		—		—		15,587
Total assets measured and recorded at fair value	$	56,901	$	—	$	—	$	56,901
Liabilities:
Accrued operating expenses (foreign currency forward contracts)	$	—	$	7,078	$	—	$	7,078
Total liabilities measured and recorded at fair value	$	—	$	7,078	$	—	$	7,078

	Fair value measurement
	as of December 27, 2009
	Level 1		Level 2		Level 3		Total
Assets:
Short-term marketable securities	$	62,512	$	—	$	—	$	62,512
Long-term marketable securities		16,929		—		—		16,929
Total assets measured and recorded at fair value	$	79,441	$	—	$	—	$	79,441
Liabilities:
Accrued operating expenses (foreign currency forward contracts)	$	—	$	680	$	—	$	680
Total liabilities measured and recorded at fair value	$	—	$	680	$	—	$	680

F-41

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

The following tables set forth the estimated fair value of the Company’s financial liabilities that are not measured at fair value on a recurring basis as of December 28, 2008 and December 27, 2009, respectively:

	Estimated fair value measurement
	as of December 28, 2008
	Level 1		Level 2		Level 3		Total
Liabilities:
Senior notes	$	—	$	268,250	$	—	$	268,250
Total liabilities not measured and recorded at fair value	$	—	$	268,250	$	—	$	268,250

	Estimated fair value measurement
	as of December 27, 2009
	Level 1		Level 2		Level 3		Total
Liabilities:
Senior notes	$	—	$	363,180	$	—	$	363,180
Total liabilities not measured and recorded at fair value	$	—	$	363,180	$	—	$	363,180

The carrying values of the senior notes as of December 27, 2009 were $363,000.

The estimated fair value of financial instruments has been determined by the Company using available market information and appropriate methodologies. However, considerable judgment is required in interpreting market data to develop the estimates for fair value. Accordingly, these estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange. Certain of these financial instruments are with major financial institutions and expose the Company to market and credit risks and may at times be concentrated with certain counterparties or groups of counterparties. The creditworthiness of counterparties is continually reviewed, and full performance is anticipated.

25. Business Segment, Geographic and Major Customer Data

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has identified its individual geographic operating locations as its operating segments. All material geographical operating locations qualify for aggregation due to similarities in economic characteristics, nature of services, market base and production process. Accordingly, the operating segments have been aggregated into one reportable segment.

F-42

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

Revenues by major service line and by geographical areas (identified by location of customer headquarters) were:

	Year Ended
	December 30,		December 28,		December 27,
	2007		2008		2009
United States
— packaging — laminate	$	690,297	$	692,734	$	579,131
— packaging — leaded		259,732		230,434		165,592
— test and other services		283,735		279,348		216,864
		1,233,764		1,202,516		961,587
Asia
— packaging — laminate		213,857		189,742		129,401
— packaging — leaded		32,576		55,869		26,513
— test and other services		121,410		126,855		131,616
		367,843		372,466		287,530
Europe
— packaging — laminate		25,928		55,027		59,039
— packaging — leaded		11,154		12,170		8,074
— test and other services		12,871		16,009		9,455
		49,953		83,206		76,568
Total
— packaging — laminate		930,082		937,503		767,571
— packaging — leaded		303,462		298,473		200,179
— test and other services		418,016		422,212		357,935
	$	1,651,560	$	1,658,188	$	1,325,685

Long-lived assets by geographical area were:

	Year Ended
	December 28,		December 27,
	2008		2009
Singapore	$	227,636	$	260,973
United States		17,666		8,572
Rest of Asia		971,040		845,952
Total	$	1,216,342	$	1,115,497

Net assets by geographical area were:

	Year Ended
	December 28,		December 27,
	2008		2009
Singapore	$	493,739	$	583,623
United States		136,536		124,980
Rest of Asia		918,382		856,066
Total	$	1,548,657	$	1,564,669

F-43

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

In 2009, the Company’s ten largest customers accounted for 71.8% of its net revenues. The Company’s top three largest customers contributed approximately 14%, 13% and 12%, respectively, of its net revenues in 2009.

26. Condensed Consolidating Financial Information

In November 2004, the Company issued $215,000 of 6.75% Senior Notes due 2011, of which $213,000 is outstanding as of December 27, 2009. The senior notes issued by STATS ChipPAC are fully and unconditionally guaranteed, jointly and severally, on a senior basis, by the following wholly owned subsidiaries, (1) STATS ChipPAC, Inc., STATS ChipPAC (Barbados) Ltd., STATS ChipPAC (BVI) Limited, ChipPAC International Company Limited, STATS ChipPAC Malaysia Sdn. Bhd., STATS ChipPAC (Thailand) Limited, STATS ChipPAC Test Services, Inc., STATS Holdings Limited, ChipPAC Luxembourg S.a.R.L., ChipPAC Liquidity Management Hungary Limited Liability Company and STATS ChipPAC Taiwan Co., Ltd. (the “Guarantor Subsidiaries”) and (2) STATS ChipPAC Korea Ltd., STATS ChipPAC Shanghai Co., Ltd., STATS ChipPAC Semiconductor Shanghai Co., Ltd. and STATS ChipPAC Taiwan Semiconductor Corporation (the “Non-Guarantor Subsidiaries”) did not provide guarantees.

In July 2005, the Company issued $150,000 of 7.5% Senior Notes due 2010. The senior notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis, by the Guarantor Subsidiaries. The Non-Guarantor Subsidiaries and STATS ChipPAC Korea Ltd. did not provide guarantees.

The following is the consolidated financial information segregated between STATS ChipPAC Ltd. as the issuer of the $213,000 6.75% Senior Notes due 2011 and the $150,000 7.5% Senior Notes due 2010; STATS ChipPAC Korea Ltd. as a guarantor of the $213,000 6.75% Senior Notes due 2011 and non-guarantor of the $150,000 7.5% Senior Notes due 2010; the other Guarantor Subsidiaries and other Non-Guarantor Subsidiaries of the $213,000 6.75% Senior Notes due 2011 and the $150,000 7.5% Senior Notes due 2010.

F-44

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In thousands of U.S. Dollars (except per share data)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Year Ended December 30, 2007

				STATS						Non-
	STATS			ChipPAC			Guarantor			Guarantor
	ChipPAC			Korea			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net revenues	$	432,058		$	613,248		$	1,199,553		$	333,329		$	(926,628	)	$	1,651,560
Cost of revenues		330,428			526,608			1,077,722			278,235			(882,709	)		1,330,284
Gross profit		101,630			86,640			121,831			55,094			(43,919	)		321,276
Operating expenses:
Selling, general and administrative		54,715			15,336			65,966			9,887			(33,311	)		112,593
Research and development		13,931			10,262			19,522			1,833			(10,630	)		34,918
Restructuring charges		990			—			—			—			—			990
Tender offer expenses		10,119			—			803			—			—			10,922
Held for sale asset impairment		—			—			1,725			—			—			1,725
Total operating expenses		79,755			25,598			88,016			11,720			(43,941	)		161,148
Operating income		21,875			61,042			33,815			43,374			22			160,128
Other income (expense), net:
Interest income		3,807			425			4,086			971			(2,031	)		7,258
Interest expense		(33,904	)		(3,094	)		(4,187	)		(1,296	)		2,031			(40,450	)
Foreign currency exchange gain		1,968			322			179			18			—			2,487
Equity gain from investment in equity investee		102			—			—			—			—			102
Equity gain from investment in subsidiaries		99,636			—			24,735			—			(124,371	)		—
Dividend income from subsidiary		5,486			—			—			—			(5,486	)		—
Other non-operating income (expense), net		(3,286	)		3,429			(877	)		292			—			(442	)
Total other income (expense), net		73,809			1,082			23,936			(15	)		(129,857	)		(31,045	)
Income before income taxes		95,684			62,124			57,751			43,359			(129,835	)		129,083
Income tax expense		2,000			11,402			7,583			8,596			—			29,581
Net income		93,684			50,722			50,168			34,763			(129,835	)		99,502
Less: Net income attributable to the noncontrolling interest		—			—			—			—			(5,818	)		(5,818	)
Net income attributable to STATS ChipPAC Ltd.	$	93,684		$	50,722		$	50,168		$	34,763		$	(135,653	)	$	93,684

F-45

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year Ended December 30, 2007

				STATS						Non-
	STATS			ChipPAC			Guarantor			Guarantor
	ChipPAC			Korea			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities
Net income attributable to STATS ChipPAC Ltd.	$	93,684		$	50,722		$	50,168		$	34,763		$	(135,653	)	$	93,684
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		84,095			65,509			54,937			49,818			(7	)		254,352
Amortization of leasing prepayments		11			—			—			—			—			11
Debt issuance cost amortization		2,446			—			115			—			—			2,561
(Gain) loss on sale of property, plant and equipment		1,090			(1	)		(36	)		(1,070	)		—			(17	)
Held for sale asset impairment		—			—			1,725			—			—			1,725
Accretion of discount on convertible notes		4,830			—			—			—			—			4,830
Foreign currency exchange loss (gain)		(16	)		—			—			755			(15	)		724
Share-based compensation expense		3,192			3,958			1,531			188			—			8,869
Deferred income taxes		2,000			(9,079	)		2,490			914			—			(3,675	)
Net income attributable to the noncontrolling interest		—			—			—			—			5,818			5,818
Equity gain from investment in equity investee		(102	)		—			—			—			—			(102	)
Equity gain from investment in subsidiaries		(99,636	)		—			(24,735	)		—			124,371			—
Others		280			(17	)		59			1,282			—			1,604
Changes in operating working capital:
Accounts receivable		2,828			—			(30,059	)		(350	)		—			(27,581	)
Amounts due from affiliates		55,562			(23,032	)		(40,574	)		(46,951	)		41,357			(13,638	)
Inventories		17,382			3,354			(3,868	)		12,731			—			29,599
Other receivables, prepaid expenses and other assets		4,091			6,597			(2,239	)		(1,337	)		—			7,112
Accounts payable, accrued operating expenses and other payables		(21,209	)		36,516			41,981			(12,996	)		(262	)		44,030
Amounts due to affiliates		40,330			12,162			(20,287	)		10,758			(41,357	)		1,606
Net cash provided by operating activities		190,858			146,689			31,208			48,505			(5,748	)		411,512
Cash Flows From Investing Activities
Proceeds from sales of marketable securities	$	—		$	—		$	—		$	19,660		$	—		$	19,660
Proceeds from maturity of marketable securities		2,614			—			—			20,985			—			23,599
Purchases of marketable securities		—			—			—			(27,450	)		—			(27,450	)
Cash injection in subsidiaries		(60,214	)		—			—			—			60,214			—
Acquisition of intangible assets		(2,247	)		(446	)		(2,500	)		(1,569	)		—			(6,762	)
Acquisition of business		—			—			(100,000	)		—			—			(100,000	)
Purchases of property, plant and equipment		(43,237	)		(145,307	)		(31,319	)		(46,525	)		34,100			(232,288	)
Proceeds from sale of assets held for sale		—			—			657			21,172			—			21,829
Others, net		16,049			6,983			4,228			9,164			(34,100	)		2,324
Net cash used in investing activities		(87,035	)		(138,770	)		(128,934	)		(4,563	)		60,214			(299,088	)
Cash Flows From Financing Activities
Repayment of short-term debts	$	—		$	(48	)	$	—		$	(6,501	)	$	—		$	(6,549	)
Repayment of long-term debts		(114,118	)		(5,070	)		—			(51,330	)		—			(170,518	)
Proceeds from issuance of shares		19,851			—			58,500			1,452			(59,952	)		19,851
Repurchase and redemption of convertible notes		(36,800	)		—			—			—			—			(36,800	)
Proceeds from promissory notes		—			—			50,000			—			—			50,000
Proceeds from bank borrowings		50,000			3,600			—			29,257			—			82,857
Increase in restricted cash		—			—			(614	)		(17	)		—			(631	)
Capital lease payments		—			(3,680	)		—			—			—			(3,680	)
Distribution to noncontrolling interest in subsidiary		—			—			—			(10,466	)		5,486			(4,980	)
Net cash provided by (used in) financing activities		(81,067	)		(5,198	)		107,886			(37,605	)		(54,466	)		(70,450	)
Net increase in cash and cash equivalents		22,756			2,721			10,160			6,337			—			41,974
Effect of exchange rate changes on cash and cash equivalents		—			—			—			30			—			30
Cash and cash equivalents at beginning of the year		69,057			22,503			55,785			24,112			—			171,457
Cash and cash equivalents at end of the year	$	91,813		$	25,224		$	65,945		$	30,479		$	—		$	213,461

F-46

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

CONDENSED CONSOLIDATING BALANCE SHEETS
As of December 28, 2008

			STATS				Non-
	STATS		ChipPAC		Guarantor		Guarantor
	ChipPAC		Korea		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	146,281	$	12,807	$	95,239	$	41,589	$	—		$	295,916
Short-term marketable securities		—		—		—		41,314		—			41,314
Accounts receivable, net		52,301		—		79,313		7,906		—			139,520
Short-term amounts due from affiliates		645,175		662		212,407		13,157		(860,610	)		10,791
Other receivables		2,490		1,343		3,881		643		—			8,357
Inventories		13,306		26,284		11,237		9,890		—			60,717
Prepaid expenses and other current assets		1,773		8,488		2,866		1,566		—			14,693
Total current assets		861,326		49,584		404,943		116,065		(860,610	)		571,308
Long-term marketable securities		15,587		—		—		—		—			15,587
Long-term amounts due from affiliates		—		—		—		13,726		—			13,726
Property, plant and equipment, net		227,636		374,189		297,950		316,567		—			1,216,342
Investment in equity investee		9,001		—		—		—		—			9,001
Investment in subsidiaries		1,030,329		—		92,050		—		(1,122,379	)		—
Intangible assets		12,024		1,406		29,200		2,132		—			44,762
Goodwill		—		319,638		125,605		103,680		2,209			551,132
Long-term restricted cash		—		634		15		363		—			1,012
Prepaid expenses and other non-current assets		9,140		8,205		1,033		5,815		—			24,193
Total assets	$	2,165,043	$	753,656	$	950,796	$	558,348	$	(1,980,780	)	$	2,447,063
LIABILITIES AND EQUITY
Current liabilities:
Accounts and other payables	$	11,086	$	44,767	$	30,450	$	31,924	$	—		$	118,227
Payables related to property, plant and equipment purchases		9,264		1,561		13,994		5,885		—			30,704
Accrued operating expenses		52,609		53,136		29,114		13,210		—			148,069
Income taxes payable		—		18		1,792		1,569		—			3,379
Short-term borrowings		50,000		—		—		—		—			50,000
Short-term amounts due to affiliates		128,244		81,588		611,119		41,047		(860,610	)		1,388
Current installments of long-term debts		—		6,600		10,000		10,353		—			26,953
Total current liabilities		251,203		187,670		696,469		103,988		(860,610	)		378,720
Long-term debts, excluding current installments installments		365,000		—		16,800		14,700		—			396,500
Other non-current liabilities		183		33,221		18,458		12,282		—			64,144
Total liabilities		616,386		220,891		731,727		130,970		(860,610	)		839,364
Shareholders’ equity attributable to STATS ChipPAC Ltd.		1,548,657		532,765		219,069		427,378		(1,179,212	)		1,548,657
Noncontrolling interest		—		—		—		—		59,042			59,042
Total equity		1,548,657		532,765		219,069		427,378		(1,120,170	)		1,607,699
Total liabilities and equity	$	2,165,043	$	753,656	$	950,796	$	558,348	$	(1,980,780	)	$	2,447,063

F-47

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Year Ended December 28, 2008

				STATS						Non-
	STATS			ChipPAC			Guarantor			Guarantor
	ChipPAC			Korea			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net revenues	$	412,730		$	621,020		$	1,241,330		$	263,018		$	(879,910	)	$	1,658,188
Cost of revenues		309,296			560,018			1,089,030			257,536			(832,083	)		1,383,797
Gross profit		103,434			61,002			152,300			5,482			(47,827	)		274,391
Operating expenses:
Selling, general and administrative		57,355			14,002			72,128			10,632			(35,780	)		118,337
Research and development		15,245			10,690			22,133			1,804			(12,047	)		37,825
Restructuring charges		5,912			—			12,763			1,115			—			19,790
Equipment impairment		4,940			6,330			6,253			3,568			—			21,091
Accelerated share based compensation		1,027			317			117			101			—			1,562
Total operating expenses		84,479			31,339			113,394			17,220			(47,827	)		198,605
Operating income (loss)		18,955			29,663			38,906			(11,738	)		—			75,786
Other income (expense), net:
Interest income		2,559			169			3,550			1,438			(2,031	)		5,685
Interest expense		(30,583	)		(2,511	)		(3,897	)		(1,026	)		2,031			(35,986	)
Foreign currency exchange gain (loss)		195			9,809			(4,923	)		166			—			5,247
Equity loss from investment in equity investee		(1,437	)		—			—			—			—			(1,437	)
Equity gain (loss) from investment in subsidiaries		37,109			—			(19,118	)		—			(17,991	)		—
Dividend income from subsidiary		4,664			—			—			—			(4,664	)		—
Other non-operating income (expense), net		44			—			(134	)		117			—			27
Total other income (expense), net		12,551			7,467			(24,522	)		695			(22,655	)		(26,464	)
Income (loss) before income taxes		31,506			37,130			14,384			(11,043	)		(22,655	)		49,322
Income tax expense		5,804			8,790			3,616			962			—			19,172
Net income (loss)		25,702			28,340			10,768			(12,005	)		(22,655	)		30,150
Less: Net income attributable to the noncontrolling interest		—			—			—			—			(4,448	)		(4,448	)
Net income (loss) attributable to STATS ChipPAC Ltd.	$	25,702		$	28,340		$	10,768		$	(12,005	)	$	(27,103	)	$	25,702

F-48

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year Ended December 28, 2008

				STATS						Non-
	STATS			ChipPAC			Guarantor			Guarantor
	ChipPAC			Korea			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities
Net income (loss) attributable to STATS ChipPAC Ltd.	$	25,702		$	28,340		$	10,768		$	(12,005	)	$	(27,103	)	$	25,702
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		78,253			81,430			69,536			54,472			—			283,691
Debt issuance cost amortization		2,691			—			46			—			—			2,737
Equipment impairment		4,940			6,330			6,253			3,568			—			21,091
(Gain) loss on sale of property, plant and equipment		1,335			—			9			(221	)		—			1,123
Accretion of discount on convertible notes		66			—			—			—			—			66
Foreign currency exchange loss (gain)		—			—			—			(1,555	)		—			(1,555	)
Share-based compensation expense		1,933			992			402			243			—			3,570
Deferred income taxes		5,900			930			(684	)		(635	)		—			5,511
Net income attributable to the noncontrolling interest		—			—			—			—			4,448			4,448
Equity loss from investment in equity investee		1,437			—			—			—			—			1,437
Equity gain (loss) from investment in subsidiaries		(37,109	)		—			19,118			—			17,991			—
Others		504			2,610			887			177			—			4,178
Changes in operating working capital:
Accounts receivable		20,526			—			104,173			7,141			—			131,840
Amounts due from affiliates		(68,476	)		37,343			(70,751	)		45,901			47,610			(8,373	)
Inventories		6,308			12,232			443			3,612			—			22,595
Other receivables, prepaid expenses and other assets		(257	)		(577	)		(3,956	)		1,839			—			(2,951	)
Accounts payable, accrued operating expenses and other payables		54			(56,801	)		(6,660	)		(11,915	)		—			(75,322	)
Amounts due to affiliates		69,797			(5,972	)		(10,185	)		(6,293	)		(47,610	)		(263	)
Net cash provided by operating activities		113,604			106,857			119,399			84,329			(4,664	)		419,525
Cash Flows From Investing Activities
Proceeds from sales of marketable securities	$	—		$	—		$	—		$	29,755		$	—		$	29,755
Proceeds from maturity of marketable securities		—			—			3,810			46,331			—			50,141
Purchases of marketable securities		—			—			(3,810	)		(89,284	)		—			(93,094	)
Cash injection in subsidiaries		(11,031	)		—			—			—			11,031			—
Acquisition of intangible assets		(6,811	)		(711	)		(4,555	)		(794	)		—			(12,871	)
Purchases of property, plant and equipment		(44,254	)		(126,316	)		(83,279	)		(68,701	)		43,651			(278,899	)
Proceeds from sale of assets held for sale		—			—			9,413			9,695			—			19,108
Proceeds from deregistration of subsidiary		9,654			—			—			(9,654	)		—			—
Others, net		8,871			13,758			7,717			15,451			(43,651	)		2,146
Net cash used in investing activities		(43,571	)		(113,269	)		(70,704	)		(67,201	)		11,031			(283,714	)
Cash Flows From Financing Activities
Repayment of short-term debts	$	—		$	—		$	—		$	(5,035	)	$	—		$	(5,035	)
Repayment of long-term debts and promissory notes		—			(6,000	)		(20,000	)		(7,888	)		—			(33,888	)
Proceeds from issuance of shares		6,152			—			—			11,031			(11,031	)		6,152
Repurchase and redemption of convertible notes		(22,057	)		—			—			—			—			(22,057	)
Proceeds from bank borrowings		—			—			—			4,735			—			4,735
(Increase) decrease in restricted cash		—			(5	)		599			6			—			600
Grants received		340			—			—			—			—			340
Distribution to noncontrolling interest in subsidiary		—			—			—			(8,976	)		4,664			(4,312	)
Net cash used in financing activities		(15,565	)		(6,005	)		(19,401	)		(6,127	)		(6,367	)		(53,465	)
Net increase (decrease) in cash and cash equivalents		54,468			(12,417	)		29,294			11,001			—			82,346
Effect of exchange rate changes on cash and cash equivalents		—			—			—			109			—			109
Cash and cash equivalents at beginning of the year		91,813			25,224			65,945			30,479			—			213,461
Cash and cash equivalents at end of the year	$	146,281		$	12,807		$	95,239		$	41,589		$	—		$	295,916

F-49

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

CONDENSED CONSOLIDATING BALANCE SHEETS
As of December 27, 2009

			STATS				Non-
	STATS		ChipPAC		Guarantor		Guarantor
	ChipPAC		Korea		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	177,877	$	10,871	$	82,903	$	17,032	$	—		$	288,683
Short-term marketable securities		—		—		—		62,512		—			62,512
Accounts receivable, net		86,987		—		101,813		19,966		—			208,766
Short-term amounts due from affiliates		484,923		5,291		85,978		50,298		(605,595	)		20,895
Other receivables		5,875		3,720		1,174		786		—			11,555
Inventories		13,802		20,329		7,915		19,813		—			61,859
Prepaid expenses and other current assets		2,267		8,779		3,030		5,689		—			19,765
Total current assets		771,731		48,990		282,813		176,096		(605,595	)		674,035
Long-term marketable securities		16,426		503		—		—		—			16,929
Long-term amounts due from affiliates		—		—		—		—		—			—
Property, plant and equipment, net		260,973		280,177		262,439		311,908		—			1,115,497
Investment in equity investee		7,743		—		—		—		—			7,743
Investment in subsidiaries		1,005,273		—		88,121		—		(1,093,394	)		—
Intangible assets		14,002		654		23,988		1,349		—			39,993
Goodwill		—		319,638		125,605		103,680		2,209			551,132
Long-term restricted cash		—		6		—		378		—			384
Prepaid expenses and other non-current assets		2,484		16,637		1,070		1,036		—			21,227
Total assets	$	2,078,632	$	666,605	$	784,036	$	594,447	$	(1,696,780	)	$	2,426,940
LIABILITIES AND EQUITY
Current liabilities:
Accounts and other payables	$	16,032	$	39,630	$	22,620	$	55,250	$	—		$	133,532
Payables related to property, plant and equipment purchases		22,710		4,028		7,899		14,535		—			49,172
Accrued operating expenses		45,033		19,636		24,555		11,773		—			100,997
Income taxes payable		—		—		1,575		805		—			2,380
Short-term borrowings		50,000		—		—		6,000		—			56,000
Short-term amounts due to affiliates		16,007		48,026		496,893		44,686		(605,595	)		17
Current installments of long-term debts		150,000		—		10,000		8,786		—			168,786
Total current liabilities		299,782		111,320		563,542		141,835		(605,595	)		510,884
Long-term debts, excluding current installments installments		213,000		—		6,800		13,381		—			233,181
Other non-current liabilities		1,181		26,343		17,130		14,675		—			59,329
Total liabilities		513,963		137,663		587,472		169,891		(605,595	)		803,394
Shareholders’ equity attributable to STATS ChipPAC Ltd.		1,564,669		528,942		196,564		424,556		(1,150,062	)		1,564,669
Noncontrolling interest		—		—		—		—		58,877			58,877
Total equity		1,564,669		528,942		196,564		424,556		(1,091,185	)		1,623,546
Total liabilities and equity	$	2,078,632	$	666,605	$	784,036	$	594,447	$	(1,696,780	)	$	2,426,940

F-50

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Year Ended December 27, 2009

				STATS						Non-
	STATS			ChipPAC			Guarantor			Guarantor
	ChipPAC			Korea			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net revenues	$	345,806		$	412,028		$	984,627		$	279,484		$	(696,260	)	$	1,325,685
Cost of revenues		251,935			385,170			861,092			272,034			(652,923	)		1,117,308
Gross profit		93,871			26,858			123,535			7,450			(43,337	)		208,377
Operating expenses:
Selling, general and administrative		39,933			12,476			64,318			8,498			(29,709	)		95,516
Research and development		19,672			9,186			25,033			3,095			(13,628	)		43,358
Restructuring charges		—			13,069			3,003			—			—			16,072
Total operating expenses		59,605			34,731			92,354			11,593			(43,337	)		154,946
Operating income (loss)		34,266			(7,873	)		31,181			(4,143	)		—			53,431
Other income (expense), net:
Interest income		1,127			293			1,440			520			(1,211	)		2,169
Interest expense		(28,639	)		(1,428	)		(1,461	)		(739	)		1,211			(31,056	)
Foreign currency exchange gain (loss)		(1,700	)		(4,678	)		876			(967	)		—			(6,469	)
Equity loss from investment in equity investee		(1,321	)		—			—			—			—			(1,321	)
Equity loss from investment in subsidiaries		(34,560	)		—			(11,925	)		—			46,485			—
Dividend income from subsidiaries		45,408			—			—			—			(45,408	)		—
Other non-operating income (expense), net		(3,530	)		1,174			237			103			—			(2,016	)
Total other income (expense), net		(23,215	)		(4,639	)		(10,833	)		(1,083	)		1,077			(38,693	)
Income (loss) before income taxes		11,051			(12,512	)		20,348			(5,226	)		1,077			14,738
Income tax expense		998			(4,741	)		(167	)		7,622			—			3,712
Net income (loss)		10,053			(7,771	)		20,515			(12,848	)		1,077			11,026
Less: Net income attributable to the noncontrolling interest		—			—			—			—			(973	)		(973	)
Net income (loss) attributable to STATS ChipPAC Ltd.	$	10,053		$	(7,771	)	$	20,515		$	(12,848	)	$	104		$	10,053

F-51

STATS CHIPPAC LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year Ended December 27, 2009

				STATS						Non-
	STATS			ChipPAC			Guarantor			Guarantor
	ChipPAC			Korea			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities
Net income (loss) attributable to STATS ChipPAC Ltd.	$	10,053		$	(7,771	)	$	20,515		$	(12,848	)	$	104		$	10,053
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		69,192			75,237			65,185			57,016			—			266,630
Debt issuance cost amortization		1,719			—			—			—			—			1,719
(Gain) loss on sale of property, plant and equipment		485			1,126			(9	)		(390	)		—			1,212
Gain from repurchase of senior notes		(276	)		—			—			—			—			(276	)
Foreign currency exchange loss		—			—			—			965			—			965
Share-based compensation expense		251			100			96			54			—			501
Deferred income taxes		1,149			(1,426	)		(1,254	)		3,256			—			1,725
Net income attributable to the noncontrolling interest		—			—			—			—			973			973
Equity loss from investment in equity investee		1,321			—			—			—			—			1,321
Equity loss from investment in subsidiaries		34,560			—			11,925			—			(46,485	)		—
Others		147			—			1,151			116			—			1,414
Changes in operating working capital:														—
Accounts receivable		(34,686	)		—			(22,500	)		(12,060	)		—			(69,246	)
Amounts due from affiliates		160,252			(4,629	)		126,429			(23,415	)		(255,015	)		3,622
Inventories		(496	)		5,955			3,322			(9,923	)		—			(1,142	)
Other receivables, prepaid expenses and other assets		1,039			(3,940	)		2,567			(4,132	)		—			(4,466	)
Accounts payable, accrued operating expenses and other payables		(3,199	)		(47,922	)		(12,835	)		25,194			—			(38,762	)
Amounts due to affiliates		(112,237	)		(33,562	)		(114,226	)		3,639			255,015			(1,371	)
Net cash provided by (used in) operating activities		129,274			(16,832	)		80,366			27,472			(45,408	)		174,872
Cash Flows From Investing Activities
Proceeds from sales of marketable securities		—			—			—		$	15,663			—		$	15,663
Proceeds from maturity of marketable securities		—			—			—			31,736			—			31,736
Purchases of marketable securities		—			—			—			(67,634	)		—			(67,634	)
Cash injection in subsidiaries		(3,986	)		—			(8,000	)		—			11,986			0
Acquisition of intangible assets		(2,720	)		(88	)		(1,914	)		(310	)		—			(5,032	)
Purchases of property, plant and equipment		(97,541	)		(22,130	)		(44,615	)		(47,847	)		71,379			(140,754	)
Proceeds from sale of assets held for sale		—			—			587			6			—			593
Others, net		8,569			43,086			14,244			6,426			(71,379	)		946
Net cash provided by (used in) investing activities		(95,678	)		20,868			(39,698	)		(61,960	)		11,986			(164,482	)
Cash Flows From Financing Activities
Repayment of short-term debts	$	—		$	—		$	—		$	(5,035	)	$	—		$	(5,035	)
Repayment of long-term debts and promissory notes		—			(6,600	)		(10,000	)		(22,109	)		—			(38,709	)
Proceeds from issuance of shares		—			—			6			11,980			(11,986	)		—
Repurchase of senior notes		(2,000	)		—			—			—			—			(2,000	)
Proceeds from bank borrowings		—			—			—			29,840			—			29,840
(Increase) decrease in restricted cash		—			628			(10	)		(15	)		—			603
Distribution to noncontrolling interest in subsidiary		—			—			(43,000	)		(4,602	)		45,408			(2,194	)
Net cash used in financing activities		(2,000	)		(5,972	)		(53,004	)		10,059			33,422			(17,495	)
Net increase (decrease) in cash and cash equivalents		31,596			(1,936	)		(12,336	)		(24,429	)		—			(7,105	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			(128	)		—			(128	)
Cash and cash equivalents at beginning of the year		146,281			12,807			95,239			41,589			—			295,916
Cash and cash equivalents at end of the year	$	177,877		$	10,871		$	82,903		$	17,032		$	—		$	288,683

F-52

EX-1.2

Exhibit 1.2

NEW ARTICLES OF ASSOCIATION

of

STATS CHIPPAC LTD.
(formerly known as ST ASSEMBLY TEST SERVICES LTD)
(Adopted by Special Resolution passed on
19 January 2000)
(Amended by Special Resolutions passed on
31 May 2001, 30 May 2002, 28 May 2003, 4 August 2004, 25 April 2006 and 23 April 2008)

C O N T E N T S

	PAGE
ARTICLES OF ASSOCIATION:-
Preliminary		1
Share Capital		3
Issue of Shares		3
Treasury Shares		4
Variation of Rights		4
Alteration of Share Capital		4
Shares		5
Share Certificates		6
Calls on Shares		8
Forfeiture and Lien		9
Transfer of Shares		10
Transmission of Shares		12
Stock		13
General Meetings		13
Notice of General Meetings		14
Proceedings at General Meetings		15
Votes of Members		17
Corporations Acting by Representatives		19
Directors		19
Chief Executive Officer or President		21
Appointment and Retirement of Directors		22
Alternate Directors		23

C O N T E N T S

	PAGE
Meetings and Proceedings of Directors		24
Borrowing Powers		26
General Powers of Directors		26
Secretary		27
The Seal		27
Authentication of Documents		27
Reserves		28
Dividends		28
Bonus Issues and Capitalisation of Profits and Reserves		30
Accounts		32
Auditors		33
Notices		33
Winding Up		34
Indemnity		34
Secrecy		35

THE COMPANIES ACT, CHAPTER 50

PUBLIC COMPANY LIMITED BY SHARES

ARTICLES OF ASSOCIATION

of

*STATS CHIPPAC LTD.
(formerly known as ST ASSEMBLY TEST SERVICES LTD)
(Adopted by Special Resolution passed on 19 January 2000)

PRELIMINARY

1. The regulations in Table A in the Fourth Schedule to the Companies Act, Chapter 50 (as amended) shall not apply to the Company.

**2. In these presents (if not inconsistent with the subject or context) the words and expressions set out in the first column below shall bear the meanings set opposite to them respectively.

“The Act”	The Companies Act, Chapter 50.
“The Company”	ST Assembly Test Services Ltd.
“In writing”	Written or produced by any substitute for writing or partly one and partly another.
“Month”	Calendar month.
“Office”	The registered office of the Company for the time being.
“Ordinary Shares”	The ordinary shares in the capital of the Company.
“Paid”	Paid or credited as paid.
“Seal”	The Common Seal of the Company.
“The Statutes”	The Act and every other Act for the time being in force concerning companies and affecting the Company.

*	The Name of the Company was changed to “STATS CHIPPAC LTD.” with effect from 5 August 2004.
**	Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Table “A” not to apply.

Interpretation.

2

“These presents”	These Articles of Association as from time to time altered.
“Year”	Calendar year.

     The expressions “Depositor”, “Depository”, “Depository Agent” and “Depository Register” and “treasury shares” shall have the meanings ascribed to them respectively in the Act.

     References in these presents to “holders” of shares or a class of shares shall:-

(a)	exclude the Depository or its nominee (as the case may be) except where otherwise expressly provided in these presents or where the term “registered holders” or “registered holder” is used in these presents; and
(b)	where the context so requires, be deemed to include references to Depositors whose names are entered in the Depository Register in respect of those shares, and
(c)	except where otherwise expressly provided in these presents, exclude the Company in relation to shares held by it as treasury shares,

and “holding” and “held” shall be construed accordingly.

     The expression “Director” shall have the meaning ascribed to it in the Act and shall, where the context so requires, be deemed to include a reference to an Alternate Director.

     References in these Articles to “member” shall, where the Act requires, exclude the Company where it is a member by reason of its holding of its shares as treasury shares.

     The expression “Secretary” shall include any person appointed by the Directors to perform any of the duties of the Secretary and where two or more persons are appointed to act as Joint Secretaries shall include any one of those persons.

     All such of the provisions of these presents as are applicable to paid-up shares shall apply to stock, and the words “share” and “shareholder” shall be construed accordingly.

     Words denoting the singular shall include the plural and vice versa. Words denoting the masculine shall include the feminine. Words denoting persons shall include corporations.

     Any reference in these presents to any enactment is a reference to that enactment as for the time being amended or re-enacted.

     Subject as aforesaid any words or expression defined in the Act shall (if not inconsistent with the subject or context) bear the same meanings in these presents.

3

     A Special Resolution shall be effective for any purpose for which an Ordinary Resolution is expressed to be required under any provision of these presents.

     The headnotes are inserted for convenience only and shall not affect the construction of these presents.

*3. See footnote below.

ISSUE OF SHARES

**4. Subject to the Statutes and to these presents, no shares may be issued by the Directors without the prior approval of the Company in General Meeting but subject thereto and to Article 8, and to any special rights attached to any shares for the time being issued, the Directors may allot or grant options over or otherwise dispose of the same to such persons on such terms and conditions and for such consideration and at such time and subject or not to the payment of any part of the amount thereof in cash as the Directors may think fit, and any shares may be issued with such preferential, deferred, qualified or special rights, privileges or conditions as the Directors may think fit, and preference shares may be issued which are or at the option of the Company are liable to be redeemed, the terms and manner of redemption being determined by the Directors, Provided always that:-

no shares shall be issued to transfer a controlling interest in the Company without the prior approval of the members in a General Meeting.

Issue of Shares.

**5. (A) Preference shares may be issued subject to such limitation in respect thereof as may be prescribed by any Stock Exchange upon which shares in the Company may be listed. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving of notices, reports and balance sheets and attending General Meetings of the Company, and preference shareholders shall also have the right to vote at any meeting convened for the purpose of reducing the capital or winding-up or sanctioning a sale of the undertaking or where the proposal to be submitted to the meeting directly affects their rights and privileges or when the dividend on the preference shares is more than six months in arrear.

     (B) The Company has power to issue further preference capital ranking equally with, or in priority to, preference shares already issued.

*	Deleted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.
**	Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Rights of preference shareholders.

4

TREASURY SHARES

*5A. The Company shall not exercise any right in respect of treasury shares other than as provided by the Act. Subject thereto, the Company may hold or deal with its treasury shares in the manner authorised by, or prescribed pursuant to, the Act.

Treasury Shares

VARIATION OF RIGHTS

**6. (A) Whenever the share capital of the Company is divided into different classes of shares, the special rights attached to any class may, subject to the provisions of the Statutes, be varied or abrogated either with the consent in writing of the holders of three-quarters of the issued shares of the class or with the sanction of a Special Resolution passed at a separate General Meeting of the holders of the shares of the class (but not otherwise) and may be so varied or abrogated either whilst the Company is a going concern or during or in contemplation of a winding-up. To every such separate General Meeting all the provisions of these presents relating to General Meetings of the Company and to the proceedings thereat shall mutatis mutandis apply, except that the necessary quorum shall be two persons at least holding or representing by proxy at least one-third of the issued shares of the class and that any holder of shares of the class present in person or by proxy may demand a poll and that every such holder shall on a poll have one vote for every share of the class held by him, Provided always that where the necessary majority for such a Special Resolution is not obtained at such General Meeting, consent in writing if obtained from the holders of three-quarters of the issued shares of the class concerned within two months of such General Meeting shall be as valid and effectual as a Special Resolution carried at such General Meeting. The foregoing provisions of this Article shall apply to the variation or abrogation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class the special rights whereof are to be varied.

Variation of rights.

     (B) The special rights attached to any class of shares having preferential rights shall not unless otherwise expressly provided by the terms of issue thereof be deemed to be varied by the creation or issue of further shares ranking as regards participation in the profits or assets of the Company in some or all respects pari passu therewith but in no respect in priority thereto.

Creation or issue of further shares with special rights.

ALTERATION OF SHARE CAPITAL

***7. See footnote below.

8. (A) The Company may by Ordinary Resolution in General Meeting give to the Directors a general authority, either unconditionally or subject to such conditions as may be specified in the Ordinary Resolution, to issue shares (whether by way of rights, bonus or otherwise) where, unless previously revoked or varied by the Company in General Meeting, such authority to issue shares does not continue beyond the conclusion of the Annual General Meeting of the Company next following the passing of the Ordinary Resolution or the date by which such Annual General Meeting is required to be held, or the expiration of such other period as may be prescribed by the Statutes (whichever is the earliest).

*	Inserted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.
**	Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.
***	Deleted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

 
Authority to issue shares.

5

     (B) Except so far as otherwise provided by the conditions of issue or by these presents, all new shares shall be subject to the provisions of the Statutes and of these presents with reference to allotment, payment of calls, lien, transfer, transmission, forfeiture and otherwise.

*9. The Company may by Ordinary Resolution:-

(a)	consolidate and divide all or any of its shares;
(b)	sub-divide its shares, or any of them (subject, nevertheless, to the provisions of the Statutes), and so that the resolution whereby any share is sub-divided may determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may, as compared with the others, have any such preferred, deferred or other special rights, or be subject to any such restrictions, as the Company has power to attach to unissued or new shares;
(c)	subject to the provisions of the Statutes, convert any class of shares into any other class of shares.

Power to consolidate, cancel and sub-divide shares.

*10. (A) The Company may reduce its share capital or any undistributable reserve in any manner and with and subject to any incident authorised and consent required by law. Without prejudice to the generality of the foregoing, upon cancellation of any share purchased or otherwise acquired by the Company pursuant to these presents, the number of issued shares of the Company shall be diminished by the number of the shares so cancelled, and, where any such cancelled share was purchased or acquired out of the capital of the Company, the amount of the share capital of the Company shall be reduced accordingly.

Power to reduce share capital.

     (B) The Company may, subject to and in accordance with the Statutes, purchase or otherwise acquire its issued shares on such terms and in such manner as the Company may from time to time think fit. If required by the Statutes, any share which is so purchased or acquired by the Company shall, unless held in treasury in accordance with the Act, be deemed to be cancelled immediately on purchase or acquisition by the Company. On the cancellation of any share as aforesaid, the rights and privileges attached to that share shall expire. In any other instance, the Company may hold or deal with any such share which is so purchased or acquired by it in such manner as may be permitted by, and in accordance with, the Statutes.

Company may acquire its own issued ordinary shares.

SHARES

11. Except as required by law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or compelled in any way to recognise any equitable, contingent, future or partial interest in any share, or any interest in any fractional part of a share, or (except only as by these presents or by law otherwise provided) any other right in respect of any share, except an absolute right to the entirety thereof in the person (other than the Depository) entered in the Register of Members as the registered holder thereof or (as the case may be) person whose name is entered in the Depository Register in respect of that share.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Exclusion of equities.

6

12. Without prejudice to any special rights previously conferred on the holders of any shares or class of shares for the time being issued, any share in the Company may be issued with such preferred, deferred or other special rights, or subject to such restrictions, whether as regards dividend, return of capital, voting or otherwise, as the Company may from time to time by Ordinary Resolution determine (or, in the absence of any such determination, as the Directors may determine) and subject to the provisions of the Statutes the Company may issue preference shares which are, or at the option of the Company are, liable to be redeemed.

Redeemable preference shares.

13. Subject to the provisions of these presents and of the Statutes relating to authority and of any resolution of the Company in General Meeting passed pursuant thereto, all unissued shares shall be at the disposal of the Directors and they may allot (with or without conferring a right of renunciation), grant options over or otherwise dispose of them to such persons, at such times and on such terms as they think proper.

Unissued shares.

*14. The Company may pay commissions or brokerage on any issue of shares at such rate or amount and in such manner as the Directors may deem fit. Such commissions or brokerage may be satisfied by the payment of cash or the allotment of fully or partly paid shares or partly in one way and partly in the other.

Power to pay commission and brokerage.

15. Subject to the terms and conditions of any application for shares, the Directors shall allot shares applied for within thirty days of the closing date of any such application. The Directors may, at any time after the allotment of any share but before any person has been entered in the Register of Members as the holder or (as the case may be) before that share is entered against the name of a Depositor in the Depository Register, recognise a renunciation thereof by the allottee in favour of some other person and may accord to any allottee of a share a right to effect such renunciation upon and subject to such terms and conditions as the Directors may think fit to impose.

Renunciation of allotment.

SHARE CERTIFICATES

*16. Every share certificate shall be issued under the Seal and shall specify the number and class of shares to which it relates and the amount paid and amount (if any) unpaid thereon and shall bear the autographic or facsimile signatures of one Director and the Secretary or a second Director or some other person appointed by the Directors. The facsimile signatures may be reproduced by mechanical, electronic or other method approved by the Directors. No certificate shall be issued representing shares of more than one class.

Form of share certificate.

17. (A) The Company shall not be bound to register more than three persons as the registered holder of a share except in the case of executors or administrators of the estate of a deceased member.

     (B) In the case of a share registered jointly in the names of several persons the Company shall not be bound to issue more than one certificate therefor and delivery of a certificate to any one of the registered joint holders shall be sufficient delivery to all.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Rights and liabilities of joint holders.

7

*18. Every person whose name is entered as a member in the Register of Members shall be entitled to receive within thirty days of the closing date of any application for shares or, as the case may be, the date of lodgement of a registrable transfer, one certificate for all his shares of any one class or several certificates in reasonable denominations each for a part of the shares so allotted or transferred. Where such a member transfers part only of the shares comprised in a certificate, or where such a member requires the Company to cancel any certificate or certificates and issue new certificates for the purpose of subdividing his holding in a different manner the old certificate or certificates shall be cancelled and a new certificate or certificates for the balance of such shares issued in lieu thereof and such member shall pay a maximum fee of $2 for each new certificate or such other fee as the Directors may from time to time determine.

Entitlement to certificate.

19. Where some only of the shares comprised in a share certificate are transferred the old certificate shall be cancelled and a new certificate for the balance of such shares issued in lieu without charge.

Shares comprised in certificate.

20. (A) Any two or more certificates representing shares of any one class held by any person whose name is entered in the Register of Members may at his request be cancelled and a single new certificate for such shares issued in lieu without charge.

     (B) If any person whose name is entered in the Register of Members shall surrender for cancellation a share certificate representing shares held by him and request the Company to issue in lieu two or more share certificates representing such shares in such proportions as he may specify, the Directors may, if they think fit, comply with such request. Such person shall (unless such fee is waived by the Directors) pay a maximum fee of $2 for each share certificate issued in lieu of a share certificate surrendered for cancellation or such other fee as the Directors may from time to time determine.

Surrender for cancellation of certificate.

     *(C) Subject to the provisions of the Statutes, if any share certificate shall be defaced, worn out, destroyed, lost or stolen, it may be renewed on such evidence being produced and a letter of indemnity (if required) being given by the shareholder, transferee, person entitled, purchaser, member firm or member company of any Stock Exchange upon which the shares in the Company may be listed or on behalf of its or their client or clients as the Directors of the Company shall require, and (in case of defacement or wearing out) on delivery up of the old certificate and in any case on payment of such sum not exceeding $2 as the Directors may from time to time require. In the case of destruction, loss or theft, a shareholder or person entitled to whom such renewed certificate is given shall also bear the loss and pay to the Company all expenses incidental to the investigations by the Company of the evidence of such destruction or loss.

     (D) In the case of shares registered jointly in the names of several persons any such request may be made by any one of the registered joint holders.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Replacement of certificate.

8

CALLS ON SHARES

*21. The Directors may from time to time make calls upon the members in respect of any moneys unpaid on their shares but subject always to the terms of issue of such shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed and may be made payable by instalments.

Calls on shares and time when made.

22. Each member shall (subject to receiving at least fourteen days’ notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof. A call may be revoked or postponed as the Directors may determine.

Calls on shares and when payable.

23. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment thereof to the time of actual payment at such rate (not exceeding ten per cent. per annum) as the Directors determine but the Directors shall be at liberty in any case or cases to waive payment of such interest wholly or in part.

Interest on calls.

*24. Any sum which by the terms of issue of a share becomes payable upon allotment or at any fixed date shall for all the purposes of these presents be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable. In case of non-payment all the relevant provisions of these presents as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

Sum due on allotment.

25. No member shall be entitled to receive any dividend or vote at any meeting or upon a poll, until he shall have paid all calls for the time being due and payable on every share held by him, whether alone or jointly with any other person, together with interest and expenses (if any).

Rights of member suspended until calls are duly paid.

26. The Directors may on the issue of shares differentiate between the holders as to the amount of calls to be paid and the times of payment.

Power to differentiate.

*27. The Directors may if they think fit receive from any member willing to advance the same all or any part of the moneys uncalled and unpaid upon the shares held by him and such payment in advance of calls shall extinguish pro tanto the liability upon the shares in respect of which it is made and upon the money so received (until and to the extent that the same would but for such advance become payable) the Company may pay interest at such rate (not exceeding eight per cent. per annum) as the member paying such sum and the Directors may agree. Capital paid on shares in advance of calls shall not while carrying interest confer a right to participate in profits.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Payment in advance of calls.

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FORFEITURE AND LIEN

28. If a member fails to pay in full any call or instalment of a call on the due date for payment thereof, the Directors may at any time thereafter serve a notice on him requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued thereon and any expenses incurred by the Company by reason of such non-payment.

Notice requiring payment of calls.

29. The notice shall name a further day (not being less than fourteen days from the date of service of the notice) on or before which and the place where the payment required by the notice is to be made, and shall state that in the event of non-payment in accordance therewith the shares on which the call has been made will be liable to be forfeited.

Notice to state time and place.

30. If the requirements of any such notice as aforesaid are not complied with, any share in respect of which such notice has been given may at any time thereafter, before payment of all calls and interest and expenses due in respect thereof has been made, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited share and not actually paid before forfeiture. The Directors may accept a surrender of any share liable to be forfeited hereunder.

Forfeiture on non-compliance with notice.

31. A share so forfeited or surrendered shall become the property of the Company and may be sold, re-allotted or otherwise disposed of either to the person who was before such forfeiture or surrender the holder thereof or entitled thereto or to any other person upon such terms and in such manner as the Directors shall think fit and at any time before a sale, re-allotment or disposition the forfeiture or surrender may be cancelled on such terms as the Directors think fit. The Directors may, if necessary, authorise some person to transfer or effect the transfer of a forfeited or surrendered share to any such other person as aforesaid.

Sale or disposition of forfeited or surrendered shares.

32. A member whose shares have been forfeited or surrendered shall cease to be a member in respect of the shares but shall notwithstanding the forfeiture or surrender remain liable to pay to the Company all moneys which at the date of forfeiture or surrender were presently payable by him to the Company in respect of the shares with interest thereon at eight per cent. per annum (or such lower rate as the Directors may determine) from the date of forfeiture or surrender until payment and the Directors may at their absolute discretion enforce payment without any allowance for the value of the shares at that time of forfeiture or surrender or waive payment in whole or in part.

Rights and liabilities of members whose shares have been forfeited or surrendered.

33. The Company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such share and for all moneys as the Company may be called upon by law to pay in respect of the shares of the member or deceased member. The Directors may waive any lien which has arisen and may resolve that any share shall for some limited period be exempt wholly or partially from the provisions of this Article.

Company’s lien.

34. The Company may sell in such manner as the Directors think fit any share on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of fourteen days after a notice in writing stating and demanding payment of the sum presently payable and giving notice of intention to sell in default shall have been given to the holder for the time being of the share or the person entitled thereto by reason of his

Sale of shares subject to lien.

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death or bankruptcy.

35. The net proceeds of such sale after payment of the costs of such sale shall be applied in or towards payment or satisfaction of the debts or liabilities and any residue shall be paid to the person entitled to the shares at the time of the sale or to his executors, administrators or assigns, as he may direct. For the purpose of giving effect to any such sale the Directors may authorise some person to transfer or effect the transfer of the shares sold to the purchaser.

Application of proceeds of such sale.

36. A statutory declaration in writing that the declarant is a Director or the Secretary of the Company and that a share has been duly forfeited or surrendered or sold to satisfy a lien of the Company on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. Such declaration and the receipt of the Company for the consideration (if any) given for the share on the sale, re-allotment or disposal thereof together (where the same be required) with the share certificate delivered to a purchaser (or where the purchaser is a Depositor, to the Depository) or allottee thereof shall (subject to the execution of a transfer if the same be required) constitute a good title to the share and the share shall be registered in the name of the person to whom the share is sold, re-allotted or disposed of or, where such person is a Depositor, the Company shall procure that his name be entered in the Depository Register in respect of the share so sold, re-allotted or disposed of. Such person shall not be bound to see to the application of the purchase money (if any) nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the forfeiture, surrender, sale, re-allotment or disposal of the share.

Title to shares forfeited and right of purchaser of such share.

TRANSFER OF SHARES

*37. All transfers of the legal title in shares may be effected by the registered holders thereof by transfer in writing in any form acceptable to the Directors. The instrument of transfer of any share shall be signed by or on behalf of both the transferor and the transferee and be witnessed, Provided that an instrument of transfer in respect of which the transferee is the Depository or its nominee (as the case may be) shall be effective although not signed or witnessed by or on behalf of the Depository or its nominee (as the case may be). The transferor shall remain the holder of the shares concerned until the name of the transferee is entered in the Register of Members in respect thereof.

Form of transfer.

38. The Register of Members may be closed at such times and for such period as the Directors may from time to time determine, provided always that such Register shall not be closed for more than thirty days in any year.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Closing of Register of Members.

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39. There shall be no restriction on the transfer of fully paid up shares (except where required by law) but the Directors may, in their sole discretion, decline to register any transfer of shares upon which the Company has a lien and in the case of shares not fully paid up may refuse to register a transfer to a transferee of whom they do not approve, Provided always that in the event of the Directors refusing to register a transfer of shares, they shall within thirty days beginning with the date on which the application for a transfer of shares was made, serve a notice in writing to the applicant stating the facts which are considered to justify the refusal as required by the Statutes.

Directors’ right to refuse to register a transfer.

*40. The Directors may in their sole discretion refuse to register any instrument of transfer of shares unless:-

(a)	such fee not exceeding $2 as the Directors may from time to time require, is paid to the Company in respect thereof;
(b)	the amount of proper duty (if any) with which each instrument of transfer is chargeable under any law for the time being in force relating to stamps is paid;
(c)	the instrument of transfer is deposited at the Office or at such other place (if any) as the Directors may appoint accompanied by a certificate of payment of stamp duty (if any), the certificates of the shares to which the transfer relates, and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer and, if the instrument of transfer is executed by some other person on his behalf, the authority of the person so to do; and
(d)	the instrument of transfer is in respect of only one class of shares.

When Directors may refuse to register a transfer.

41. If the Directors refuse to register a transfer of any shares, they shall within thirty days after the date on which the application for transfer was lodged with the Company send to the transferor and the transferee a notice in writing stating the reasons justifying the refusal to transfer and a notice of refusal as required by the Statutes.

Notice on refusal to register a transfer.

42. All instruments of transfer which are registered may be retained by the Company.

Retention of transfers.

43. There shall be paid to the Company in respect of the registration of any instrument of transfer or probate or letters of administration or certificate of marriage or death or stop notice or power of attorney or other document relating to or affecting the title to any shares or otherwise for making any entry in the Register of Members affecting the title to any shares such fee not exceeding $2 as the Directors may from time to time require or prescribe.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Fee for registration of probate etc.

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44. The Company shall be entitled to destroy all instruments of transfer which have been registered at any time after the expiration of six years from the date of registration thereof and all dividend mandates and notifications of change of address at any time after the expiration of six years from the date of recording thereof and all share certificates which have been cancelled at any time after the expiration of six years from the date of the cancellation thereof and it shall conclusively be presumed in favour of the Company that every entry in the Register of Members purporting to have been made on the basis of an instrument of transfer or other document so destroyed was duly and properly made and every instrument of transfer so destroyed was a valid and effective instrument duly and properly registered and every share certificate so destroyed was a valid and effective certificate duly and properly cancelled and every other document hereinbefore mentioned so destroyed was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company; Provided always that:-

(a)	the provisions aforesaid shall apply only to the destruction of a document in good faith and without notice of any claim (regardless of the parties thereto) to which the document might be relevant;
(b)	nothing herein contained shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than as aforesaid or in any other circumstances which would not attach to the Company in the absence of this Article; and
(c)	references herein to the destruction of any document include references to the disposal thereof in any manner.

Destruction of instrument of transfer.

TRANSMISSION OF SHARES

45. (A) In the case of the death of a member whose name is entered in the Register of Members, the survivors or survivor where the deceased was a joint holder, and the executors or administrators of the deceased where he was a sole or only surviving holder, shall be the only person(s) recognised by the Company as having any title to his interest in the shares.

      (B) In the case of the death of a member who is a Depositor, the survivors or survivor where the deceased is a joint holder, and the executors or administrators of the deceased where he was a sole or only surviving holder and where such executors or administrators are entered in the Depository Register in respect of any shares of the deceased member, shall be the only person(s) recognised by the Company as having any title to his interest in the shares.

      (C) Nothing in this Article shall release the estate of a deceased holder (whether sole or joint) from any liability in respect of any share held by him.

Transmission.

46. Any person becoming entitled to the legal title in a share in consequence of the death or bankruptcy of a person whose name is entered in the Register of Members may (subject as hereinafter provided) upon supplying to the Company such evidence as the Directors may reasonably require to show his legal title to the share either be registered himself as holder of the share upon giving to the Company notice in writing of such desire or transfer such share to some other person.

Persons becoming entitled to shares on death or bankruptcy of member.

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All the limitations, restrictions and provisions of these presents relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or bankruptcy of the person whose name is entered in the Register of Members had not occurred and the notice or transfer were a transfer executed by such person.

47. Save as otherwise provided by or in accordance with these presents, a person becoming entitled to a share pursuant to Article 45(A) or (B) or Article 46 (upon supplying to the Company such evidence as the Directors may reasonably require to show his title to the share) shall be entitled to the same dividends and other advantages as those to which he would be entitled if he were the member in respect of the share except that he shall not be entitled in respect thereof (except with the authority of the Directors) to exercise any right conferred by membership in relation to meetings of the Company until he shall have been registered as a member in the Register of Members or his name shall have been entered in the Depository Register in respect of the share.

Rights of persons entitled to shares on transmission.

STOCK

*48. The Company may from time to time by Ordinary Resolution convert any paid-up shares into stock and may from time to time by like resolution reconvert any stock into paid-up shares.

Power to convert into stock.

*49. The holders of stock may transfer the same or any part thereof in the same manner and subject to the same Articles as and subject to which the shares from which the stock arose might previously to conversion have been transferred (or as near thereto as circumstances admit) but no stock shall be transferable except in such units as the Directors may from time to time determine.

Transfer of stock.

*50. The holders of stock shall, according to the number of stock units held by them, have the same rights, privileges and advantages as regards dividend, return of capital, voting and other matters, as if they held the shares from which the stock arose; but no such privilege or advantage (except as regards participation in the profits or assets of the Company) shall be conferred by the number of stock units which would not, if existing in shares, have conferred such privilege or advantage; and no such conversion shall affect or prejudice any preference or other special privileges attached to the shares so converted.

Rights of stockholders.

GENERAL MEETINGS

51. An Annual General Meeting shall be held once in every year, at such time (within a period of not more than fifteen months after the holding of the last preceding Annual General Meeting) and place as may be determined by the Directors. All other General Meetings shall be called Extraordinary General Meetings.

Annual General Meeting.

52. The Directors may whenever they think fit, and shall on requisition in accordance with the Statutes, proceed with proper expedition to convene an Extraordinary General Meeting.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Extraordinary General Meeting.

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NOTICE OF GENERAL MEETINGS

*53. Any General Meeting at which it is proposed to pass a Special Resolution or (save as provided by the Statutes) a resolution of which special notice has been given to the Company, shall be called by twenty-one days’ notice in writing at the least and an Annual General Meeting and any other Extraordinary General Meeting by fourteen days’ notice in writing at the least. The period of notice shall in each case be exclusive of the day on which it is served or deemed to be served and of the day on which the meeting is to be held and shall be given in the manner hereinafter mentioned to all members other than such as are not under the provisions of these presents and the Act entitled to receive such notices from the Company; Provided that a General Meeting notwithstanding that it has been called by a shorter notice than that specified above shall be deemed to have been duly called if it is so agreed:-

(a)	in the case of an Annual General Meeting, by all the members entitled to attend and vote thereat; and
(b)	in the case of an Extraordinary General Meeting, by a majority in number of the members having a right to attend and vote thereat, being a majority together holding not less than 95 per cent. of the total voting rights of all members having a right to vote at that meeting.

Provided also that the accidental omission to give notice to or the non-receipt of notice by any person entitled thereto shall not invalidate the proceedings at any General Meeting. At least 14 days’ notice of any General Meeting shall be given by advertisement in the daily press and in writing to any Stock Exchange upon which shares in the Company may be listed.

Notice of Meetings.

54. (A) Every notice calling a General Meeting shall specify the place and the day and hour of the meeting, and there shall appear with reasonable prominence in every such notice a statement that a member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of him and that a proxy need not be a member of the Company.

     (B) In the case of an Annual General Meeting, the notice shall also specify the meeting as such.

     (C) In the case of any General Meeting at which business other than routine business is to be transacted, the notice shall specify the general nature of such business; and if any resolution is to be proposed as a Special Resolution, the notice shall contain a statement to that effect.

Contents of notice.

55. Routine business shall mean and include only business transacted at an Annual General Meeting of the following classes, that is to say:-

(a) declaring dividends;

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Routine business.

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(b)	receiving and adopting the accounts, the reports of the Directors and Auditors and other documents required to be attached or annexed to the accounts;
(c)	appointing or re-appointing Directors to fill vacancies arising at the meeting on retirement whether by rotation or otherwise;
(d)	re-appointing the retiring Auditors (unless they were last appointed otherwise than by the Company in General Meeting);
(e)	fixing the remuneration of the Auditors or determining the manner in which such remuneration is to be fixed; and
(f)	fixing the remuneration of the Directors proposed to be paid under Article 81.

56. Any notice of a General Meeting to consider special business shall be accompanied by a statement regarding the effect of any proposed resolution on the Company in respect of such special business.

Notice to state effect of special business.

PROCEEDINGS AT GENERAL MEETINGS

57. The Chairman of the Board of Directors, failing whom the Deputy Chairman, shall preside as chairman at a General Meeting. If there be no such Chairman or Deputy Chairman, or if at any meeting neither be present within 15 minutes after the time appointed for holding the meeting and willing to act, the Directors present shall choose one of their number (or, if no Director be present or if all the Directors present decline to take the chair, the members present shall choose one of their number) to be chairman of the meeting.

Chairman.

58. No business other than the appointment of a chairman shall be transacted at any General Meeting unless a quorum is present at the time when the meeting proceeds to business. Save as herein otherwise provided, the quorum at any General Meeting shall be two or more members holding or representing in aggregate not less than 33 1/3 per cent. of the total issued and fully paid up shares in the capital of the Company, present in person or by proxy.

Quorum.

59. If within 30 minutes from the time appointed for a General Meeting (or such longer interval as the chairman of the meeting may think fit to allow) a quorum is not present, the meeting, if convened on the requisition of members, shall be dissolved. In any other case it shall stand adjourned to the same day in the next week (or if that day is a public holiday then to the next business day following that public holiday) at the same time and place or such other day, time or place as the Directors may by not less than ten days’ notice appoint. At the adjourned meeting any one or more members present in person or by proxy shall be a quorum.

If quorum not present, adjournment or dissolution of meeting.

60. The chairman of any General Meeting at which a quorum is present may with the consent of the meeting (and shall if so directed by the meeting) adjourn the meeting from time to time (or sine die) and from place to place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place. Where a meeting is adjourned sine die, the time and place for the adjourned meeting shall be fixed by the Directors. When a meeting is adjourned for 30 days or more or sine die, not less than

Adjournment.

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seven days’ notice of the adjourned meeting shall be given in like manner as in the case of the original meeting.

61. Save as hereinbefore expressly provided, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

Notice of adjournment.

62. If an amendment shall be proposed to any resolution under consideration but shall in good faith be ruled out of order by the chairman of the meeting, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling. In the case of a resolution duly proposed as a Special Resolution, no amendment thereto (other than a mere clerical amendment to correct a patent error) may in any event be considered or voted upon.

Amendment to resolution.

*63. At any General Meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by:-

(a)	the chairman of the meeting; or
(b)	not less than five members present in person or by proxy and entitled to vote at the meeting; or
(c)	a member present in person or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or
(d)	a member present in person or by proxy and holding not less than 10 per cent. of the total number of paid-up shares of the Company (excluding treasury shares);

Provided always that no poll shall be demanded on the choice of a chairman or on a question of adjournment.

Method of voting.

*64. A demand for a poll may be withdrawn only with the approval of the meeting. Unless a poll is required a declaration by the chairman of the meeting that a resolution has been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the minute book, shall be conclusive evidence of that fact without proof of the number or proportion of the votes recorded for or against such resolution. If a poll is required, it shall be taken in such manner (including the use of ballot or voting papers) as the chairman of the meeting may direct, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The chairman of the meeting may (and if so directed by the meeting shall) appoint scrutineers and may adjourn the meeting to some place and time fixed by him for the purpose of declaring the result of the poll.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Taking a poll.

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65. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded shall be entitled to a casting vote.

Casting vote of Chairman.

66. A poll demanded on any question shall be taken either immediately or at such subsequent time (not being more than 30 days from the date of the meeting) and place as the chairman may direct. No notice need be given of a poll not taken immediately. The demand for a poll shall not prevent the continuance of the meeting for the transaction of any business other than the question on which the poll has been demanded.

Polls and continuance of business after demand for a poll.

VOTES OF MEMBERS

*67. Subject and without prejudice to any special privileges or restrictions as to voting for the time being attached to any special class of shares for the time being forming part of the capital of the Company and to Article 5A each member entitled to vote may vote in person or by proxy. On a show of hands every member who is present in person or by proxy shall have one vote (provided that in the case of a member who is represented by two proxies, only one of the two proxies as determined by that member or, failing such determination, by the Chairman of the meeting (or by a person authorised by him) in his sole discretion shall be entitled to vote on a show of hands) and on a poll, every member who is present in person or by proxy shall have one vote for every share which he holds or represents. For the purpose of determining the number of votes which a member, being a Depositor, or his proxy may cast at any General Meeting on a poll, the reference to shares held or represented shall, in relation to shares of that Depositor, be the number of shares entered against his name in the Depository Register as at 48 hours before the time of the relevant General Meeting as certified by the Depository to the Company.

Voting rights of members.

68. In the case of joint holders of a share the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members or (as the case may be) the Depository Register in respect of the share.

Voting rights of joint holders.

69. Where in Singapore or elsewhere a receiver or other person (by whatever name called) has been appointed by any court claiming jurisdiction in that behalf to exercise powers with respect to the property or affairs of any member on the ground (however formulated) of mental disorder, the Directors may in their absolute discretion, upon or subject to production of such evidence of the appointment as the Directors may require, permit such receiver or other person on behalf of such member to vote in person or by proxy at any General Meeting or to exercise any other right conferred by membership in relation to meetings of the Company.

Voting rights of receiver or court appointed persons.

70. No member shall, unless the Directors otherwise determine, be entitled in respect of shares held by him to vote at a General Meeting either personally or by proxy or to exercise any other right conferred by membership in relation to meetings of the Company if any call or other sum presently payable by him to the Company in respect of such shares remains unpaid.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Rights to be present and to vote.

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71. No objection shall be raised as to the admissibility of any vote except at the meeting or adjourned meeting at which the vote objected to is or may be given or tendered and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection shall be referred to the chairman of the meeting whose decision shall be final and conclusive.

When objection to admissibility of votes may be made.

72. On a poll, votes may be given either personally or by proxy and a person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.

Voting.

73. (A) A member may appoint not more than two proxies to attend and vote at the same General Meeting provided that if the member is a Depositor, the Company shall be entitled and bound:-

(a)

to reject any instrument of proxy lodged if the Depositor is not shown to have any shares entered against his name in the Depository Register as at 48 hours before the time of the relevant General Meeting as certified by the Depository to the Company; and

(b)

to accept as the maximum number of votes which in aggregate the proxy or proxies appointed by the Depositor is or are able to cast on a poll a number which is the number of shares entered against the name of that Depositor in the Depository Register as at 48 hours before the time of the relevant General Meeting as certified by the Depository to the Company, whether that number is greater or smaller than the number specified in any instrument of proxy executed by or on behalf of that Depositor.

Appointment of proxies.

     (B) The Company shall be entitled and bound, in determining rights to vote and other matters in respect of a completed instrument of proxy submitted to it, to have regard to the instructions (if any) given by and the notes (if any) set out in the instrument of proxy.

Notes and instructions.

     (C) In any case where a form of proxy appoints more than one proxy, the proportion of the shareholding concerned to be represented by each proxy shall be specified in the form of proxy.

Proportion in shareholding to be represented by proxies.

     (D) A proxy need not be a member of the Company.

Proxy need not be a member.

74. (A) An instrument appointing a proxy shall be in writing in any usual or common form or in any other form which the Directors may approve and:-

(a)	in the case of an individual, shall be signed by the appointor or his attorney; and
(b)	in the case of a corporation, shall be either given under its common seal or signed on its behalf by an attorney or a duly authorised officer of the corporation.

Instrument appointing proxies.

     (B) The signature on such instrument need not be witnessed. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous

19

registration with the Company) be lodged with the instrument of proxy pursuant to the next following Article, failing which the instrument may be treated as invalid.

75. An instrument appointing a proxy must be left at such place or one of such places (if any) as may be specified for that purpose in or by way of note to or in any document accompanying the notice convening the meeting (or, if no place is so specified, at the Office) not less than 48 hours before the time appointed for the holding of the meeting or adjourned meeting or (in the case of a poll taken otherwise than at or on the same day as the meeting or adjourned meeting) for the taking of the poll at which it is to be used, and in default shall not be treated as valid. The instrument shall, unless the contrary is stated thereon, be valid as well for any adjournment of the meeting as for the meeting to which it relates; Provided that an instrument of proxy relating to more than one meeting (including any adjournment thereof) having once been so delivered for the purposes of any meeting shall not be required again to be delivered for the purposes of any subsequent meeting to which it relates.

Deposit of instrument of proxy.

76. An instrument appointing a proxy shall be deemed to include the right to demand or join in demanding a poll, to move any resolution or amendment thereto and to speak at the meeting.

Rights of proxies.

77. A vote cast by proxy shall not be invalidated by the previous death or insanity of the principal or by the revocation of the appointment of the proxy or of the authority under which the appointment was made provided that no intimation in writing of such death, insanity or revocation shall have been received by the Company at the Office at least one hour before the commencement of the meeting or adjourned meeting or (in the case of a poll taken otherwise than at or on the same day as the meeting or adjourned meeting) the time appointed for the taking of the poll at which the vote is cast.

Intervening death or insanity of principal not to revoke proxy.

CORPORATIONS ACTING BY REPRESENTATIVES

*78. Any corporation which is a member of the Company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company. The person so authorised shall be entitled to exercise the same powers on behalf of such corporation as the corporation could exercise if it were an individual member of the Company and such corporation shall for the purposes of these presents (but subject to the Act) be deemed to be present in person at any such meeting if a person so authorised is present thereat.

Corporation acting by representatives.

DIRECTORS

79. The number of Directors shall not be less than two. All Directors of the Company shall be natural persons.

Number and characteristics of Director.

80. A Director shall not be required to hold any shares of the Company by way of qualification. A Director who is not a member of the Company shall nevertheless be entitled to attend and speak at General Meetings.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

No shares qualification for Directors.

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81. The ordinary remuneration of the Directors shall from time to time be determined by an Ordinary Resolution of the Company, shall not be increased except pursuant to an Ordinary Resolution passed at a General Meeting where notice of the proposed increase shall have been given in the notice convening the General Meeting and shall (unless such resolution otherwise provides) be divisible among the Directors as they may agree, or failing agreement, equally, except that any Director who shall hold office for part only of the period in respect of which such remuneration is payable shall be entitled only to rank in such division for a proportion of remuneration related to the period during which he has held office.

Remuneration of Directors.

82. Any Director who holds any executive office, or who serves on any committee of the Directors, or who otherwise performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid such extra remuneration by way of salary, commission or otherwise as the Directors may determine.

Extra remuneration.

83. The Directors may repay to any Director all such reasonable expenses as he may incur in attending and returning from meetings of the Directors or of any committee of the Directors or General Meetings or otherwise in or about the business of the Company.

Expenses.

84. The Directors shall have power to pay and agree to pay pensions or other retirement, superannuation, death or disability benefits to (or to any person in respect of) any Director for the time being holding any executive office and for the purpose of providing any such pensions or other benefits, to contribute to any scheme or fund or to pay premiums.

Pensions etc.

85. A Director may be party to or in any way interested in any contract or arrangement or transaction to which the Company is a party or in which the Company is in any way interested and he may hold and be remunerated in respect of any office or place of profit (other than the office of Auditor of the Company or any subsidiary thereof) under the Company or any other company in which the Company is in any way interested and he (or any firm of which he is a member) may act in a professional capacity for the Company or any such other company and be remunerated therefor and in any such case as aforesaid (save as otherwise agreed) he may retain for his own absolute use and benefit all profits and advantages accruing to him thereunder or in consequence thereof.

Holding of office of profit and contracting with company.

86. A Director who holds any office or possesses any property whereby whether directly or indirectly duties or interests might be created in conflict with his duties or interests as Director shall declare the fact and the nature, character and extent of the conflict at a meeting of the Directors of the Company in accordance with the Statutes.

Declaration of Director’s conflict of interest.

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*87. (A) The Directors may from time to time appoint one or more of their body to be the holder of any executive office (including, where considered appropriate, the office of Chairman or Deputy Chairman) on such terms and for such period as they may (subject to the provisions of the Statutes) determine and, without prejudice to the terms of any contract entered into in any particular case, may at any time revoke any such appointment.

     (B) The appointment of any Director to the office of Chairman or Deputy Chairman shall automatically determine if he ceases to be a Director but without prejudice to any claim for damages for breach of any contract of service between him and the Company.

     (C) The appointment of any Director to any other executive office shall not automatically determine if he ceases from any cause to be a Director, unless the contract or resolution under which he holds office shall expressly state otherwise, in which event such determination shall be without prejudice to any claim for damages for breach of any contract of service between him and the Company.

Appointment to be holder of executive office.

88. The Directors may entrust to and confer upon any Directors holding any executive office any of the powers exercisable by them as Directors upon such terms and conditions and with such restrictions as they think fit, and either collaterally with or to the exclusion of their own powers, and may from time to time revoke, withdraw, alter or vary all or any of such powers.

Powers of executive office holders.

*CHIEF EXECUTIVE OFFICER OR PRESIDENT

*89. The Directors may from time to time appoint one or more of their body to be Chief Executive Officer or President of the Company and may from time to time (subject to the provisions of any contract between him or them and the Company) remove or dismiss him or them from office and appoint another or others in his or their place or places.

Appointment of Chief Executive Officer or President.

*#90. A Chief Executive Officer or President who is a Director shall, subject to the provisions of any contract between him and the Company, be subject to the same provisions as to retirement by rotation, resignation and removal as the other Directors of the Company.

Retirement, removal and resignation of Chief Executive Officer or President.

*91. The remuneration of a Chief Executive Officer or President shall from time to time be fixed by the Directors and may subject to these presents be by way of salary or commission or participation in profits or by any or all these modes.

Remuneration of Chief Executive Officer or President.

*92. A Chief Executive Officer or President shall at all times be subject to the control of the Directors but subject thereto the Directors may from time to time entrust to and confer upon a Chief Executive Officer or President for the time being such of the powers exercisable under these presents by the Directors as they may think fit and may confer such powers for such time and to be exercised on such terms and conditions and with such restrictions as they think expedient and they may confer such powers either collaterally with or to the exclusion of and in substitution for all or any of the powers of the Directors in that behalf and may from time to time revoke, withdraw, alter or vary all or any of such powers.

*	Deleted and substituted by Special Resolution passed at the Eighth Annual General Meeting held on 30 May 2002.
#	Altered by Special Resolution passed at the Fourteenth Annual General Meeting held on 23 April 2008.

Powers of Chief Executive Officer or President.

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APPOINTMENT AND RETIREMENT OF DIRECTORS

93. The office of a Director shall be vacated in any of the following events, namely:-

(a)	if he shall become prohibited by law from acting as a Director; or
(b)	if (not being a Director holding any executive office for a fixed term) he shall resign by writing under his hand left at the Office or if he shall in writing offer to resign and the Directors shall resolve to accept such offer; or
(c)	if he shall have a receiving order made against him or shall compound with his creditors generally; or
(d)	if he becomes of unsound mind or if in Singapore or elsewhere an order shall be made by any court claiming jurisdiction in that behalf on the ground (however formulated) of mental disorder for his detention or for the appointment of a guardian or for the appointment of a receiver or other person (by whatever name called) to exercise powers with respect to his property or affairs; or
(e)	if he is removed by the Company in General Meeting pursuant to Article 98.

Vacation of office of Director.

*94. At each Annual General Meeting one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not less than one-third) shall retire from office by rotation.

Retirement of Directors by rotation.

95. The Directors to retire in every year shall be those subject to retirement by rotation who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. A retiring Director shall be eligible for re-election.

Selection of Directors to retire of rotation.

96. The Company at the meeting at which a Director retires under any provision of these presents may by Ordinary Resolution fill the office being vacated by electing thereto the retiring Director or some other person eligible for appointment. In default the retiring Director shall be deemed to have been re-elected except in any of the following cases:-

(a)	where at such meeting it is expressly resolved not to fill such office or a resolution for the re-election of such Director is put to the meeting and lost;
(b)	where such Director has given notice in writing to the Company that he is unwilling to be re-elected;

* Deleted and substituted by Special Resolution passed at the Eighth Annual General Meeting held on 30 May 2002.

Filling vacated office.

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(c)	where the default is due to the moving of a resolution in contravention of the next following Article; or
(d)	where such Director has attained any retiring age applicable to him as Director.

The retirement shall not have effect until the conclusion of the meeting except where a resolution is passed to elect some other person in the place of the retiring Director or a resolution for his re-election is put to the meeting and lost and accordingly a retiring Director who is re-elected or deemed to have been re-elected will continue in office without a break.

97. A resolution for the appointment of two or more persons as Directors by a single resolution shall not be moved at any General Meeting unless a resolution that it shall be so moved has first been agreed to by the meeting without any vote being given against it; and any resolution moved in contravention of this provision shall be void.

Appointment of Directors.

98. The Company may in accordance with and subject to the provisions of the Statutes by Ordinary Resolution of which special notice has been given remove any Director from office (notwithstanding any provision of these presents or of any agreement between the Company and such Director, but without prejudice to any claim he may have for damages for breach of any such agreement) and appoint another person in place of a Director so removed from office and any person so appointed shall be treated for the purpose of determining the time at which he or any other Director is to retire by rotation as if he had become a Director on the day on which the Director in whose place he is appointed was last elected a Director. In default of such appointment the vacancy arising upon the removal of a Director from office may be filled as a casual vacancy.

Removal of Director.

99. The Company may by Ordinary Resolution appoint any person to be a Director either to fill a casual vacancy or as an additional Director. Without prejudice thereto the Directors shall have power at any time so to do, but any person so appointed by the Directors shall hold office only until the next Annual General Meeting. He shall then be eligible for re-election, but shall not be taken into account in determining the number of Directors who are to retire by rotation at such meeting.

Directors’ power to fill casual vacancies and appoint additional Directors.

ALTERNATE DIRECTORS

100. (A) Any Director may at any time by writing under his hand and deposited at the Office, or delivered at a meeting of the Directors, appoint any person (other than another Director) to be his alternate Director and may in like manner at any time terminate such appointment. Such appointment, unless previously approved by the Directors, shall have effect only upon and subject to being so approved.

     (B) The appointment of an alternate Director shall determine on the happening of any event which if he were a Director would cause him to vacate such office or if the Director concerned (below called “his principal”) ceases to be a Director.

     (C) An Alternate Director shall (except when absent from Singapore) be entitled to receive notices of meetings of the Directors and shall be entitled to attend and vote as a Director at any such meeting at which his principal is not personally present and generally at such meeting to perform all functions of his principal as a Director and for the purposes of the proceedings at such meeting the provisions of these presents

Appointment of Alternate Director.

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shall apply as if he (instead of his principal) were a Director. If his principal is for the time being absent from Singapore or temporarily unable to act through ill health or disability, his signature to any resolution in writing of the Directors shall be as effective as the signature of his principal. To such extent as the Directors may from time to time determine in relation to any committee of the Directors, the foregoing provisions of this paragraph shall also apply mutatis mutandis to any meeting of any such committee of which his principal is a member. An Alternate Director shall not (save as aforesaid) have power to act as a Director nor shall he be deemed to be a Director for the purposes of these presents.

     (D) An Alternate Director shall be entitled to contract and be interested in and benefit from contracts or arrangements or transactions and to be repaid expenses and to be indemnified to the same extent mutatis mutandis as if he were a Director but he shall not be entitled to receive from the Company in respect of his appointment as Alternate Director any remuneration except only such part (if any) of the remuneration otherwise payable to his principal as such principal may by notice in writing to the Company from time to time direct.

MEETINGS AND PROCEEDINGS OF DIRECTORS

101. (A) Subject to the provisions of these presents the Directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit. At any time any Director may, and the Secretary on the requisition of a Director shall, summon a meeting of the Directors. It shall not be necessary to give notice of a meeting of Directors to any Director for the time being absent from Singapore. Any Director may waive notice of any meeting and any such waiver may be retroactive.

     (B) Directors may participate in a meeting of the Directors by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, without a Director being in the physical presence of another Director or Directors, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

Meetings of Directors.

102. The quorum necessary for the transaction of the business of the Directors may be fixed from time to time by the Directors and unless so fixed at any other number shall be two. A meeting of the Directors at which a quorum is present shall be competent to exercise all powers and discretions for the time being exercisable by the Directors.

Quorum.

103. Questions arising at any meeting of the Directors shall be determined by a majority of votes. In case of an equality of votes (except where only two Directors are present and form the quorum or when only two Directors are competent to vote on the question in issue) the chairman of the meeting shall have a second or casting vote.

Casting vote of chairman.

104. A Director shall not vote in respect of any contract or arrangement or any other proposal whatsoever in which he has any interest, directly or indirectly. A Director shall not be counted in the quorum at a meeting in relation to any resolution on which he is debarred from voting.

Prohibition against voting.

105. The continuing Directors may act notwithstanding any vacancies, but if and so long as the number of Directors is reduced below the minimum number fixed by or in accordance with these presents the continuing Directors or Director may act for the

Proceeding in case of vacancy.

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purpose of filling up such vacancies or of summoning General Meetings, but not for any other purpose. If there be no Directors or Director able or willing to act, then any two members may summon a General Meeting for the purpose of appointing Directors.

106. (A) The Directors may elect from their number a Chairman and a Deputy Chairman (or two or more Deputy Chairmen) and determine the period for which each is to hold office. If no Chairman or Deputy Chairman shall have been appointed or if at any meeting of the Directors no Chairman or Deputy Chairman shall be present within five minutes after the time appointed for holding the meeting, the Directors present may choose one of their number to be chairman of the meeting.

     (B) If at any time there is more than one Deputy Chairman the right in the absence of the Chairman to preside at a meeting of the Directors or of the Company shall be determined as between the Deputy Chairmen present (if more than one) by seniority in length of appointment or otherwise as resolved by the Directors.

Chairman of Directors.

*107. A resolution in writing signed by a majority in number of the Directors shall be as effective as a resolution duly passed at a meeting of the Directors and may consist of several documents in the like form, each signed by one or more Directors. The expressions “in writing” and “signed” include approval by any such Director by telefax, telex, cable or telegram or any form of electronic communication approved by the Directors for such purpose from time to time incorporating, if the Directors deem necessary, the use of security and/or identification procedures and devices approved by the Directors.

Resolution in writing.

108. The Directors may delegate any of their powers or discretion to committees consisting of one or more members of their body and (if thought fit) one or more other persons co-opted as hereinafter provided. Any committee so formed shall in the exercise of the powers so delegated conform to any regulations which may from time to time be imposed by the Directors. Any such regulations may provide for or authorise the co-option to the committee of persons other than Directors and for such co-opted members to have voting rights as members of the committee.

Committee of Directors.

109. The meetings and proceedings of any such committee consisting of two or more members shall be governed mutatis mutandis by the provisions of these presents regulating the meetings and proceedings of the Directors, so far as the same are not superseded by any regulations made by the Directors under the last preceding Article.

Meetings of committee.

110. All acts done by any meeting of Directors, or of any such committee, or by any person acting as a Director or as a member of any such committee, shall as regards all persons dealing in good faith with the Company, notwithstanding that there was defect in the appointment of any of the persons acting as aforesaid, or that any such persons were disqualified or had vacated office, or were not entitled to vote, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director or member of the committee and had been entitled to vote.

Validity of act of Directors in spite of formal defect.

* Deleted and substituted by Special Resolution passed at the Seventh Annual General Meeting held on 31 May 2001.

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BORROWING POWERS

111. Subject as hereinafter provided and to the provisions of the Statutes, the Directors may exercise all the powers of the Company to borrow money, to mortgage or charge its undertaking, property and uncalled capital and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

Borrowing powers.

GENERAL POWERS OF DIRECTORS

*112. The business and affairs of the Company shall be managed by the Directors, who may exercise all such powers of the Company as are not by the Statutes or by these presents required to be exercised by the Company in General Meeting. The Directors shall not carry into effect any proposals for selling or disposing of the whole or substantially the whole of the Company’s undertaking unless such proposals have been approved by the Company in General Meeting. The general powers given by this Article shall not be limited or restricted by any special authority or power given to the Directors by any other Article.

General power of Directors to manage Company’s business.

113. The Directors may establish any local boards or agencies for managing any of the affairs of the Company, either in Singapore or elsewhere, and may appoint any persons to be members of such local boards, or any managers or agents, and may fix their remuneration, and may delegate to any local board, manager or agent any of the powers, authorities and discretions vested in the Directors, with power to sub-delegate, and may authorise the members of any local boards, or any of them, to fill any vacancies therein, and to act notwithstanding vacancies, and any such appointment or delegation may be made upon such terms and subject to such conditions as the Directors may think fit, and the Directors may remove any person so appointed, and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

Power to establish local boards etc.

114. The Directors may from time to time and at any time by power of attorney or otherwise appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these presents) and for such period and subject to such conditions as they may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him.

Power to appoint attorney.

115. The Company or the Directors on behalf of the Company may in exercise of the powers in that behalf conferred by the Statutes cause to be kept a Branch Register or Register of Members and the Directors may (subject to the provisions of the Statutes) make and vary such regulations as they may think fit in respect of the keeping of any such Register.

Power to keep Branch Register.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

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116. All cheques, promissory notes, drafts, bills of exchange, and other negotiable or transferable instruments, and all receipts for moneys paid to the Company, shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, in such manner as the Directors shall from time to time by resolution determine.

Execution of negotiable instruments and receipts for money paid.

SECRETARY

117. The Secretary shall be appointed by the Directors on such terms and for such period as they may think fit. Any Secretary so appointed may at any time be removed from office by the Directors, but without prejudice to any claim for damages for breach of any contract of service between him and the Company. If thought fit two or more persons may be appointed as Joint Secretaries. The Directors may also appoint from time to time on such terms as they may think fit one or more Assistant Secretaries. The appointment and duties of the Secretary or Joint Secretaries shall not conflict with the Statutes and in particular Section 171 of the Act.

Appointment and removal of Secretary.

THE SEAL

118. The Directors shall provide for the safe custody of the Seal which shall not be used without the authority of the Directors or of a committee authorised by the Directors in that behalf.

Usage of Seal.

119. Every instrument to which the Seal shall be affixed shall be signed autographically by one Director and the Secretary or by a second Director or some another person appointed by the Directors save that as regards any certificates for shares or debentures or other securities of the Company the Directors may by resolution determine that such signatures or either of them shall be dispensed with or affixed by some method or system of mechanical signature or other method approved by the Directors.

Seal.

120. (A) The Company may exercise the powers conferred by the Statutes with regard to having an official seal for use abroad and such powers shall be vested in the Directors.

Official Seal.

     (B) The Company may exercise the powers conferred by the Statutes with regard to having a duplicate Seal as referred to in Section 124 of the Act which shall be a facsimile of the Seal with the addition on its face of the words “Share Seal”.

Share Seal.

AUTHENTICATION OF DOCUMENTS

*121. Any Director or the Secretary or any person appointed by the Directors for the purpose shall have power to authenticate any documents affecting the constitution of the Company and any resolutions passed by the Company or the Directors or any committee, and any books, records, documents and accounts relating to the business of the Company, and to certify copies thereof or extracts therefrom as true copies or extracts; and where any books, records, documents or accounts are elsewhere than at the Office, the local manager or other officer of the Company having the custody thereof shall be deemed to be a person appointed by the Directors as aforesaid. A document purporting to be a copy of a resolution, or an extract from the minutes of a meeting, of the Company or of the Directors or any committee which is

* Deleted and substituted by Special Resolution passed at the Seventh Annual General Meeting held on 31 May 2001.

Power to authenticate documents and certified copies of resolutions of the Company or the Directors.

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certified as aforesaid shall be conclusive evidence in favour of all persons dealing with the Company upon the faith thereof that such resolution has been duly passed, or as the case may be, that any minute so extracted is a true and accurate record of proceedings at a duly constituted meeting. Any authentication or certification made pursuant to this Article may be made by any electronic means approved by the Directors from time to time for such purpose incorporating, if the Directors deem necessary, the use of security procedures or devices approved by the Directors.

RESERVES

*122. The Directors may from time to time set aside out of the profits of the Company and carry to reserve such sums as they think proper which, at the discretion of the Directors, shall be applicable for any purpose to which the profits of the Company may properly be applied and pending such application may either be employed in the business of the Company or be invested. The Directors may divide the reserve into such special funds as they think fit and may consolidate into one fund any special funds or any parts of any special funds into which the reserve may have been divided. The Directors may also, without placing the same to reserve, carry forward any profits. In carrying sums to reserve and in applying the same the Directors shall comply with the provisions (if any) of the Statutes.

Power to carry profits to reserve.

DIVIDENDS

123. The Company may by Ordinary Resolution declare dividends but no such dividend shall exceed the amount recommended by the Directors.

Dividends.

124. If and so far as in the opinion of the Directors the profits of the Company justify such payments, the Directors may declare and pay the fixed dividends on any class of shares carrying a fixed dividend expressed to be payable on fixed dates on the half-yearly or other dates prescribed for the payment thereof and may also from time to time declare and pay interim dividends on shares of any class of such amounts and on such dates and in respect of such periods as they think fit.

Interim dividend.

*125. Subject to any rights or restrictions attached to any shares or class of shares and except as otherwise permitted under the Act:

Apportionment of dividends.

(a)	all dividends in respect of shares must be paid in proportion to the number of shares held by a member but where shares are partly paid all dividends must be apportioned and paid proportionately to the amounts paid or credited as paid on the partly paid shares; and
(b)	all dividends must be apportioned and paid proportionately to the amounts so paid or credited as paid during any portion or portions of the period in respect of which the dividend is paid.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

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For the purposes of this Article, an amount paid or credited as paid on a share in advance of a call is to be ignored.

126. No dividend shall be paid otherwise than out of profits available for distribution under the provisions of the Statutes.

Dividend payable only out of profits.

127. No dividend or other moneys payable on or in respect of a share shall bear interest as against the Company.

Dividend not to bear interest.

128. (A) The Directors may retain any dividend or other moneys payable on or in respect of a share on which the Company has a lien and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists.

     (B) The Directors may retain the dividends payable upon shares in respect of which any person is under the provisions as to the transmission of shares hereinbefore contained entitled to become a member, or which any person is under those provisions entitled to transfer, until such person shall become a member in respect of such shares or shall transfer the same.

Retention of dividend.

129. The waiver in whole or in part of any dividend on any share by any document (whether or not under seal) shall be effective only if such document is signed by the shareholder (or the person entitled to the share in consequence of the death or bankruptcy of the holder) and delivered to the Company and if or to the extent that the same is accepted as such or acted upon by the Company.

Waiver of dividend.

*129A. The payment by the Directors of any unclaimed dividends or other moneys payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof. All dividends and other moneys payable on or in respect of a share that are unclaimed after first becoming payable may be invested or otherwise made use of by the Directors for the benefit of the Company and any dividend or any such moneys unclaimed after a period of six years from the date they are first payable may be forfeited and if so shall revert to the Company but the Directors may at any time thereafter at their absolute discretion annul any such forfeiture and pay the moneys so forfeited to the person entitled thereto prior to the forfeiture. If the Depository returns any such dividend or moneys to the Company, the relevant Depositor shall not have any right or claim in respect of such dividend or moneys against the Company if a period of six years has elapsed from the date of the declaration of such dividend or the date on which such other moneys are first payable.

Unclaimed dividends

130. The Company may upon the recommendation of the Directors by Ordinary Resolution direct payment of a dividend in whole or in part by the distribution of specific assets (and in particular of paid-up shares or debentures of any other company) and the Directors shall give effect to such resolution. Where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional certificates, may fix the value for distribution of

* Inserted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Payment of dividend in specie.

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such specific assets or any part thereof, may determine that cash payments shall be made to any members upon the footing of the value so fixed in order to adjust the rights of all parties and may vest any such specific assets in trustees as may seem expedient to the Directors.

131. Any dividend or other moneys payable in cash on or in respect of a share may be paid by cheque or warrant sent through the post to the registered address appearing in the Register of Members or (as the case may be) the Depository Register of a member or person entitled thereto (or, if two or more persons are registered in the Register of Members or (as the case may be) entered in the Depository Register as joint holders of the share or are entitled thereto in consequence of the death or bankruptcy of the holder, to any one of such persons) or to such person at such address as such member or person or persons may by writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to such person as the holder or joint holders or person or persons entitled to the share in consequence of the death or bankruptcy of the holder may direct and payment of the cheque or warrant by the banker upon whom it is drawn shall be a good discharge to the Company. Every such cheque or warrant shall be sent at the risk of the person entitled to the money represented thereby. Notwithstanding the foregoing provisions of this Article and the provisions of Article 133, the payment by the Company to the Depository of any dividend payable to a Depositor shall, to the extent of the payment made to the Depository, discharge the Company from any liability to the Depositor in respect of that payment.

Dividends payable by cheque or warrant.

132. If two or more persons are registered in the Register of Members or (as the case may be) the Depository Register as joint holders of any share, or are entitled jointly to a share in consequence of the death or bankruptcy of the holder, any one of them may give effectual receipts for any dividend or other moneys payable or property distributable on or in respect of the share.

Payment of dividend to joint holders.

133. Any resolution declaring a dividend on shares of any class, whether a resolution of the Company in General Meeting or a resolution of the Directors, may specify that the same shall be payable to the persons registered as the holders of such shares in the Register of Members or (as the case may be) the Depository Register at the close of business on a particular date and thereupon the dividend shall be payable to them in accordance with their respective holdings so registered, but without prejudice to the rights inter se in respect of such dividend of transferors and transferees of any such shares.

Resolution declaring dividends.

*BONUS ISSUES AND CAPITALISATION OF PROFITS AND RESERVES

*134. (A) The Directors may, with the sanction of an Ordinary Resolution of the Company (including any Ordinary Resolution passed pursuant to Article 8(A)):

Power of Directors to give effect to bonus issues and capitalisations.

(a) issue bonus shares for which no consideration is payable to the Company to the persons registered as holders of shares in the Register of Members or (as the case may be) in the Depository Register at the close of business on:

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

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(i)	the date of the Ordinary Resolution (or such other date as may be specified therein or determined as therein provided); or
(ii)	(in the case of an Ordinary Resolution passed pursuant to Article 8(A)) such other date as may be determined by the Directors,

in proportion to their then holdings of shares; and/or

(b) capitalise any sum standing to the credit of any of the Company’s reserve accounts or other undistributable reserve or any sum standing to the credit of profit and loss account by appropriating such sum to the persons registered as holders of shares in the Register of Members or (as the case may be) in the Depository Register at the close of business on:

(i)	the date of the Ordinary Resolution (or such other date as may be specified therein or determined as therein provided); or
(ii)	(in the case of an Ordinary Resolution passed pursuant to Article 8(A)) such other date as may be determined by the Directors,

in proportion to their then holdings of shares and applying such sum on their behalf in paying up in full unissued shares (or, subject to any special rights previously conferred on any shares or class of shares for the time being issued, unissued shares of any other class not being redeemable shares) for allotment and distribution credited as fully paid up to and amongst them as bonus shares in the proportion aforesaid.

     (B) The Directors may do all acts and things considered necessary or expedient to give effect to any such bonus issue and/or capitalisation under Article 134(A), with full power to the Directors to make such provisions as they think fit for any fractional entitlements which would arise on the basis aforesaid (including provisions whereby fractional entitlements are disregarded or the benefit thereof accrues to the Company rather than to the members concerned). The Directors may authorise any person to enter, on behalf of all the members interested, into an agreement with the Company providing for any such bonus issue or capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.

*135. In addition and without prejudice to the powers provided for by Article 134, the Directors shall have power to issue shares for which no consideration is payable and/or to capitalise any undivided profits or other moneys of the Company not required for the payment or provision of the fixed dividend on any shares entitled to fixed cumulative or non-cumulative preferential dividends (including profits or moneys

Power to capitalise profits for paying up shares to be issued under share option scheme.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

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carried and standing to any reserve or reserves) and to apply such profits or moneys in paying up in full unissued shares, in each case on terms that such shares shall, upon issue, be held by or for the benefit of participants of any share incentive or option scheme or plan implemented by the Company and approved by shareholders in General Meeting and on such terms as the Directors shall think fit.

ACCOUNTS

136. Accounting records sufficient to show and explain the Company’s transactions and otherwise complying with the Statutes shall be kept at the Office, or at such other place as the Directors think fit. No member of the Company or other person shall have any right of inspecting any account or book or document of the Company except as conferred by statute or ordered by a court of competent jurisdiction or authorised by the Directors.

Accounting records.

*137. In accordance with the Statutes, the Directors shall cause to be prepared and to be laid before the Company in General Meeting such profit and loss accounts, balance sheets, group accounts (if any) and reports as may be necessary. The interval between the close of a financial year of the Company and the date of the Company’s Annual General Meeting thereto shall not exceed four months (or such other period as may be permitted by the Companies Act).

Presentation of accounts.

138. A copy of every balance sheet and profit and loss account which is to be laid before a General Meeting of the Company (including every document required by law to be comprised therein or attached or annexed thereto) shall not less than 14 days before the date of the meeting be sent to every member of, and every holder of debentures of, the Company and to every other person who is entitled to receive notices of meetings from the Company under the provisions of the Statutes or of these presents; Provided that this Article shall not require a copy of these documents to be sent to more than one or any joint holders or to any person of whose address the Company is not aware, but any member or holder of debentures to whom a copy of these documents has not been sent shall be entitled to receive a copy free of charge on application at the Office.

Copies of accounts.

AUDITORS

139. Subject to the provisions of the Statutes, all acts done by any person acting as an Auditor shall, as regards all persons dealing in good faith with the Company, be valid, notwithstanding that there was some defect in his appointment or that he was at the time of his appointment not qualified for appointment or subsequently became disqualified.

Validity of acts of Auditor despite formal defects.

140. An Auditor shall be entitled to attend any General Meeting and to receive all notices of and other communications relating to any General Meeting which any member is entitled to receive and to be heard at any General Meeting on any part of the business of the meeting which concerns him as Auditor.

* Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Notices to Auditors.

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NOTICES

141. Any notice or document (including a share certificate) may be served on or delivered to any member by the Company either personally or by sending it through the post in a prepaid cover addressed to such member at his registered address appearing in the Register of Members or (as the case may be) the Depository Register, or (if he has no registered address within Singapore) to the address, if any, within Singapore supplied by him to the Company or (as the case may be) supplied by him to the Depository as his address for the service of notices, or by delivering it to such address as aforesaid. Where a notice or other document is served or sent by post, service or delivery shall be deemed to be effected at the time when the cover containing the same is posted and in proving such service or delivery it shall be sufficient to prove that such cover was properly addressed, stamped and posted.

Service of notice or document.

*141A. Without prejudice to the provisions of Article 141, any notice or document (including, without limitations, any accounts, balance-sheet or report) which is required or permitted to be given, sent or served under the Act or under these presents by the Company, or by the Directors, to a member or an officer or Auditor of the Company may be given, sent or served using electronic communications to the current address of that person in accordance with the provisions of, or as otherwise provided by, the Statutes and/or any other applicable regulations or procedures. Such notice or document shall be deemed to have been duly given, sent or served upon transmission of the electronic communication to the current address of such person or as otherwise provided under the Statutes and/or any other applicable regulations or procedures.

Electronic communications

142. Any notice given to that one of the joint holders of a share whose name stands first in the Register of Members or (as the case may be) the Depository Register in respect of the share shall be sufficient notice to all the joint holders in their capacity as such. For such purpose a joint holder having no registered address in Singapore and not having supplied an address within Singapore for the service of notices shall be disregarded.

Service of notice to joint holders.

**143. A person entitled to a share in consequence of the death or bankruptcy of a member upon supplying to the Company such evidence as the Directors may reasonably require to show his title to the share, and upon supplying also to the Company or (as the case may be) the Depository an address within Singapore for the service of notices, shall be entitled to have served upon or delivered to him at such address any notice or document to which the member but for his death or bankruptcy would have been entitled, and such service or delivery shall for all purposes be deemed a sufficient service or delivery of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the share. Save as aforesaid any notice or document delivered or sent by post to or left at the address of any member or given, sent or served to any member using electronic communications in pursuance of these presents shall, notwithstanding that such member be then dead or bankrupt or in liquidation, and whether or not the Company shall have notice of his death or bankruptcy or liquidation, be deemed to have been duly served or delivered in respect of any share registered in the name of such member in the Register of Members or, where such member is a Depositor, entered against his name in the Depository Register as sole or first-named joint holder.

*	Inserted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.
**	Deleted and substituted by Special Resolution passed at the Twelfth Annual General Meeting held on 25 April 2006.

Service of notices after death, bankruptcy etc.

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144. A member who (having no registered address within Singapore) has not supplied to the Company or (as the case may be) the Depository an address within Singapore for the service of notices shall not be entitled to receive notices from the Company.

No notice to member with no registered address in Singapore.

WINDING UP

145. The Directors shall have power in the name and on behalf of the Company to present a petition to the court for the Company to be wound up.

Voluntary winding up.

146. If the Company shall be wound up (whether the liquidation is voluntary, under supervision, or by the court) the Liquidator may, with the authority of a Special Resolution, divide among the members in specie or kind the whole or any part of the assets of the Company and whether or not the assets shall consist of property of one kind or shall consist of properties of different kinds, and may for such purpose set such value as he deems fair upon any one or more class or classes of property and may determine how such division shall be carried out as between the members of different classes of members. The Liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the Liquidator with the like authority shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

Distribution of assets in specie.

147. On a voluntary winding up of the Company, no commission or fee shall be paid to a Liquidator without the prior approval of the members in General Meeting. The amount of such commission or fee shall be notified to all members not less than seven days prior to the General Meeting at which it is to be considered.

Liquidators’ commission.

148. In the event of a winding up of the Company every member of the Company who is not for the time being in the Republic of Singapore shall be bound, within fourteen days after the passing of an effective resolution to wind up the Company voluntarily, or within the like period after the making of an order for the winding up of the Company, to serve notice in writing on the Company appointing some householder in the Republic of Singapore upon whom all summonses, notices, processes, orders and judgments in relation to or under the winding up of the Company may be served, and in default of such nomination the liquidator of the Company shall be at liberty on behalf of such member to appoint some such person, and service upon any such appointee shall be deemed to be a good personal service on such member for all purposes, and where the liquidator makes any such appointment he shall, with all convenient speed, give notice thereof to such member by advertisement in any leading daily newspaper in the English language in circulation in Singapore or by a registered letter sent through the post and addressed to such member at his address as appearing in the Register of Members or (as the case may be) the Depository Register, and such notice shall be deemed to be served on the day following that on which the advertisement appears or the letter is posted.

Service of notice after winding up.

INDEMNITY

149. Subject to the provisions of and so far as may be permitted by the Statutes, every Director, Auditor, Secretary or other officer of the Company shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him in the execution and discharge of his duties or in relation

Indemnity of Directors and officers.

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thereto including any liability incurred by him in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Company. Without prejudice to the generality of the foregoing, no Director, Manager, Secretary or other officer of the Company shall be liable for the acts, receipts, neglects or defaults of any other Director or officer or for joining in any receipt or other act for conformity or for any loss or expense happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the Directors for or on behalf of the Company or for the insufficiency or deficiency of any security in or upon which any of the moneys of the Company shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any moneys, securities or effects shall be deposited or left or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto unless the same shall happen through his own negligence, wilful default, breach of duty or breach of trust.

SECRECY

150. No member shall be entitled to require discovery of or any information respecting any detail of the Company’s trade or any matter which may be in the nature of a trade secret, mystery of trade or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Directors it will be inexpedient in the interest of the members of the Company to communicate to the public save as may be authorised by law.

Secrecy.

EX-4.24

Exhibit 4.24

STATS CHIPPAC LTD.

PERFORMANCE SHARE PLAN 2009

TABLE OF CONTENTS

Contents		Page
1.	Name of the Plan		1
2.	Definitions		1
3.	Objectives of the Plan		5
4.	Eligibility of Participants, Eligible Participants as at Adoption Date		5
5.	Grant of Awards		5
6.	Consequences of Termination of Employment, Change in Control or Sale		6
7.	Vesting of Performance Shares, Determination of Ordinary Shares Deliverable, Payment and Other Provisions		7
8.	Limitations on the Size of the Plan		10
9.	Adjustment Events		10
10.	Administration of the Plan		10
11.	Notices		11
12.	Modifications to the Plan		12
13.	Terms of Employment Unaffected		13
14.	Duration of the Plan		13
15.	Taxes and Deductions		13
16.	Costs and Expenses of the Plan		13
17.	Disclaimer of Liability		13
18.	Disclosures in Annual Report		13
19.	Governing Law		14
20.	Contracts (Rights of Third Parties) Act, Chapter 53B		14

RULES OF
THE STATS CHIPPAC LTD. PERFORMANCE SHARE PLAN 2009

1.	NAME OF THE PLAN
	The Plan shall be called the “STATS ChipPAC Ltd. Performance Share Plan 2009”.

2.	DEFINITIONS
2.1	In the Plan, unless the context otherwise requires, the following words and expressions shall have the following meanings:

“Act”	:	The Companies Act, Chapter 50 of Singapore.
“Adoption Date”	:	The date on which the Plan is adopted by the Company in general meeting.
“Articles”	:	The Articles of Association of the Company, as amended from time to time.
“Auditors”	:	The auditors of the Company for the time being.
“Award”	:	A contingent award of Performance Shares granted under Rule 5.
“Award Date”	:	In relation to an Award, the date on which the Award is granted pursuant to Rule 5.
“Board”	:	The board of directors of the Company for the time being.
“Cause”	:	Means:
		(a)	the Participant’s conduct constituting fraud, bad faith, misconduct, breach of fiduciary duty, gross negligence, material violation of applicable securities laws, conduct that is the subject of a criminal proceeding in connection with his employment with the Group;
		(b)	the Participant’s failure or refusal to follow any lawful directive of the Board or CEO, provided that the Participant shall have received written notice from the Company of the specific acts of failure or refusal and shall have continued to engage in such acts or failures after receiving such notice;
		(c)	the Participant engaging in any act of dishonesty, misrepresentation or other moral turpitude against the Company; or
		(d)	the Participant’s failure to perform his duties and responsibilities in connection with his employment with the Group, provided that the Participant shall have received written notice from the Company of the failure and shall have continued to engage in such failure after receiving such notice.
“CDP”	:	The Central Depository (Pte) Limited.
“CEO”	:	The chief executive officer of the Company for the time

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		being.
“Change in Control”	:	Means:
		(a)	an acquisition by any person or group of persons acting together of Shares which hold more of the voting power of the Company’s voting Shares than do the Shares owned by Temasek or any of its subsidiaries;
		(b)	a merger or reorganisation of the Company which results in a shareholder of the Company other than Temasek or any of its subsidiaries holding more than 50% of the voting power of the Company’s voting Shares;
		(c)	a sale of all or substantially all of the Company’s assets; or
		(d)	a dissolution or liquidation of the Company.
“Committee”	:	The Executive Resource and Compensation Committee of the Company for the time being.
“Communication”	:	An Award and/or any correspondence made or to be made under the Plan (individually or collectively).
“Company”	:	STATS ChipPAC Ltd., a company incorporated in Singapore.
“EBITDA”	:	The Company’s financial statement net income, subject to add backs for the following items:
		(a)	tax expenses;
		(b)	interest expenses;
		(c)	depreciation and amortisation; and
		(d)	one-time and non-cash items (including but not limited to stock based compensation, equity grant expenses, restructuring and impairment).
“EBITDA Targets”	:	The EBITDA targets set by the Committee.
“EBITDA Valuation Formula”	:	Has the meaning ascribed to it in Rule 7.6.2.
“EP”	:	The Company’s economic profits determined as EBITDA less the following items:
		(a)	depreciation and amortisation;
		(b)	tax expenses; and
		(c)	cost of capital.
		For these purposes, “cost of capital” means 11.295% of the aggregate of:
		(i)	net working capital (meaning, current assets (excluding cash and cash equivalents) less non-interest bearing liabilities);
		(ii)	net fixed assets (meaning, gross fixed assets less

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			accumulated depreciation);
		(iii)	goodwill; and
		(iv)	other non-current assets.
“EP Targets”	:	The EP targets set by the Committee.
“Free Cash Flow” or “FCF”	:	The Company’s EBITDA less the following items:
		(a)	tax expense;
		(b)	increase in working capital;
		(c)	capital expenditure and intangibles; and
		(d)	investment in the acquisition of the Bangkok facility from LSI (Thai) Ltd, a corporation incorporated in Thailand.
“FCF Targets”	:	The Free Cash Flow targets set by the Committee.
“Group”	:	The Company and its subsidiaries.
“Group Employee”	:	Any senior employee of the Group, including the CEO and any Group Executive Director.
“Group Executive Director”	:	A director of the Company and/or any of its subsidiaries, as the case may be, who performs an executive function.
“Listing Manual”	:	The listing manual of the Singapore Exchange.
“Market Day”	:	A day on which the Singapore Exchange is open for trading in securities.
“Ordinary Shares”	:	The number of outstanding Shares as of the Adoption Date on a fully-diluted basis, including Shares issuable upon conversion of all outstanding convertible bonds as of the Adoption Date, any Shares issued with regard to any future acquisition and any equity grants awarded prior to the Adoption Date, but for the avoidance of doubt does not include any adjustments due to dilution that may result from future share issuances (other than in the context of any future acquisitions involving the issuance of Shares and issuance of Shares with regard to equity grants awarded prior to the Adoption Date), or future grants of share options, restricted share units and performance shares. For the avoidance of doubt, the number of Ordinary Shares may not be varied by the Committee unless otherwise provided by these Rules.
“Participant”	:	The holder of an Award (including, where applicable, the executor or personal representative of such holder).
“Performance Multiplier”	:	Has the meaning ascribed to it in Rules 7.2.3(a), Rule 7.2.3(b) or Rule 7.2.4, as applicable.
“Performance Shares”	:	Represent unfunded and unsecured rights to receive Ordinary Shares.
“Performance Target Formula”	:	Has the meaning ascribed to it in Rule 7.2.3.

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“Plan”	:	The STATS ChipPAC Ltd. Performance Share Plan 2009, as modified or altered from time to time.
“Prescribed Higher Amount”	:	Such dollar amount as set by the Committee.
“Prescribed Lower Amount”	:	Such dollar amount as set by the Committee.
“Qualified Public Offering”	:	Any public offering of the Shares on any stock exchange of recognized international reputation and standing duly approved by the Board.
“Qualified Termination”	:	In relation to a Participant, the termination of his employment with the Group due to that Participant’s death or disability, or the termination of his employment by the Group without Cause.
“Record Date”	:	The date fixed by the Company for the purposes of determining entitlements to dividends or other distributions to, or rights of, holders of Shares.
“Security Device”	:	Any smartcard, digital certificate, digital signature, encryption device, electronic key, logon identifier, password, personal identification number, and/or other code or any access procedure incorporating any one or more of the foregoing, designated by the Company for use in conjunction with the Plan.
“Shares”	:	Ordinary shares in the capital of the Company.
“Singapore Exchange”	:	The Singapore Exchange Securities Trading Limited.
“Syndication”	:	Means:
		(a)	any transfer and/or assignment of only economic interests underlying part or all of the Shares held by Temasek or any of its subsidiaries, pursuant to an agreement between Temasek or any of its subsidiaries and a third party(ies), whereby Temasek or any of its subsidiaries retains full voting power of such Shares; or
		(b)	any transfer and/or assignment of interests in part or all of the Shares held by Temasek or any of its subsidiaries to a third party(ies) pursuant to an agreement, whereby such third party(ies) agree to exercise its voting power in concert with Temasek or any of its subsidiaries.
“Temasek”	:	Temasek Holdings (Private) Limited, a company incorporated in Singapore.
“year”	:	Calendar year, unless otherwise stated.
“%”	:	Per centum or percentage.

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2.2	Words importing the singular number shall, where applicable, include the plural number and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter gender.
2.3	Any reference to a time of a day in the Plan is a reference to Singapore time.
2.4	Any reference in the Plan to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Act or any statutory modification thereof and not otherwise defined in the Plan and used in the Plan shall have the meaning assigned to it under the Act or any statutory modification thereof, as the case may be.

3.

OBJECTIVES OF THE PLAN

The Plan is a share incentive scheme. The Plan is proposed on the basis that it is important to retain staff whose contributions are essential to the well-being and prosperity of the Group and to give recognition to senior employees and executive directors of the Group who have contributed to the growth of the Group. The Plan will give Participants an opportunity to have a personal equity interest in the Company and will help to achieve the following positive objectives:

(a)	to align the interests of the Participants with the interests of the shareholders of the Company;
(b)	to retain key employees and executive directors of the Group whose contributions are essential to the long-term growth and profitability of the Group;
(c)	to instil loyalty to, and a stronger identification by Participants with the long-term prosperity of, the Group;
(d)	to attract potential employees with relevant skills to contribute to the Group and to create value for the shareholders of the Company; and
(e)	to motivate each Participant to optimise his performance standards and efficiency and to maintain a high level of contribution to the Group.

4.	ELIGIBILITY OF PARTICIPANTS, ELIGIBLE PARTICIPANTS AS AT ADOPTION DATE
4.1	Group Employees who have attained the age of 21 years and hold such rank as may be designated by the Committee from time to time shall, unless they are also controlling shareholders (as defined in the Listing Manual) of the Company or associates (as defined in the Listing Manual) of such controlling shareholders, be eligible to participate in the Plan at the absolute discretion of the Committee.
4.2	Up to 18 Group Employees may be awarded Performance Shares with respect to up to 3.35% of the outstanding Ordinary Shares, with the number of the Ordinary Shares available for delivery to be based on, subject as otherwise provided in these Rules and (in the case of the Group Employees other than the CEO) the Performance Target Formula, and further subject to:

(a)	the Company achieving the EP Targets; and
(b)	the Performance Multiplier,

at each time of vesting of the Performance Shares, whether on a pro-rata basis or completely. In the event that the Performance Multiplier is applied up to the maximum permissible under the Plan, an aggregate of up to 5.02% of the Ordinary Shares could be payable and available for delivery in respect of the Performance Shares.

5.	GRANT OF AWARDS
5.1	The Committee may grant Awards to such eligible Group Employees as the Committee may, on the recommendation of the management of the Company, select in its absolute discretion, at any time during the period when the Plan is in force.
5.2	The number of Performance Shares to be granted to a Participant in accordance with the Plan shall be recommended by the management of the Company and determined at the absolute discretion of the Committee, which shall take into account such criteria as it considers fit.
5.3	The Committee shall, on the recommendation of the management of the Company, decide in

5

relation to an Award:

(a)	the Participant;
(b)	the Award Date;
(c)	the number of Performance Shares which are the subject of the Award; and
(d)	any other condition which the Committee may determine in relation to that Award.

5.4

No consideration shall be payable for Awards or for Ordinary Shares receivable upon vesting of the Performance Shares.

5.5

An Award shall be personal to the Participant to whom it is granted and, prior to the allotment to the Participant of the Shares to which the Award relates, shall not be transferred (other than to a Participant’s personal representative on the death of that Participant), charged, assigned, pledged or otherwise disposed of, in whole or in part, except with the prior approval of the Committee and if a Participant shall do, suffer or permit any such act or thing as a result of which he would or might be deprived of any rights under an Award without the prior approval of the Committee, that Award shall immediately lapse.

6.	CONSEQUENCES OF TERMINATION OF EMPLOYMENT, CHANGE IN CONTROL OR SALE
6.1	Consequences of Termination of Employment
6.1.1	An Award shall, to the extent not yet vested, immediately lapse without any claim whatsoever against the Company, and a Participant shall immediately forfeit all unvested Performance Shares comprised in any Award, in the event of termination of that Participant’s employment with the Group for Cause.
6.1.2	In the event of termination of a Participant’s employment with the Group in a Qualified Termination before the Performance Shares comprised in his Award have vested, then:

(a)

the Participant shall earn a pro-rata portion of the Performance Shares based on the length of the Participant’s employment with the Group during the period beginning on 1 January 2007 and ending on 31 December 2011, with the number of Ordinary Shares deliverable to be determined as and when the same is determined for the other Participants. Such pro-rata portion shall be determined in accordance with the same criteria and subject to the same performance metrics that such Participant’s Performance Shares would have been subject had the Participant continued his employment with the Company through 31 December 2011. Such terminated Participant shall receive payment with regard to his vested pro-rata portion of the Performance Shares on the same date the remaining Participants receive their vested Performance Share payments; and

(b)

in the event the vesting of the pro-rata portion of the Performance Shares occurs on 31 December 2011, the Committee shall have discretion as to whether or not 100% of the Ordinary Shares deliverable in payment of the pro-rata portion of the Performance Shares shall become immediately payable, or whether 50% of the pro-rata portion of the Performance Shares will be forfeited. Should the Ordinary Shares be unavailable for payment as marketable securities, such Participants shall receive, in the form of cash from the Company, the value of such Ordinary Shares that would be otherwise payable, as determined in accordance with the EBITDA Valuation Formula.

6.1.3 In the event of termination of a Participant’s employment with Group before the Performance Shares have vested:

(a)	otherwise than for Cause; or
(b)	otherwise than in a Qualified Termination,

	the Committee shall have the discretion to determine whether or not such Participant shall be entitled to vesting and payment with respect to any portion of the unvested Performance Shares.
6.1.4	The Committee shall have the discretion to decide on the treatment of any unvested Performance Shares which have been forfeited pursuant to Rule 6.1. Without prejudice to the provisions of Rules 5.1, 5.2 and 5.3, such Performance Shares may be reallocated to any current, new or replacement Participants, taking into consideration the recommendations of the management of the Company.

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6.2	Consequences of Change in Control or Sale
6.2.1	In the event of a Change in Control, vesting of all Performance Shares and determination of the number of Ordinary Shares deliverable shall accelerate immediately prior to such Change in Control event, and the Participants shall have the right to participate in any sale transaction with Temasek or any of its subsidiaries (as the case may be) on a tag-along basis in any transaction resulting in a Change in Control with respect to all Ordinary Shares deliverable.
6.2.2	In the event of a sale of Shares by Temasek or any of its subsidiaries which does not result in a Change in Control (including in any Qualified Public Offering but excluding in any Syndication), a pro-rata vesting of the Performance Shares comprised in outstanding Awards shall occur, and the Participants shall have the right to participate in any sale transaction with Temasek or any of its subsidiaries (as the case may be) on a tag-along basis with respect to all Ordinary Shares deliverable.
6.2.3	The consideration for the sale of any Shares pursuant to any transaction contemplated by Rule 6.2 shall be in the form of marketable securities. However, if marketable securities are not available, the Participants shall receive, in the form of cash from the Company, the value of such Ordinary Shares that would be otherwise payable, as determined in accordance with the EBITDA Valuation Formula.

7.	VESTING OF PERFORMANCE SHARES, DETERMINATION OF ORDINARY SHARES DELIVERABLE, PAYMENT AND OTHER PROVISIONS
7.1	Vesting of Performance Shares
	Unless as otherwise provided in Rule 6, vesting of the Performance Shares comprised in outstanding Awards shall occur on 31 December 2011 and determination of the number of Ordinary Shares deliverable with respect to such Performance Shares shall occur thereafter in accordance with this Rule 7, subject to the Participant then being employed by the Group.
7.2	Determination of Number of Ordinary Shares Deliverable
7.2.1	The delivery of Ordinary Shares shall be subject to the Company achieving the EP Targets. If vesting of the Performance Shares occurs:

(a)	on 31 December 2011, only the EP Target for 2011 is applicable; and
(b)	before 31 December 2011, the EP Target for the most recently completed financial year or for the most recently completed four financial quarters, as determined by the Committee, is applicable.

7.2.2

The number of Ordinary Shares to be delivered shall be determined by the Committee and shall, subject as otherwise provided in Rule 7.2.4, be subject to the Performance Multiplier at each time of vesting of the Performance Shares, whether on a pro-rata basis or completely, the minimum of which would be 50% of the number of Performance Shares which are the subject of the Award for EP of at least the Prescribed Lower Amount below the relevant EP Target and the maximum of which would be 150% of the number of Performance Shares which are the subject of the Award for EP of the Prescribed Higher Amount or more above the relevant EP Target, rounded down to the nearest whole Ordinary Share. In the event that the Performance Multiplier is applied up to the maximum permissible under the Plan, an aggregate of up to 5.02% of the Ordinary Shares could be payable and available for delivery in respect of the Performance Shares.

7.2.3

In relation to all Participants other than the CEO, the EP Targets have been correlated to the EBITDA Targets and the Free Cash Flow Targets so that, subject to the Company achieving a minimum of the Prescribed Lower Amount below the applicable EP Target, the number of Ordinary Shares deliverable shall be calculated according to a weighted Performance Target Formula, with 70% of such Ordinary Shares to be determined using the EBITDA Target and the remaining 30% of such Ordinary Shares to be determined using the Free Cash Flow Target, both as set forth below:

(a) EBITDA. 70% of the total number of Ordinary Shares earned and payable in respect of the Performance Shares comprised in an Award shall be based on an EBITDA Target for the financial year ending on 31 December 2011 as set by the Committee, applying the following Performance Multiplier:

(i) 100% at EBITDA Target;

7

(ii)	50% at an EBITDA Target derived from the level of the Prescribed Lower Amount below the corresponding EP Target;
(iii)	150% at an EBITDA Target derived from the level of the Prescribed Higher Amount above the corresponding EP Target,

	and proportionately between 50% and 150% of the EBITDA Target, in each case rounded down to the nearest whole Ordinary Share.
	In the event that the Performance Shares vest before 31 December 2011, 70% of the number of Ordinary Shares deliverable shall be based on the EBITDA Target for the most recently completed financial year as set by the Committee, or for the most recently completed four financial quarters, as determined by the Committee.
(b)	Free Cash Flow. 30% of the total number of Ordinary Shares earned and payable in respect of the Performance Shares comprised in an Award shall be based on a Free Cash Flow Target for the financial year ending on 31 December 2011 as set by the Committee, applying the following Performance Multiplier:

(i)	100% at FCF Target;
(ii)	50% at an FCF Target derived from the level of the Prescribed Lower Amount below the corresponding EP Target;
(iii)	150% at an FCF Target derived from the level of the Prescribed Higher Amount above the corresponding EP Target,

and proportionately between 50% and 150% of the FCF Target, in each case rounded down to the nearest whole Ordinary Share.

In the event that the Performance Shares vest before 31 December 2011, 30% of the number of Ordinary Shares deliverable shall be based on the FCF Target for the most recently completed financial year as set by the Committee, or for the most recently completed four financial quarters, as determined by the Committee.

7.2.4 In relation to the CEO, subject to the Company achieving a minimum of the Prescribed Lower Amount below the applicable EP Target, the number of Ordinary Shares deliverable shall be calculated based on an EP Target for the financial year ending 31 December 2011 as set by the Committee, applying the following Performance Multiplier:

(a)	100% at EP Target;
(b)	50% at the Prescribed Lower Amount below the EP Target;
(c)	150% at the Prescribed Higher Amount above the EP Target,

	and proportionately between 50% and 150% of EP Target, in each case rounded down to the nearest whole Ordinary Share.
	In the event that the Performance Shares vest before 31 December 2011, the number of Ordinary Shares deliverable shall be based on the EP Target for the most recently completed financial year as set by the Committee, or for the most recently completed four financial quarters, as determined by the Committee.
7.2.5	Notwithstanding any other provision of these Rules:

(a)	in relation to all Participants other than the CEO, where the relevant EBITDA Target and FCF Target are met but a minimum of the Prescribed Lower Amount below the applicable EP Target is not met; and
(b)	in relation to the CEO, where a minimum of the Prescribed Lower Amount below the applicable EP Target is not met,

the Committee shall have the power, in its good faith and reasonable discretion, to determine the number of Ordinary Shares deliverable in respect of the Performance Shares comprised in an Award.

7.3	Payment
7.3.1	Subject to these Rules, to the Participant’s then being employed by the Group and on the basis that there is no event triggering full vesting of the Performance Shares and payout (or pro-rata vesting of the Performance Shares and payout in excess of 50%), upon vesting of the Performance Shares on 31 December 2011, 50% of the unissued Ordinary Shares deliverable in payment of the

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	Performance Shares comprised in an Award as determined pursuant to Rule 7.2 shall become immediately payable by way of an allotment to the Participant of the relevant number of Ordinary Shares. Should the Ordinary Shares be unavailable for payment as marketable securities, such Participants shall receive, in the form of cash from the Company, the value of such Ordinary Shares that would be otherwise payable, determined in accordance with the EBITDA Valuation Formula. The remaining 50% of the vested Performance Shares comprised in that Award shall remain as Ordinary Shares which have not been issued and shall be carried forward into a new share incentive plan to be adopted by the Company.
7.3.2	Payment shall be made as provided in these Rules no later than 15 March 2012, provided that the audited financial statements of the Company are then available. Otherwise, payment shall be made on such date as the Committee may determine to be appropriate.
7.4	Listing and Quotation of Shares
7.4.1	Where new Shares are allotted pursuant to these Rules at a time when the Shares are listed or quoted on the Singapore Exchange (and/or such other stock exchange upon which the Shares may be listed and quoted), the Company shall, as soon as practicable after such allotment, apply to the Singapore Exchange (and/or such other stock exchange upon which the Shares may be listed and quoted) for permission to deal in and for quotation of such Shares.
7.4.2	In the event that the Shares are then listed or quoted on the Singapore Exchange, Shares which are allotted to a Participant pursuant to these Rules shall, unless otherwise determined by the Committee, be issued in the name of, or transferred to, CDP to the credit of the securities account of that Participant maintained with CDP or the securities sub-account of that Participant maintained with a depository agent, in each case, as designated by that Participant.
7.5	Ranking of Shares
	New Shares allotted and issued pursuant to these Rules shall:

(a)	be subject to all the provisions of the Articles and the Memorandum of Association of the Company; and
(b)	rank in full for all entitlements, including dividends or other distributions declared or recommended in respect of the then existing Shares, the Record Date for which is on or after the relevant vesting date of the Performance Shares, and shall in all other respects rank pari passu with other existing Shares then in issue.

7.6	Restrictions on Shares
7.6.1	Prior to a Qualified Public Offering, Shares allotted and issued pursuant to these Rules shall be subject to the following restrictions and rights:

(a)	a right of first refusal by Temasek or any of its subsidiaries, as the case may be, who is then a shareholder of the Company, on any sale by a Participant of his Shares; and
(b)	a call right by Temasek or any of its subsidiaries, as the case may be, who is then a shareholder of the Company, and a put right by the Participant (or, at the discretion of the Committee, the beneficiaries of such Participant in the event of the Participant’s death) upon termination of the Participant’s employment with the Group.

7.6.2 The price for the transfer of Shares pursuant to this Rule 7.6 shall be based on the following EBITDA Valuation Formula:

(a)	EBITDA of the Company multiplied by the ratio of enterprise value/EBITDA trailing twelve (12) months for the Company’s listed peers equals enterprise value* of the Company (“EV”).
	* Enterprise value of Company’s listed peers is calculated based on the average share price during the last two fiscal quarters prior to the valuation date.
(b)	EV minus net debt of the Company and minority interest of the Company equals equity value at exit.
(c)	Price of shares equals equity value at exit divided by the Ordinary Shares at exit.

7.6.3 The restrictions and rights set out in this Rule 7.6 do not apply as long as the Shares are listed and traded on the Singapore Exchange and/or any other internationally recognized stock exchange, and shall lapse on any Qualified Public Offering of the Shares.

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8	LIMITATIONS ON THE SIZE OF THE PLAN
8.1	The total number of Shares which may be issued pursuant to Awards granted under the Plan on any date:

(a)	when added to the total number of new Shares issued and issuable pursuant to Awards granted under the Plan, shall not exceed 5.02% of the total number of the outstanding Ordinary Shares; and
(b)	when added to the total number of new Shares issued and issuable pursuant to (i) Awards granted under the Plan, and (ii) any other equity grant plans adopted by the Company on or after the Adoption Date, shall not exceed 15% of the total number of issued Shares from time to time (excluding treasury shares).

8.2	The Ordinary Shares available for delivery under the Plan shall be authorized by the Company’s shareholders and all Ordinary Shares deliverable under the Plan will be authorized and approved by the Board.
8.3	Without prejudice to the provisions of Rule 6.1.4, Shares which are the subject of Awards which have lapsed for any reason whatsoever may be the subject of further Awards granted by the Committee under the Plan.

9.

ADJUSTMENT EVENTS

9.1

In the event of any dividend, share split, combination, or acquisition involving a share issuance or any exchange of shares, amalgamation, arrangement or consolidation, spin-off, recapitalisation or other distribution (other than ordinary cash dividends) of the assets of the Company to its shareholders, or any other change affecting the Ordinary Shares or the Share price, the Committee shall make such proportionate adjustments, if any, as necessary to reflect such change with respect to:

(a)	the aggregate number and type of shares (subject to compliance with applicable laws) that may be delivered under the Plan; and
(b)	the terms and conditions of any outstanding grants (including, without limitation, any applicable performance targets or criteria with respect thereto).

9.2	Notwithstanding the provisions of Rule 9.1, any adjustment (except in relation to a capitalisation issue) must be confirmed in writing by the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.
9.3	Upon any adjustment made pursuant to this Rule 9, the Company shall notify the Participants in writing and deliver statements setting forth the class and/or number of shares which are the subject of the adjusted Awards to such Participants. Any adjustment shall take effect upon such written notification being given or on such date as may be specified in such written notification.

10.	ADMINISTRATION OF THE PLAN
10.1	The Plan shall be administered by the Committee (or any other committee and/or persons duly authorized and appointed by the Board to administer the Plan) in its absolute discretion with such powers and duties as are conferred on it by the Board, provided that no member of the Committee shall participate in any deliberation or decision in respect of Awards granted or to be granted to him.
10.2	Except to the extent certain terms and conditions are required by the Plan, the Committee shall have the power to make and vary such arrangements, guidelines and/or regulations (not being inconsistent with the Plan) for the implementation and administration of the Plan, to give effect to the provisions of the Plan and/or to enhance the benefit of the Awards to the Participants, as it may, in its absolute discretion, think fit. Without prejudice to the generality of the foregoing, the Committee has the broad discretion to select the Participants at any time the Plan is in effect, determine the terms and conditions of each Award and reallocate any forfeited Performance Shares to any current, new or replacement Participants, taking into consideration the recommendations of the management of the Company. Any matter pertaining or pursuant to the Plan and any dispute, difference or uncertainty as to the interpretation of the Plan or any rule, regulation or procedure thereunder or any rights under the Plan shall be determined by the Committee and binding in all respects.

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10.3 Neither the Plan nor Awards granted under the Plan shall impose on the Company or the Committee or any of its members any liability whatsoever in connection with:

(a)	the lapsing of any Awards pursuant to any provision of the Plan;
(b)	the failure or refusal by the Committee to exercise, or the exercise by the Committee of, any discretion under the Plan; and/or
(c)	any decision or determination of the Committee made pursuant to any provision of the Plan.

10.4 Any decision or determination of the Committee made pursuant to any provision of the Plan (other than a matter to be certified by the Auditors) shall be final, binding and conclusive (including for the avoidance of doubt, any decisions pertaining to disputes as to the interpretation of the Plan or any rule, regulation or procedure hereunder or the application of any formula hereunder or as to any rights under the Plan). The Committee shall not be required to furnish any reasons for any decision or determination made by it.

11.	NOTICES
11.1	Any notice required to be given by any Participant to the Company shall be sent or made to the registered office of the Company or such other address (including an electronic mail address) or facsimile number, and marked for the attention of the Committee (c/o the General Counsel of the Company), as may be notified by the Company to the Participant in writing.
11.2	Any notices or documents required to be given to a Participant or any correspondence to be made between the Company and a Participant shall be given or made by the Committee (or such person(s) as it may from time to time direct) on behalf of the Company and shall be delivered to a Participant by hand or sent to a Participant at his home address, electronic mail address or facsimile number according to the records of the Company or the last known address, electronic mail address or facsimile number provided by the Participant to the Company.
11.3	Any notice or other communication from a Participant to the Company shall be irrevocable, and shall not be effective until received by the Company. Any notice or communication from the Company to a Participant shall be deemed to be received by the Participant, when left at the address specified in Rule 11.2 or, if sent by post, on the day following the date of posting or, if sent by electronic mail or facsimile transmission, on the day of despatch.
11.4	Any Communication under the Plan may be communicated electronically through the use of a Security Device, or through an electronic page, site, or environment designated by the Company which is accessible only through the use of a Security Device, and such Communication shall thereby be deemed to have been sent by the designated holder of such Security Device.
11.5	The Company may accept and act upon any Communication issued and/or transmitted through the use of the Participant’s Security Device pursuant to Rule 11.4 (whether actually authorized by the Participant or not) as his authentic and duly authorized Communication and the Company shall be under no obligation to investigate the authenticity or authority of persons effecting the Communication or to verify the accuracy and completeness of the Communication and the Company may treat the Communication as valid and binding on the Participant, notwithstanding any error, fraud, forgery, lack of clarity or misunderstanding in the terms of such Communication.
11.6	All Communications issued and/or transmitted through the use of a Participant’s Security Device pursuant to Rule 11.4 (whether authorized by the Participant or not) are irrevocable and binding on the Participant upon transmission to the Company and the Company shall be entitled to effect, perform or process such Communications without the Participant’s further consent and without any further reference or notice to the Participant.
11.7	It shall be the Participant’s sole responsibility to ensure that all information contained in a Communication to the Company is complete, accurate, current, true and correct.
11.8	Participants shall ensure (and shall take all necessary precautions to ensure) that:

(a)	they comply with the Company’s procedural and/or operational guidelines relating to Security Devices;
(b)	all their Security Devices are kept completely confidential and secure; and
(c)	there is no unauthorized use or abuse of their Security Devices.

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11.9 Participants shall notify and/or contact the Company immediately if they become aware, have reason to believe, or suspect that any Security Device has become compromised, including but not limited to where:

(a)	the security or integrity of any Security Device may have been compromised;
(b)	such Security Device has become known or been revealed to any other person;
(c)	there has been unauthorized use of the Security Device; and/or
(d)	such Security Device is lost, damaged, defective or stolen,

	and Participants shall immediately cease to use such compromised Security Device until further notice from the Company. Participants shall be bound by all Communications and transactions resulting from any Communications made which are referable to any compromised Security Device until such time as the Company has received a notification from such Participants under this Rule 11.9.
11.10	The Company’s records of the Communications, and its record of any transactions maintained by any relevant person authorized by the Company relating to or connected with the Plan, whether stored in electronic or printed form, shall be binding and conclusive on a Participant and shall be conclusive evidence of such Communications and/or transactions. All such records shall be admissible in evidence and the Participant shall not challenge or dispute the admissibility, reliability, accuracy or the authenticity of the contents of such records merely on the basis that such records were incorporated and/or set out in electronic form or were produced by or are the output of a computer system, and the Participant waives any of his rights (if any) to so object.
11.11	Any provision in these Rules requiring a Communication to be signed by a Participant may be satisfied in the case of an electronic Communication, by the execution of any on-line act, procedure or routine designated by the Company to signify the Participant’s intention to be bound by such Communication.

12.	MODIFICATIONS TO THE PLAN
12.1	Any or all of the Rules of the Plan may be modified and/or altered at any time and from time to time by a resolution of the Committee, except that:

(a)	no modification or alteration shall adversely affect the rights attached to any Award granted prior to such modification or alteration except with the consent in writing of not less than three-quarters in number of those Participants whose rights would be so adversely affected;
(b)	the definitions of “Committee”, “Group” “Group Employee”, “Group Executive Director”, “Ordinary Shares” and “Participant” and the provisions of Rules 4, 5, 6, 7, 8, 9, 10 and this Rule 12 shall not be altered to the advantage of Participants except with the prior approval of the Company’s shareholders in general meeting; and
(c)	no modification or alteration shall be made without the prior approval of the Singapore Exchange and such other regulatory authorities as may be necessary.

	For the purposes of Rule 12.1(a), the opinion of the Committee as to whether any modification or alteration would adversely alter the rights attached to any Award shall be final, binding and conclusive. For the avoidance of doubt, nothing in this Rule 12.1 shall affect the right of the Committee under any other provision of the Plan to amend or adjust any Award.
12.2	Notwithstanding anything to the contrary contained in Rule 12.1, the Committee may at any time by a resolution (and without other formality, save for the prior approval of the Singapore Exchange, if necessary) amend or alter the Plan in any way to the extent necessary or desirable, in the opinion of the Committee, to cause the Plan to comply with, or take into account, any statutory provision (or any amendment or modification thereto, including amendment of or modification to the Act) or the provision or the regulations of any regulatory or other relevant authority or body (including the Singapore Exchange, if applicable).
12.3	Written notice of any modification or alteration made in accordance with this Rule 12 shall be given to all Participants.

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13.	TERMS OF EMPLOYMENT UNAFFECTED
	The terms of employment of a Participant shall not be affected by his participation in the Plan, which shall neither form part of such terms nor entitle him to take into account such participation in calculating any compensation or damages on the termination of his employment for any reason.

14.	DURATION OF THE PLAN
14.1	The Plan shall continue to be in force at the discretion of the Committee, subject to a maximum period of ten years commencing on the Adoption Date, provided always that the Plan may continue beyond the above stipulated period with the approval of the Company’s shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required.
14.2	The Plan may be terminated at any time by the Committee or, at the discretion of the Committee, by resolution of the Company in general meeting, subject to all relevant approvals which may be required and if the Plan is so terminated, no further Awards shall be granted by the Committee hereunder.
14.3	The expiry or termination of the Plan shall not affect Awards which have been granted prior to such expiry or termination, whether such Awards have vested (whether fully or partially) or not.

15.

TAXES AND DEDUCTIONS

All taxes (including income tax) arising from the granting, vesting or delivery of any Award granted to any Participant under the Plan shall be borne by that Participant. There shall be deducted or withheld from any payment to be made under the Plan any amounts which the Company or any of its subsidiaries is entitled, authorized or bound to deduct or withhold pursuant to applicable laws to account of income tax or other levies payable on the payment or any other applicable law or regulation. Without prejudice to the generality of the foregoing, if the payment should be subject to contributions in connection with any mandatory public savings plan administered by any governmental authority or statutory board, the Company shall be entitled to reduce the payment by an amount equal to such contribution amounts required to be made.

16.	COSTS AND EXPENSES OF THE PLAN
16.1	Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue and allotment of any Shares pursuant to the vesting of any Award in CDP’s name, the deposit of share certificate(s) with CDP, the Participant’s securities account with CDP, or the Participant’s securities sub-account with a CDP depository agent.
16.2	Save for the taxes referred to in Rule 15 and such other costs and expenses expressly provided in the Plan to be payable by the Participants, all fees, costs and expenses incurred by the Company in relation to the Plan including but not limited to the fees, costs and expenses relating to the allotment and issue of Shares pursuant to the vesting of any Award shall be borne by the Company.

17.

DISCLAIMER OF LIABILITY

Notwithstanding any provisions herein contained, the Committee and the Company and the directors and employees of the Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in any event, including but not limited to the delay by the Company in issuing the Shares or applying for or procuring the listing of new Shares on the Singapore Exchange (and/or such other stock exchange upon which the Shares may be listed or quoted) in accordance with Rule 7.4.1.

18.	DISCLOSURES IN ANNUAL REPORT
	The Company will make such disclosures in its annual report for as long as the Plan continues in operation as required by the Listing Manual including the following (where applicable):

(a)	the names of the members of the Committee administering the Plan;
(b)	in respect of the following Participants of the Plan:

(i) Directors of the Company; and

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(ii) Participants (other than those in paragraph (i) above) who have received Shares pursuant to the vesting of Awards granted under the Plan which, in aggregate, represent 5% or more of the aggregate of the total number of new Shares available under the Plan,

the following information:

(aa)	the name of the Participant; and
(bb)	the number of new Shares issued to such Participant during the financial year under review; and

(c) in relation to the Plan, the following particulars:

(i)	the aggregate number of Performance Shares comprised in Awards granted under the Plan since the commencement of the Plan to the end of the financial year under review;
(ii)	the aggregate number of Performance Shares comprised in Awards which have vested under the Plan since the commencement of the Plan to the end of the financial year under review; and
(iii)	the aggregate number of Performance Shares comprised in Awards granted under the Plan which have not vested as at the end of the financial year under review,

or as otherwise required under the Listing Manual from time to time.

19.	GOVERNING LAW
	The Plan shall be governed by, and construed in accordance with, the laws of the Republic of Singapore. The Participants, by accepting grants of Awards in accordance with the Plan, and the Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore.

20.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT, CHAPTER 53B
	No person other than the Company or a Participant shall have any right to enforce any provision of the Plan or any Award by virtue of the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore.

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EX-4.25

Exhibit 4.25

STATS CHIPPAC LTD.

EQUITY GRANT PLAN FOR NON-EXECUTIVE DIRECTORS

TABLE OF CONTENTS

Contents		Page
1.	Name of the Plan		1
2.	Definitions		1
3.	Objectives of the Plan		3
4.	Eligibility of Participants		3
5.	Offer to Participate		4
6.	Consequences of Cessation as Non-Executive Director due to Death or Disability, Change in Control or Sale		4
7.	Determination of Ordinary Shares Issuable, Payment and Other Provisions		5
8.	Limitations on the Size of the Plan		6
9.	Adjustment Events		6
10.	Administration of the Plan		7
11.	Notices		7
12.	Modifications to the Plan		8
13.	Duration of the Plan		8
14.	Taxes and Deductions		8
15.	Costs and Expenses of the Plan		9
16.	Disclaimer of Liability		9
17.	Disclosures in Annual Report		9
18.	Governing Law		9
19.	Contracts (Rights of Third Parties) Act, Chapter 53B		9

RULES OF
THE STATS CHIPPAC LTD. EQUITY GRANT PLAN FOR NON-EXECUTIVE DIRECTORS

1.	NAME OF THE PLAN
	The Plan shall be called the “STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors”.

2.	DEFINITIONS
2.1	In the Plan, unless the context otherwise requires, the following words and expressions shall have the following meanings:

“Act”	:	The Companies Act, Chapter 50 of Singapore.
“Adoption Date”	:	The date on which the Plan is adopted by the Company in general meeting.
“Articles”	:	The Articles of Association of the Company, as amended from time to time.
“Auditors”	:	The auditors of the Company for the time being.
“Board”	:	The board of directors of the Company for the time being.
“CDP”	:	The Central Depository (Pte) Limited.
“Change in Control”	:	Means:
		(a)	an acquisition by any person or group of persons acting together of Shares which hold more of the voting power of the Company’s voting Shares than do the Shares owned by Temasek or any of its subsidiaries;
		(b)	a merger or reorganisation of the Company which results in a shareholder of the Company other than Temasek or any of its subsidiaries holding more than 50% of the voting power of the Company’s voting Shares;
		(c)	a sale of all or substantially all of the Company’s assets; or
		(d)	a dissolution or liquidation of the Company.
“Committee”	:	The Executive Resource and Compensation Committee of the Company for the time being.
“Communication”	:	Any correspondence made or to be made under the Plan (individually or collectively).
“Company”	:	STATS ChipPAC Ltd., a company incorporated in Singapore.
“EBITDA”	:	The Company’s financial statement net income, subject to add backs for the following items:
		(a)	tax expenses;
		(b)	interest expenses;
		(c)	depreciation and amortisation; and
		(d)	one-time and non-cash items (including but not limited to stock based compensation, equity grant expenses, restructuring and impairment).
“EBITDA Valuation Formula”	:	Has the meaning ascribed to it in Rule 7.5.2.

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“EP”	:	The Company’s economic profits determined as EBITDA less the following items:
		(a)	depreciation and amortisation;
		(b)	tax expenses; and
		(c)	cost of capital.
		For these purposes, “cost of capital” means 11.295% of the aggregate of:
		(i)	net working capital (meaning, current assets (excluding cash and cash equivalents) less non-interest bearing liabilities);
		(ii)	net fixed assets (meaning, gross fixed assets less accumulated depreciation);
		(iii)	goodwill; and
		(iv)	other non-current assets.
“EP Targets”	:	The EP targets set by the Committee.
“Group”	:	The Company and its subsidiaries.
“Listing Manual”	:	The listing manual of the Singapore Exchange.
“Non-Executive Directors”	:	A director of the Company who performs a non-executive function.
“Ordinary Shares”	:	The number of outstanding Shares as of the Adoption Date on a fully-diluted basis, including Shares issuable upon conversion of all outstanding convertible bonds as of the Adoption Date, any Shares issued with regard to any future acquisition and any equity grants awarded prior to the Adoption Date, but for the avoidance of doubt does not include any adjustments due to dilution that may result from future share issuances (other than in the context of any future acquisitions involving the issuance of Shares and issuance of Shares with regard to equity grants awarded prior to the Adoption Date), or future grants of share options, restricted share units and performance shares. For the avoidance of doubt, the number of Ordinary Shares may not be varied by the Committee unless otherwise provided by these Rules.
“Participant”	:	A Non-Executive Director to whom an offer to participate in the Plan has been extended pursuant to Rule 5 (including, where applicable, the executor or personal representative of such Non-Executive Director).
“Performance Multiplier”	:	Has the meaning ascribed to it in Rule 7.
“Performance Share Plan 2009”	:	The STATS ChipPAC Ltd. Performance Share Plan 2009, as modified or altered from time to time.
“Plan”	:	The STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors, as modified or altered from time to time.
“Prescribed Higher Amount”	:	Such dollar amount as set by the Committee.
“Prescribed Lower Amount”	:	Such dollar amount as set by the Committee.
“Qualified Public Offering”	:	Any public offering of the Shares on any stock exchange of

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		recognized international reputation and standing duly approved by the Board.
“Record Date”	:	The date fixed by the Company for the purposes of determining entitlements to dividends or other distributions to, or rights of, holders of Shares.
“Shares”	:	Ordinary shares in the capital of the Company.
“Singapore Exchange”	:	The Singapore Exchange Securities Trading Limited.
“Syndication”	:	Means:
		(a)	any transfer and/or assignment of only economic interests underlying part or all of the Shares held by Temasek or any of its subsidiaries, pursuant to an agreement between Temasek or any of its subsidiaries and a third party(ies), whereby Temasek or any of its subsidiaries retains full voting power of such Shares; or
		(b)	any transfer and/or assignment of interests in part or all of the Shares held by Temasek or any of its subsidiaries to a third party(ies) pursuant to an agreement, whereby such third party(ies) agree to exercise its voting power in concert with Temasek or any of its subsidiaries.
“Temasek”	:	Temasek Holdings (Private) Limited, a company incorporated in Singapore.
“year”	:	Calendar year, unless otherwise stated.
“%”	:	Per centum or percentage.

2.2	Words importing the singular number shall, where applicable, include the plural number and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter gender.
2.3	Any reference to a time of a day in the Plan is a reference to Singapore time.
2.4	Any reference in the Plan to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Act or any statutory modification thereof and not otherwise defined in the Plan and used in the Plan shall have the meaning assigned to it under the Act or any statutory modification thereof, as the case may be.

3.	OBJECTIVES OF THE PLAN
	The Plan is a share incentive scheme. The Plan is proposed on the basis that it is important to give recognition to non-executive directors of the Company who have contributed to the Group. The Plan will give Participants an opportunity to have a personal equity interest in the Company and will help to achieve the following positive objectives:

(a)	to align the interests of the Participants with the interests of the shareholders of the Company;
(b)	to motivate each Participant to maintain a high level of contribution to the Group; and
(c)	to give recognition to the contributions made or to be made by Non-Executive Directors to the Group.

4.	ELIGIBILITY OF PARTICIPANTS
	Non-Executive Directors shall, unless they are also controlling shareholders (as defined in the Listing Manual) of the Company or associates (as defined in the Listing Manual) of such controlling shareholders, be eligible to participate in the Plan at the absolute discretion of the Committee.

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5.	OFFER TO PARTICIPATE
5.1	The Committee may extend an offer to participate in the Plan to such Non-Executive Directors as the Committee may select in its absolute discretion, at any time during the period when the Plan is in force.
5.2	No consideration shall be payable for an offer to participate in the Plan made to, or for Ordinary Shares received by, Non-Executive Directors under the Plan.
5.3	An offer to participate in the Plan shall be personal to the Participant to whom it is extended and, prior to the allotment to the Participant of the Ordinary Shares under the Plan, shall not be transferred (other than to a Participant’s personal representative on the death of that Participant), charged, assigned, pledged or otherwise disposed of, in whole or in part, except with the prior approval of the Committee and if a Participant shall do, suffer or permit any such act or thing as a result of which he would or might be deprived of any rights under an offer to participate in the Plan without the prior approval of the Committee, his participation in the Plan shall immediately cease.

6.	CONSEQUENCES OF CESSATION AS NON-EXECUTIVE DIRECTOR AND CHANGE IN CONTROL OR SALE
6.1	Consequences of Cessation as Non-Executive Director
6.1.1	In the event that a Participant ceases to be a Non-Executive Director for any reason whatsoever, his participation in the Plan shall, unless otherwise determined by the Committee, immediately cease without any claim whatsoever against the Company.
6.1.2	Where the Committee exercises its discretion and determines that, a Participant’s participation in the Plan shall not cease even though such Participant has ceased to be a Non-Executive Director:

(a)

that Participant may, at the discretion of the Committee, earn a pro-rata portion of the Ordinary Shares based on the length of the Participant’s service as a Non-Executive Director during the period beginning on 1 January 2007 and ending on 31 December 2011, with the number of Ordinary Shares issuable to be determined as and when the same is determined for the other Participants. Any such pro-rata portion shall be determined in accordance with the same criteria that such Participant would have been subject had the Participant continued to serve as a Non-Executive through 31 December 2011. Such Participant shall receive payment with regard to his pro-rata portion of the Ordinary Shares on the same date the remaining Participants receive their Ordinary Shares; and

(b)

in the event the Ordinary Shares are issuable on or after 31 December 2011, the Committee shall have discretion as to whether or not 100% of the Ordinary Shares issuable in payment of the pro-rata portion of the Ordinary Shares issuable shall become immediately payable, or whether 50% of the pro-rata portion of the Ordinary Shares issuable will be forfeited. Should the Ordinary Shares be unavailable for payment as marketable securities, such Participants shall receive, in the form of cash from the Company, the value of such Ordinary Shares that would be otherwise payable, as determined in accordance with the EBITDA Valuation Formula.

6.2	Consequences of Change in Control or Sale
6.2.1	In the event of a Change in Control, determination of the number of Ordinary Shares issuable shall accelerate immediately prior to such Change in Control event, and the Participants shall have the right to participate in any sale transaction with Temasek or any of its subsidiaries (as the case may be) on a tag-along basis in any transaction resulting in a Change in Control with respect to all Ordinary Shares issuable.
6.2.2	In the event of a sale of Shares by Temasek or any of its subsidiaries which does not result in a Change in Control (including in any Qualified Public Offering but excluding in any Syndication), a pro-rata issuance of Ordinary Shares shall occur, and the Participants shall have the right to participate in any sale transaction with Temasek or any of its subsidiaries (as the case may be) on a tag-along basis with respect to all Ordinary Shares issuable.
6.2.3	The consideration for the sale of any Ordinary Shares pursuant to any transaction contemplated by Rule 6.2 shall be in the form of marketable securities. However, if marketable securities are not available, the Participants shall receive, in the form of cash from the Company, the value of such Ordinary Shares that would be otherwise payable, as determined in accordance with the EBITDA Valuation Formula.

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7.	DETERMINATION OF ORDINARY SHARES ISSUABLE, PAYMENT AND OTHER PROVISIONS
7.1	Determination of Number of Ordinary Shares Issuable
7.1.1	Unless as otherwise provided in Rule 6, determination of the number of Ordinary Shares issuable under the Plan shall occur on or after 31 December 2011 and in accordance with this Rule 7, subject to the Participant then holding office as a Non-Executive Director on 31 December 2011.
7.1.2	The number of Ordinary Shares to be issued to each Participant shall be determined by the Committee, and shall depend on the extent to which the EP Targets are achieved or exceeded as well as any other criteria and considerations deemed appropriate by the Committee. If issuance of the Ordinary Shares occurs:

(a)	on or after 31 December 2011, only the EP Target for 2011 is applicable; and
(b)	before 31 December 2011, the EP Target for the most recently completed financial year or for the most recently completed four financial quarters, as determined by the Committee, is applicable.

7.1.3	The number of Ordinary Shares which may be issued under the Plan shall be calculated based on 0.30% of the outstanding Ordinary Shares (the “Base Number”), with the aggregate number of the Ordinary Shares available for delivery to be subject to these Rules and to the Performance Multiplier at each time of payment, whether on a pro-rata basis or completely, the minimum of which would be 50% of the Base Number to be issued for EP of at least the Prescribed Lower Amount below the relevant EP Target and the maximum of which would be 150% of the Base Number to be issued for EP of the Prescribed Higher Amount or more above the relevant EP Target (and proportionately between 50% and 150% of EP Target), rounded down to the nearest whole Ordinary Share. Where a minimum of the Prescribed Lower Amount below the relevant EP Target is not met, the Committee shall have the power, in its good faith and reasonable discretion, to determine the aggregate number of Ordinary Shares that may be deliverable. In the event that the Performance Multiplier is applied to the maximum extent permissible under the Plan, an aggregate of up to 0.45% of the Ordinary Shares could be payable and issued.
7.2	Payment
7.2.1	Subject to these Rules, to the Participant’s then holding office as a Non-Executive Director as of 31 December 2011 and on the basis that there is no event triggering full issuance of Ordinary Shares and payout (or pro-rata issuance of the Ordinary Shares and payout in excess of 50%), upon determination of the number of Ordinary Shares issuable on or after 31 December 2011, 50% of the unissued Ordinary Shares issuable shall become immediately payable by way of an allotment to the Participant of the relevant number of Ordinary Shares. Should the Ordinary Shares be unavailable for payment as marketable securities, such Participants shall receive, in the form of cash from the Company, the value of such Ordinary Shares that would be otherwise payable, determined in accordance with the EBITDA Valuation Formula. The remaining 50% of the Ordinary Shares issuable shall remain as unissued Ordinary Shares and shall be carried forward into a new share incentive plan to be adopted by the Company.
7.2.2	Payment shall be made as provided in these Rules no later than 15 March 2012, provided that the audited financial statements of the Company are then available. Otherwise, payment shall be made on such date as the Committee may determine to be appropriate.
7.3	Listing and Quotation of Shares
7.3.1	Where new Shares are allotted pursuant to these Rules at a time when the Shares are listed or quoted on the Singapore Exchange (and/or such other stock exchange upon which the Shares may be listed and quoted), the Company shall, as soon as practicable after such allotment, apply to the Singapore Exchange (and/or such other stock exchange upon which the Shares may be listed and quoted) for permission to deal in and for quotation of such Shares.
7.3.2	In the event that the Shares are then listed or quoted on the Singapore Exchange, Shares which are allotted to a Participant pursuant to these Rules shall, unless otherwise determined by the Committee, be issued in the name of, or transferred to, CDP to the credit of the securities account of that Participant maintained with CDP or the securities sub-account of that Participant maintained with a depository agent, in each case, as designated by that Participant.

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7.4	Ranking of Shares
	New Shares allotted and issued pursuant to these Rules shall:

(a)	be subject to all the provisions of the Articles and the Memorandum of Association of the Company; and
(b)	rank in full for all entitlements, including dividends or other distributions declared or recommended in respect of the then existing Shares, the Record Date for which is on or after the date the Ordinary Shares are issued pursuant to the Plan, and shall in all other respects rank pari passu with other existing Shares then in issue.

7.5	Restrictions on Shares
7.5.1	Prior to a Qualified Public Offering, Shares allotted and issued pursuant to these Rules shall be subject to the following restrictions and rights:

(a)	a right of first refusal by Temasek or any of its subsidiaries, as the case may be, who is then a shareholder of the Company, on any sale by a Participant of his Shares; and
(b)	a call right by Temasek or any of its subsidiaries, as the case may be, who is then a shareholder of the Company, and a put right by the Participant (or, at the discretion of the Committee, the beneficiaries of such Participant in the event of the Participant’s death) upon a Participant ceasing to hold office as a Non-Executive Director.

7.5.2 The price for the transfer of Shares pursuant to this Rule 7.5 shall be based on the following EBITDA Valuation Formula:

(a)	EBITDA of the Company multiplied by the ratio of enterprise value/EBITDA trailing twelve (12) months for the Company’s listed peers equals enterprise value* of the Company (“EV”).
	* Enterprise value of Company’s listed peers is calculated based on the average share price during the last two fiscal quarters prior to the valuation date.
(b)	EV minus net debt of the Company and minority interest of the Company equals equity value at exit.
(c)	Price of shares equals equity value at exit divided by the Ordinary Shares at exit.

7.5.3 The restrictions and rights set out in this Rule 7.5 do not apply as long as the Shares are listed and traded on the Singapore Exchange and/or any other internationally recognized stock exchange, and shall lapse on any Qualified Public Offering of the Shares.

8	LIMITATIONS ON THE SIZE OF THE PLAN
8.1	The total number of Shares which may be issued under the Plan on any date:

(a)	when added to the total number of new Shares issued and issuable under the Plan, shall not exceed 0.45% of the total number of the outstanding Ordinary Shares; and
(b)	when added to the total number of new Shares issued and issuable (i) under the Plan, and (ii) pursuant to awards granted under the Performance Share Plan 2009, shall not exceed 15% of the total number of issued Shares from time to time (excluding treasury shares).

8.2 The Ordinary Shares available for issuance under the Plan shall be authorized by the Company’s shareholders and all Ordinary Shares issuable under the Plan will be authorized and approved by the Board.

9.

ADJUSTMENT EVENTS

9.1

In the event of any dividend, share split, combination, or acquisition involving a share issuance or any exchange of shares, amalgamation, arrangement or consolidation, spin-off, recapitalisation or other distribution (other than ordinary cash dividends) of the assets of the Company to its shareholders, or any other change affecting the Ordinary Shares or the Share price, the Committee shall make such proportionate adjustments, if any, as necessary to reflect such change with respect to the aggregate number and type of shares (subject to compliance with applicable laws) that may be issued under the Plan and the applicable performance targets or criteria with respect thereto.

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9.2	Notwithstanding the provisions of Rule 9.1, any adjustment (except in relation to a capitalisation issue) must be confirmed in writing by the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.
9.3	Upon any adjustment made pursuant to this Rule 9, the Company shall notify the Participants in writing. Any adjustment shall take effect upon such written notification being given or on such date as may be specified in such written notification.

10.	ADMINISTRATION OF THE PLAN
10.1	The Plan shall be administered by the Committee (or any other committee and/or persons duly authorized and appointed by the Board to administer the Plan) in its absolute discretion with such powers and duties as are conferred on it by the Board, provided that no member of the Committee shall participate in any deliberation or decision in respect of Ordinary Shares issuable to him under the Plan.
10.2	Except to the extent certain terms and conditions are required by the Plan, the Committee shall have the power to make and vary such arrangements, guidelines and/or regulations (not being inconsistent with the Plan) for the implementation and administration of the Plan and/or to give effect to the provisions of the Plan, as it may, in its absolute discretion, think fit. Without prejudice to the generality of the foregoing, the Committee has the broad discretion to select the Participants at any time the Plan is in effect and each Participant’s participation in the Plan. Any matter pertaining or pursuant to the Plan and any dispute, difference or uncertainty as to the interpretation of the Plan or any rule, regulation or procedure thereunder or any rights under the Plan shall be determined by the Committee and binding in all respects.
10.3	The Plan shall not impose on the Company or the Committee or any of its members any liability whatsoever in connection with:

(a)	the failure or refusal by the Committee to exercise, or the exercise by the Committee of, any discretion under the Plan; and/or
(b)	any decision or determination of the Committee made pursuant to any provision of the Plan.

10.4 Any decision or determination of the Committee made pursuant to any provision of the Plan (other than a matter to be certified by the Auditors) shall be final, binding and conclusive (including for the avoidance of doubt, any decisions pertaining to disputes as to the interpretation of the Plan or any rule, regulation or procedure hereunder or the application of any formula hereunder or as to any rights under the Plan). The Committee shall not be required to furnish any reasons for any decision or determination made by it.

11.	NOTICES
11.1	Any notice required to be given by any Participant to the Company shall be sent or made to the registered office of the Company or such other address (including an electronic mail address) or facsimile number, and marked for the attention of the Committee (c/o the General Counsel of the Company), as may be notified by the Company to the Participant in writing.
11.2	Any notices or documents required to be given to a Participant or any correspondence to be made between the Company and a Participant shall be given or made by the Committee (or such person(s) as it may from time to time direct) on behalf of the Company and shall be delivered to a Participant by hand or sent to a Participant at his home address, electronic mail address or facsimile number according to the records of the Company or the last known address, electronic mail address or facsimile number provided by the Participant to the Company.
11.3	Any notice or other communication from a Participant to the Company shall be irrevocable, and shall not be effective until received by the Company. Any notice or communication from the Company to a Participant shall be deemed to be received by the Participant, when left at the address specified in Rule 11.2 or, if sent by post, on the day following the date of posting or, if sent by electronic mail or facsimile transmission, on the day of despatch.
11.4	It shall be the Participant’s sole responsibility to ensure that all information contained in a Communication to the Company is complete, accurate, current, true and correct.
11.5	The Company’s records of the Communications, and its record of any transactions maintained by any relevant person authorized by the Company relating to or connected with the Plan, whether stored in electronic or printed form, shall be binding and conclusive on a Participant and shall be conclusive evidence of such Communications and/or transactions. All such records shall be admissible in evidence and the Participant shall not challenge or dispute the admissibility, reliability, accuracy or the authenticity of the contents of such records merely on the basis that such records were incorporated and/or set out in

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	electronic form or were produced by or are the output of a computer system, and the Participant waives any of his rights (if any) to so object.
11.6	Any provision in these Rules requiring a Communication to be signed by a Participant may be satisfied in the case of an electronic Communication, by the execution of any on-line act, procedure or routine designated by the Company to signify the Participant’s intention to be bound by such Communication.

12.	MODIFICATIONS TO THE PLAN
12.1	Any or all of the Rules of the Plan may be modified and/or altered at any time and from time to time by a resolution of the Committee, except that:

(a)	no modification or alteration shall adversely affect the rights of any Participant except with the consent in writing of not less than a majority in number of those Participants whose rights would be so adversely affected;
(b)	the definitions of “Committee”, “Group”, “Non-Executive Director”, “Ordinary Shares” and “Participant” and the provisions of Rules 4, 5, 6, 7, 8, 9, 10 and this Rule 12 shall not be altered to the advantage of Participants except with the prior approval of the Company’s shareholders in general meeting; and
(c)	no modification or alteration shall be made without the prior approval of the Singapore Exchange and such other regulatory authorities as may be necessary.

	For the purposes of Rule 12.1(a), the opinion of the Committee as to whether any modification or alteration would adversely alter the rights of any Participant shall be final, binding and conclusive. For the avoidance of doubt, nothing in this Rule 12.1 shall affect the right of the Committee under any other provision of the Plan to amend or adjust any provision of the Plan or any offer to participate in the Plan.
12.2	Notwithstanding anything to the contrary contained in Rule 12.1, the Committee may at any time by a resolution (and without other formality, save for the prior approval of the Singapore Exchange, if necessary) amend or alter the Plan in any way to the extent necessary or desirable, in the opinion of the Committee, to cause the Plan to comply with, or take into account, any statutory provision (or any amendment or modification thereto, including amendment of or modification to the Act) or the provision or the regulations of any regulatory or other relevant authority or body (including the Singapore Exchange, if applicable).
12.3	Written notice of any modification or alteration made in accordance with this Rule 12 shall be given to all Participants.

13.	DURATION OF THE PLAN
13.1	The Plan shall continue to be in force at the discretion of the Committee, subject to a maximum period of ten years commencing on the Adoption Date, provided always that the Plan may continue beyond the above stipulated period with the approval of the Company’s shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required.
13.2	The Plan may be terminated at any time by the Committee or, at the discretion of the Committee, by resolution of the Company in a general meeting, subject to all relevant approvals which may be required and if the Plan is so terminated, no further Ordinary Shares shall be issued by the Committee hereunder.

14.

TAXES AND DEDUCTIONS

All taxes (including income tax) arising from the allotment and issuance of Ordinary Shares to any Participant under the Plan shall be borne by that Participant. There shall be deducted or withheld from any payment to be made under the Plan any amounts which the Company or any of its subsidiaries is entitled, authorized or bound to deduct or withhold pursuant to applicable laws to account of income tax or other levies payable on the payment or any other applicable law or regulation. Without prejudice to the generality of the foregoing, if the payment should be subject to contributions in connection with any mandatory public savings plan administered by any governmental authority or statutory board, the Company shall be entitled to reduce the payment by an amount equal to such contribution amounts required to be made.

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15.	COSTS AND EXPENSES OF THE PLAN
15.1	Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue and allotment of any Shares in CDP’s name, the deposit of share certificate(s) with CDP, the Participant’s securities account with CDP, or the Participant’s securities sub-account with a CDP depository agent.
15.2	Save for the taxes referred to in Rule 14 and such other costs and expenses expressly provided in the Plan to be payable by the Participants, all fees, costs and expenses incurred by the Company in relation to the Plan including but not limited to the fees, costs and expenses relating to the allotment and issue of Shares shall be borne by the Company.

16.

DISCLAIMER OF LIABILITY

Notwithstanding any provisions herein contained, the Committee and the Company and the directors and employees of the Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in any event, including but not limited to the delay by the Company in issuing the Shares or applying for or procuring the listing of new Shares on the Singapore Exchange (and/or such other stock exchange upon which the Shares may be listed or quoted) in accordance with Rule 7.4.1.

17.	DISCLOSURES IN ANNUAL REPORT
	The Company will make such disclosures in its annual report for as long as the Plan continues in operation as required by the Listing Manual including the following (where applicable):

(a)	the names of the members of the Committee administering the Plan;
(b)	in respect of all the Participants of the Plan, the following information:

(aa)	the name of the Participant; and
(bb)	the number of new Shares issued to such Participant during the financial year under review; and

(c) in relation to the Plan, the aggregate number of Ordinary Shares that have been allotted and issued under the Plan since the commencement of the Plan to the end of the financial year under review,

or as otherwise required under the Listing Manual from time to time.

18.	GOVERNING LAW
	The Plan shall be governed by, and construed in accordance with, the laws of the Republic of Singapore. Each Participant, by accepting an offer to participate in accordance with the Plan, and the Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore.

19.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT, CHAPTER 53B
	No person other than the Company or a Participant shall have any right to enforce any provision of the Plan or any offer to participate in the Plan by virtue of the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore.

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EX-4.44

Exhibit 4.44

No.:3101402009M100007300

5703B

Loan Contract

Bank of Communications Co., Ltd.

No.: 3101402009M100007300

Loan Contract

Important

     The borrower is advised to read carefully the entire text of this contract, especially those provisions marked with **. Please do not hesitate to contact the creditor for explanation to any question that arises.

Borrower:     STATS ChipPAC Shanghai Co.,Ltd.

Legal Representative (Chief):     LEE YIK CHOONG

Legal Address:     No.188 Huaxu Rd, Xujing Town, Qingpu District, Shanghai

Correspondence Address:     As above

Creditor:     Shanghai Qingpu Branch/Sub-Branch, Bank of Communications Co., Ltd

Chief:     Dong Yibei

Correspondence Address:     No.348 Gongyuan Rd, Qingpu District

Whereas,

The borrower has applied to the creditor for loan; and the borrower and the creditor have hereby formulated this Contract following their bilateral consultation, so as to clarify their respective rights and obligations.

Article I Loan

I. 1	Currency:     USD;
I. 2	Amount (in words):     Three million.
I. 3	The loan under this Contract is used only as:     Operating
I. 4	Term of Loan:     06 (mm)/ 30 (dd)/ 09 (yy) till 06 (mm)/ 25 (dd)/ 10 (yy).

Article II Interest Rate and Calculation of Interest

II. 1 Interest Rate under this Contract:

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— Fixed RMB Interest Rate: The interest rate during the period of this Contract shall be executed on the basis of            <(            (month)            (year)>;

— Floating RMB Interest Rate: The interest rate shall be based on            base interest rate /            base interest rate            upward float/            base interest rate            downward float in            (time limit) upon the date of grant of the loan amount due by the creditor. In case of an adjustment to the base interest rate by the People’s Bank over the said loan during the loan period, the creditor shall have the right to make a corresponding adjustment to the interest rate over the said loan, and the range of upward (downward) float shall remain unchanged. The interest rate after the adjustment shall be executed according to the following:

(     )	Interest Rate to Be Decided Once Every Year:
	The borrower shall implement according to the interest rate as agreed on in this Contract for one year from the date the loan amount is granted. Upon the conclusion of the grant of loan for the year (on the basis of the date of grant of the first loan amount), the base interest rate is to be adjusted according to the base interest rate as announced by the People’s Bank for the day;
(     )	Interest Rate to Be Decided Once Every Six Months:
	The borrower shall implement according to the interest rate as agreed on in this Contract for six months from the date the loan amount is granted. Upon the conclusion of the grant of loan for the six months (on the basis of the date of grant of the first loan amount), the base interest rate is to be adjusted according to the base interest rate as announced by the People’s Bank for the day;
(     )	Interest Rate to Be Decided Once Every Three Months:
	The borrower shall implement according to the interest rate as agreed on in this Contract for three months from the date the loan amount is granted. Upon the conclusion of the grant of loan for the three months (on the basis of the date of grant of the first loan amount), the base interest rate is to be adjusted according to the base interest rate as announced by the People’s Bank for the day;
(     )	Interest Rate to Be Decided Once Every Month:
	The borrower shall implement according to the interest rate as agreed on in this Contract for one month from the date the loan amount is granted. Upon the conclusion of the grant of loan for the month (on the basis of the date of

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	grant of the first loan amount), the base interest rate is to be adjusted according to the base interest rate as announced by the People’s Bank for the day;
(     )	Interest rate is to be adjusted on daily basis according to the base interest rate as announced by the People’s Bank for the day;

In case the base interest rate after an adjustment by the People’s Bank turns out to be a floating interest rate or cancelled base interest rate, both parties shall discuss and consult with each other as to an adjustment to the interest rate under this Contract. However, the interest rate after the adjustment shall not be lower than the then applicable interest rate. If the two parties concerned have failed to reach an agreement over the interest rate after adjustment in over            month/months upon the date of the adjustment by the People’s Bank, the creditor has the right to announce that the loan amount under this Contract is prematurely due.

 a  USD           (foreign currency) Libor+0.5%

II. 2	Daily Interest Rate = Monthly Interest Rate / 30; Monthly Interest Rate = Annual Interest Rate / 12.
II. 3	Calculation of Interest:

II. 3. 1

Normal Interest = Interest Rate under This Contract * Loan Amount Granted * Holding Days. Holding days are calculated commencing on the date of loan and concluding on the date of obligation.

II. 3. 2

Penalty interest for overdue loan or appropriated loan is calculated on the basis of the penalty interest rate for the overdue loan or the appropriated loan, and the actual days. The penalty interest rate for the overdue loan is 50% upward of the interest rate as specified in this Contract, and that for the appropriated loan is 100% upward of the interest rate as specified in this Contract, in case of a RMB loan; and the creditor has the right to make a corresponding adjustment to the penalty interest rate under this Contract and execute the new penalty interest rate from the date of adjustment of the interest rate by the People’s Bank, in case of an adjustment to the base interest rate by the People’s Bank over the float-interest-rate-based overdue loan or appropriated loan. The penalty interest rate, in case of a foreign exchange loan, shall be calculated on the basis of 50 % upward of the interest rate as specified in this Contract

II. 4 The interest for the loan under this Contract is settled according to the 1. of the following two options, with the principal and interest to be cleared up in one operation when due. The date of settlement of the interest is the date of payment of the interest:

1. Settlement of interest on 20^th day of the last month of each quarter; or

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2. Settlement of interest on 20^th day of each month.

II. 5	Other Interest Rate Agreed On
	Besides, the lender charges the borrower 1.3% of the loan amount as a commission.

Article III Grant and Repayment of Loan

III. 1 The borrower should undergo the relevant procedure in three banking days in advance before withdrawing the loan amount. In addition, the withdrawing should be conducted in accordance with the following plan for loan grant.

Date of Grant						Amount Granted
06	(mm)/	30	(dd)/	09	(yy);	three million US dollars	(in words)
	(mm)/		(dd)/		(yy);		(in words)
	(mm)/		(dd)/		(yy);		(in words)
	(mm)/		(dd)/		(yy);		(in words)

**III. 2 The creditor shall have the right to refuse to grant the loan amount before all of the following conditions are satisfied:

1.	The borrower has accomplished all the legal formalities with regard to the relevant government permit, approval or registration as well as the other formalities as required by the creditor. And the said formalities concerning the government permit, approval or registration remain to be effective;
2.	The Contract on Guarantee under this Contract (if applicable) has come into effect and will continue to be effective. In case the Contract on Guarantee is the Contract on Mortgage and/or Contract on Hypothecation, the right over the pledge shall be established and continue to be effective;
3.	There has occurred no significant change so far that proves unfavorable to the business management and financial situation of the borrower;
4.	The borrower has not violated this Contract.

III. 3	The actual date of grant and the amount of loan granted shall be based on the date and the amount recorded in the ‘Certificate of Loan’.
III. 4	The borrower should pay back as scheduled the loan amount according to the due date as specified in Clause I. 4 and the following plan. Should the due date registered in the ‘Certificate of Loan’ be different from that as agreed on in this Contract, the former

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shall be the basis.

Due Date						Repayment Amount
06	(mm)/	25	(dd)/	10	(yy);	three million US dollars	(in words)
	(mm)/		(dd)/		(yy);		(in words)
	(mm)/		(dd)/		(yy);		(in words)
	(mm)/		(dd)/		(yy);		(in words)

**III. 5 The loanee is not allowed to pay back the loan amounts prematurely without the loaner’s consent.

**Article IV Statement and Pledge by the Borrower

IV. 1	The borrower is an independent civil entity legally established and legally existing with a full capacity to enjoy all the rights as entitled and a full ability to perform on his own all his obligations under this Contract and undertake for himself all his civil responsibilities as due.
IV. 2	To sign and implement this Contract is the true expression of the borrower, with all the required consent, approval and authority and with no fault that can be found legally.
IV. 3	All the documents, materials and information provided by the borrower to the creditor in the course of the signature and performance of this Contract are authentic, accurate, complete and valid, with no information hidden away that may possibly affect his financial status and repayment ability.
IV. 4	At the time of signature of this Contract, the borrower is not a stockholder of the guarantor or the ‘actual controller’ as defined in the ‘Company Law’, nor does the borrower have any plan to be a stockholder of the guarantor or the ‘actual controller’.

Article V Rights and Obligations of the Creditor

V. 1	The creditor shall have the right to recover the loan principal and the interest (inclusive of the compound interest and the penalty interest for overdue and appropriated loan), collect from the borrower the expense(s) payable, and exercise other rights as regulated by the relevant laws or specified in this Contract.
V. 2	The creditor shall keep confidential the business secret of the borrower acquired in the course of the implementation of this Contract as well as the financial and business materials and other information specified as ‘classified’ in writing by the borrower, unless otherwise regulated by law or specified in this Contract.

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Article VI Obligations of the Borrower

VI. 1	The borrower should pay back the loan principal and pay the related interest under this Contract in accordance with the schedule, amount, and currency as specified in this Contract.
VI. 2	The borrower shall not use the loan under this Contract for any other purpose.

**VI. 3	The borrower should undertake all the expenses under the Contract, including but not limited to the notarization cost, evaluation fee, appraisal expense and registration charge.
**VI. 4	The borrower should comply with the relevant business system and operation as adopted by the creditor in the handling of loan operation, including but not limited to the assistance to the creditor in the supervision and inspection over the use of the loan and the business operation of the borrower; provide promptly all the financial statements and other data and information as requested by the creditor; and assure that the documents, materials and information provided are authentic, complete and accurate.
**VI. 5	The borrower should give the creditor at least a thirty-day written notice if any of the following applies, and should not take the following actions before the former has cleared up the loan principal and interest due under this Contract, or provided a plan for repayment of debt and a guarantee that are accepted by the creditor:

1.	Sale, disposal as a gift, lease, loan, transfer, mortgage, hypothecation or disposal in some other manner of the major property, or all of or most of the property;
2.	Major change in the business system or the organizational form of property right, including but not limited to contracting, leasing, joint business operation, corporate system reform, stock holding cooperation system reform, enterprise sale, merging (purchasing), joint venture (cooperation), branching, subsidiary formation, property right transfer, and capital reduction.

**VI. 6 The borrower should give a written notice to the creditor in seven days upon the date of the occurrence or possible occurrence of any of the following:

1.	Amendment to the articles of association; change of items for industrial and commercial registration such as business name, legal representative, location, correspondence address or business scope of enterprise; or decision of great impact on financial affairs or human resources;
2.	Scheduled application for bankruptcy, or possible application by the borrower or guarantor for bankruptcy, or bankruptcy applied for by the creditor;

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3.	Involvement in some major legal action, arbitration, administrative measure, or a compulsory measure, such as property preservation, taken on the principal property or the guaranty object under this Contract;
4.	Guarantee provided for a thirty party, resulting in major unfavorable impact on the financial situation or the ability to perform this Contract;
5.	Signature of a contract that is of a major impact on his business operation and financial status;
6.	Suspension of production, going out of business, dissolution of business, suspension of business to bring up to standard, cancellation of business registration or cancellation of business license on the part of the borrower or the guarantor;
7.	Illegal activity/activities found in the borrower, or the legal representative (chief) or any of the major managerial personnel of the borrower, which are in violation of the relevant laws or the relevant applicable transaction regulation;
8.	Serious frustration in business, worsening of financial situation or an instance of negative impact upon the guarantor in the normal business operation, business situation or obligation ability;
9.	Related business dealing resulted, the amount of which reaches or exceeds 10% of the net assets as recently appraised;
10.	The borrower having become or being likely to be a stockholder of the guarantor or the ‘actual controller’ as defined in the ‘Company Law’.

**VI. 7

In case the guarantee under this Contract is changing towards an unfavorable direction for the creditor, the borrower should provide promptly some other guarantee that the creditor may accept.

‘Change’ as named in this Clause includes but not limited to: merging, branching, suspension of production, going out of business, dissolution of business, suspension of business to bring up to standard, cancellation of business registration, cancellation of business license, application or being under application for bankruptcy on the part of the guarantor; major change in the business operation or financial situation of the guarantor; involvement by the guarantor in some major legal action, arbitration, administrative measure or property preservation action or other compulsory measures over his principal property; deduction or possible deduction in value of the object guaranteed or

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compulsory measure having been taken over the object guaranteed; breaching act or violation against the applicable transaction regulations on the part of the guarantor or his legal representative (chief) or major managerial personnel; guarantor being an individual, or being missing or dead (announced dead); breaching act against provisions under the contract on guarantee; dispute occurring between the guarantor and the borrower; request by the guarantor for dissolution of the contract on guarantee; the contract on guarantee yet to be effective, or found ineffective, or cancelled; the right to the object guaranteed being not established or invalid; or other incident affecting the security of the creditor’s right of the creditor.

Article VII Other Items Agreed On

     Breach of contract:(1) asset-liability ratio is higher than 60% (asset-liability ratio = (total liabilities / total assets) * 100%); (2) interest coverage ratio is less than 6(interest coverage ratio = (depreciation + interest Pre-tax profit) / interest); (3) bank transaction volume weight ratio of our branch is less than 50% of total transaction volume, if found the ratio is less than 50% of total transaction volume, the borrower will be notified one month in advance by lender for critical action next month. If next month critical action is still failed, then the credit line will be terminated by the lender.

**Article VIII Pre-maturity of Loan

Should any of the following occur, the creditor shall have the right to suspend the grant of the unused loan amount to the borrower, announcing unilaterally partial or complete pre-maturity of the loan for the borrower under this Contract and demanding that the borrower repay all the principal due and pay off the related interest without delay:

1.	The statement and the pledge made in Article IV by the borrower are found untruthful;
2.	The borrower has violated this Contract;
3.	Any one of the circumstances listed in Clause VI. 6 as items for notice has actually occurred, which the creditor believes will affect the security of his creditor’s right;
4.	The borrower is found to have committed, in his performance of other contracts signed with the creditor, a breaching act such as delay in implementation, and has refused to rectify even though advised to do so by the creditor.

**Article IX Breach

IX. 1 The borrower, who has failed to repay in full the loan principal and pay the interest, or

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	to use the loan according to the purpose as specified in this Contract, should pay the interest calculated on the basis of the penalty interest rate for overdue loan or the penalty interest rate for appropriated loan. In addition, the borrower should undertake the compound interest for the interest that is to be paid and yet unpaid.
IX. 2	The borrower, who has failed to repay in full the loan principal and pay the interest as due, should undertake the call expense, legal action charge (or arbitration charge), preservation fee, notice fee, execution fee, attorney fee, travel expense and other expenses which the creditor has paid for the realization of the creditor’s right.
IX. 3	The creditor, who believes that the borrower has avoided supervision, or has delayed in repayment of loan principal and interest, or has ill-intentionally dodged a creditor, shall have the right to report to the relevant authority on the said act and publicize it in the mass media.

**Article X Agreement on Deduction

X. 1	With the authorization by the borrower who is yet to repay the loan principal, interest, penalty interest or other expenses due, the creditor shall have the right to deduct from the balance in any of the deposit accounts of the borrower at the Bank of Communications the amount for repayment of the debt due.
X. 2	After the deduction, the creditor should inform the borrower of the account number involved in the deduction, the number of the Contract, the number of the ‘Certificate of Loan’, the amount deducted, and the balance of the debt involved.
X. 3	The deducted amount, which is found to be insufficient to pay back all the debt amount, should be used first to cover the amount due for the current installment. Should the delay in repayment for the principal and interest extend in less than 90 days, the balance after the deduction shall be used first to pay back the interest or the penalty interest or the compound interest payable before being employed to cover the principal due. Should the delay in repayment for the principal or the interest exceed 90 days, the balance after the deduction shall be used first to pay back the principal payable before being employed to cover the interest or the penalty interest or the compound interest due.
X. 4	Should the currency of the amount deducted be different from that of the debt to be paid back, the conversion rate for foreign exchange as announced by the Bank of Communications upon the date of the deduction shall be the basis.

Article XI Settlement of Dispute

Any dispute arising from this Contract should be settled by taking legal action with the court of judicial power over the area where the creditor is located. During the period of

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dispute, the parties concerned should continue to implement the terms that are not involved in the dispute.

Article XII Miscellaneous

XII. 1	The ‘Certificate of Loan’ under this Contract, and the relevant documents and materials as affirmed by the two parties concerned form an inseparable part of this Contract.
XII. 2	This Contract comes into effect upon the signature (or seal) by the legal representatives (chiefs) or authorized representatives of both parties involved, with their respective common seals affixed thereto.
XII. 3	This Contract is made in FOUR copies to be held ONE copy/copies each by either of the two parties concerned, and the guarantor..

Statement: Should any discrepancy in meaning be found between the version above and that in Chinese, the latter shall prevail.

The borrower has read all the above provisions; the
creditor has made the corresponding explanations in
response to the request by the borrower; and the borrower
has no objection to all the particulars.

Borrower (Common Seal):	Creditor (Common Seal):
[Common Seal of STATS ChipPAC Shanghai Co., Ltd.]	[Common Seal of Bank of Communications Co., Ltd.]
Legal Representative (Chief) or Authorized Representative	Legal Representative (Chief) or Authorized Representative
(Signature or Seal):	(Signature or Seal):
/s/ Lee Yik Choong	/s/ Ling Haiqiang
Date Signed:	Date Signed:
06 (mm)/ 30 (dd)/ 09 (yy)	06 (mm)/ 30 (dd)/ 09 (yy)

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EX-4.45

Exhibit 4.45

No.:3101402009M100009700

5703B

Loan Contract

Bank of Communications Co., Ltd.

No.: 3101402009M100009700

Loan Contract

Important

     The borrower is advised to read carefully the entire text of this contract, especially those provisions marked with **. Please do not hesitate to contact the creditor for explanation to any question that arises.

Borrower:     STATS ChipPAC Shanghai Co.,Ltd.

Legal Representative (Chief):     LEE YIK CHOONG

Legal Address:     No.188 Huaxu Rd, Xujing Town, Qingpu District, Shanghai

Correspondence Address:     As above

Creditor:     Shanghai Qingpu Branch/Sub-Branch, Bank of Communications Co., Ltd.

Chief:     Dong Yibei

Correspondence Address:     No.348 Gongyuan Rd, Qingpu District

Whereas,

The borrower has applied to the creditor for loan; and the borrower and the creditor have hereby formulated this Contract following their bilateral consultation, so as to clarify their respective rights and obligations.

Article I Loan

I. 1	Currency:     USD;
I. 2	Amount (in words):     Twelve million.
I. 3	The loan under this Contract is used only as:     Operating
I. 4	Term of Loan:     06 (mm)/ 30 (dd)/ 09 (yy) till 06 (mm)/ 25 (dd)/ 10 (yy).

Article II Interest Rate and Calculation of Interest

II. 1 Interest Rate under this Contract:

— Fixed RMB Interest Rate: The interest rate during the period of this Contract shall be executed on the basis of            <(            (month)            (year)>;

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— Floating RMB Interest Rate: The interest rate shall be based on            base interest rate /            base interest rate            upward float/            base interest rate            downward float in            (time limit) upon the date of grant of the loan amount due by the creditor. In case of an adjustment to the base interest rate by the People’s Bank over the said loan during the loan period, the creditor shall have the right to make a corresponding adjustment to the interest rate over the said loan, and the range of upward (downward) float shall remain unchanged. The interest rate after the adjustment shall be executed according to the following:

(     )	Interest Rate to Be Decided Once Every Year:
	The borrower shall implement according to the interest rate as agreed on in this Contract for one year from the date the loan amount is granted. Upon the conclusion of the grant of loan for the year (on the basis of the date of grant of the first loan amount), the base interest rate is to be adjusted according to the base interest rate as announced by the People’s Bank for the day;
(     )	Interest Rate to Be Decided Once Every Six Months:
	The borrower shall implement according to the interest rate as agreed on in this Contract for six months from the date the loan amount is granted. Upon the conclusion of the grant of loan for the six months (on the basis of the date of grant of the first loan amount), the base interest rate is to be adjusted according to the base interest rate as announced by the People’s Bank for the day;
(     )	Interest Rate to Be Decided Once Every Three Months:
	The borrower shall implement according to the interest rate as agreed on in this Contract for three months from the date the loan amount is granted. Upon the conclusion of the grant of loan for the three months (on the basis of the date of grant of the first loan amount), the base interest rate is to be adjusted according to the base interest rate as announced by the People’s Bank for the day;
(     )	Interest Rate to Be Decided Once Every Month:
	The borrower shall implement according to the interest rate as agreed on in this Contract for one month from the date the loan amount is granted. Upon the conclusion of the grant of loan for the month (on the basis of the date of grant of the first loan amount), the base interest rate is to be adjusted according to the base interest rate as announced by the People’s Bank for the

3

day;

(     ) Interest rate is to be adjusted on daily basis according to the base interest rate as announced by the People’s Bank for the day;

In case the base interest rate after an adjustment by the People’s Bank turns out to be a floating interest rate or cancelled base interest rate, both parties shall discuss and consult with each other as to an adjustment to the interest rate under this Contract. However, the interest rate after the adjustment shall not be lower than the then applicable interest rate. If the two parties concerned have failed to reach an agreement over the interest rate after adjustment in over                 month/months upon the date of the adjustment by the People’s Bank, the creditor has the right to announce that the loan amount under this Contract is prematurely due.

 a  USD           (foreign currency) Libor+0.5%

II. 2	Daily Interest Rate = Monthly Interest Rate / 30; Monthly Interest Rate = Annual Interest Rate / 12.
II. 3	Calculation of Interest:
II. 3. 1	Normal Interest = Interest Rate under This Contract * Loan Amount Granted * Holding Days. Holding days are calculated commencing on the date of loan and concluding on the date of obligation.
II. 3. 2	Penalty interest for overdue loan or appropriated loan is calculated on the basis of the penalty interest rate for the overdue loan or the appropriated loan, and the actual days. The penalty interest rate for the overdue loan is 50% upward of the interest rate as specified in this Contract, and that for the appropriated loan is 100% upward of the interest rate as specified in this Contract, in case of a RMB loan; and the creditor has the right to make a corresponding adjustment to the penalty interest rate under this Contract and execute the new penalty interest rate from the date of adjustment of the interest rate by the People’s Bank, in case of an adjustment to the base interest rate by the People’s Bank over the float-interest-rate-based overdue loan or appropriated loan. The penalty interest rate, in case of a foreign exchange loan, shall be calculated on the basis of 50 % upward of the interest rate as specified in this Contract
II. 4	The interest for the loan under this Contract is settled according to the 1. of the following two options, with the principal and interest to be cleared up in one operation when due. The date of settlement of the interest is the date of payment of the interest:

1.	Settlement of interest on 20th day of the last month of each quarter; or
2.	Settlement of interest on 20th day of each month.

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II. 5	Other Interest Rate Agreed On
	Besides, the lender charges the borrower 1.3% of the loan amount as a commission.

Article III Grant and Repayment of Loan

III. 1 The borrower should undergo the relevant procedure in three banking days in advance before withdrawing the loan amount. In addition, the withdrawing should be conducted in accordance with the following plan for loan grant.

Date of Grant						Amount Granted
09	(mm)/	24	(dd)/	09	(yy);	three million US dollars	(in words)
12	(mm)/	24	(dd)/	09	(yy);	three million US dollars	(in words)
03	(mm)/	24	(dd)/	10	(yy);	six million US dollars	(in words)
	(mm)/		(dd)/		(yy);		(in words)

 ** III. 2 The creditor shall have the right to refuse to grant the loan amount before all of the following conditions are satisfied:

1.	The borrower has accomplished all the legal formalities with regard to the relevant government permit, approval or registration as well as the other formalities as required by the creditor. And the said formalities concerning the government permit, approval or registration remain to be effective;
2.	The Contract on Guarantee under this Contract (if applicable) has come into effect and will continue to be effective. In case the Contract on Guarantee is the Contract on Mortgage and/or Contract on Hypothecation, the right over the pledge shall be established and continue to be effective;
3.	There has occurred no significant change so far that proves unfavorable to the business management and financial situation of the borrower;
4.	The borrower has not violated this Contract.

III. 3 The actual date of grant and the amount of loan granted shall be based on the date and the amount recorded in the ‘Certificate of Loan’.

III. 4 The borrower should pay back as scheduled the loan amount according to the due date as specified in Clause I. 4 and the following plan. Should the due date registered in the ‘Certificate of Loan’ be different from that as agreed on in this Contract, the former shall be the basis.

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Due Date						Repayment Amount
06	(mm)/	25	(dd)/	10	(yy);	three million US dollars (in words)
06	(mm)/	25	(dd)/	10	(yy);	three million US dollars (in words)
06	(mm)/	25	(dd)/	10	(yy);	six million US dollars (in words)
	(mm)/		(dd)/		(yy);	(in words)

**III. 5 The loanee is not allowed to pay back the loan amounts prematurely without the loaner’s consent.

**Article IV Statement and Pledge by the Borrower

IV. 1	The borrower is an independent civil entity legally established and legally existing with a full capacity to enjoy all the rights as entitled and a full ability to perform on his own all his obligations under this Contract and undertake for himself all his civil responsibilities as due.
IV. 2	To sign and implement this Contract is the true expression of the borrower, with all the required consent, approval and authority and with no fault that can be found legally.
IV. 3	All the documents, materials and information provided by the borrower to the creditor in the course of the signature and performance of this Contract are authentic, accurate, complete and valid, with no information hidden away that may possibly affect his financial status and repayment ability.
IV. 4	At the time of signature of this Contract, the borrower is not a stockholder of the guarantor or the ‘actual controller’ as defined in the ‘Company Law’, nor does the borrower have any plan to be a stockholder of the guarantor or the ‘actual controller’.

Article V Rights and Obligations of the Creditor

V. 1	The creditor shall have the right to recover the loan principal and the interest (inclusive of the compound interest and the penalty interest for overdue and appropriated loan), collect from the borrower the expense(s) payable, and exercise other rights as regulated by the relevant laws or specified in this Contract.
V. 2	The creditor shall keep confidential the business secret of the borrower acquired in the course of the implementation of this Contract as well as the financial and business materials and other information specified as ‘classified’ in writing by the borrower, unless otherwise regulated by law or specified in this Contract.

Article VI Obligations of the Borrower

VI. 1 The borrower should pay back the loan principal and pay the related interest under

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this Contract in accordance with the schedule, amount, and currency as specified in this Contract.

VI. 2 The borrower shall not use the loan under this Contract for any other purpose.

**VI. 3	The borrower should undertake all the expenses under the Contract, including but not limited to the notarization cost, evaluation fee, appraisal expense and registration charge.
**VI. 4	The borrower should comply with the relevant business system and operation as adopted by the creditor in the handling of loan operation, including but not limited to the assistance to the creditor in the supervision and inspection over the use of the loan and the business operation of the borrower; provide promptly all the financial statements and other data and information as requested by the creditor; and assure that the documents, materials and information provided are authentic, complete and accurate.
**VI. 5	The borrower should give the creditor at least a thirty-day written notice if any of the following applies, and should not take the following actions before the former has cleared up the loan principal and interest due under this Contract, or provided a plan for repayment of debt and a guarantee that are accepted by the creditor:

1.	Sale, disposal as a gift, lease, loan, transfer, mortgage, hypothecation or disposal in some other manner of the major property, or all of or most of the property;
2.	Major change in the business system or the organizational form of property right, including but not limited to contracting, leasing, joint business operation, corporate system reform, stock holding cooperation system reform, enterprise sale, merging (purchasing), joint venture (cooperation), branching, subsidiary formation, property right transfer, and capital reduction.

**VI. 6 The borrower should give a written notice to the creditor in seven days upon the date of the occurrence or possible occurrence of any of the following:

1.	Amendment to the articles of association; change of items for industrial and commercial registration such as business name, legal representative, location, correspondence address or business scope of enterprise; or decision of great impact on financial affairs or human resources;
2.	Scheduled application for bankruptcy, or possible application by the borrower or guarantor for bankruptcy, or bankruptcy applied for by the creditor;
3.	Involvement in some major legal action, arbitration, administrative measure, or a compulsory measure, such as property preservation, taken on the

7

principal property or the guaranty object under this Contract;

4.	Guarantee provided for a thirty party, resulting in major unfavorable impact on the financial situation or the ability to perform this Contract;
5.	Signature of a contract that is of a major impact on his business operation and financial status;
6.	Suspension of production, going out of business, dissolution of business, suspension of business to bring up to standard, cancellation of business registration or cancellation of business license on the part of the borrower or the guarantor;
7.	Illegal activity/activities found in the borrower, or the legal representative (chief) or any of the major managerial personnel of the borrower, which are in violation of the relevant laws or the relevant applicable transaction regulation;
8.	Serious frustration in business, worsening of financial situation or an instance of negative impact upon the guarantor in the normal business operation, business situation or obligation ability;
9.	Related business dealing resulted, the amount of which reaches or exceeds 10% of the net assets as recently appraised;
10.	The borrower having become or being likely to be a stockholder of the guarantor or the ‘actual controller’ as defined in the ‘Company Law’.

**VI. 7

In case the guarantee under this Contract is changing towards an unfavorable direction for the creditor, the borrower should provide promptly some other guarantee that the creditor may accept.

‘Change’ as named in this Clause includes but not limited to: merging, branching, suspension of production, going out of business, dissolution of business, suspension of business to bring up to standard, cancellation of business registration, cancellation of business license, application or being under application for bankruptcy on the part of the guarantor; major change in the business operation or financial situation of the guarantor; involvement by the guarantor in some major legal action, arbitration, administrative measure or property preservation action or other compulsory measures over his principal property; deduction or possible deduction in value of the object guaranteed or compulsory measure having been taken over the object guaranteed; breaching act or violation against the applicable transaction regulations on the part of the guarantor or his legal representative (chief) or major managerial personnel;

8

guarantor being an individual, or being missing or dead (announced dead); breaching act against provisions under the contract on guarantee; dispute occurring between the guarantor and the borrower; request by the guarantor for dissolution of the contract on guarantee; the contract on guarantee yet to be effective, or found ineffective, or cancelled; the right to the object guaranteed being not established or invalid; or other incident affecting the security of the creditor’s right of the creditor.

Article VII Other Items Agreed On

     Breach of contract:(1) asset-liability ratio is higher than 60% (asset-liability ratio = (total liabilities / total assets) * 100%); (2) interest coverage ratio is less than 6(interest coverage ratio = (depreciation + interest Pre-tax profit) / interest); (3) bank transaction volume weight ratio of our branch is less than 50% of total transaction volume, if found the ratio is less than 50% of total transaction volume, the borrower will be notified one month in advance by lender for critical action next month. If next month critical action is still failed, then the credit line will be terminated by the lender.

**Article VIII Pre-maturity of Loan

Should any of the following occur, the creditor shall have the right to suspend the grant of the unused loan amount to the borrower, announcing unilaterally partial or complete pre-maturity of the loan for the borrower under this Contract and demanding that the borrower repay all the principal due and pay off the related interest without delay:

1.	The statement and the pledge made in Article IV by the borrower are found untruthful;
2.	The borrower has violated this Contract;
3.	Any one of the circumstances listed in Clause VI. 6 as items for notice has actually occurred, which the creditor believes will affect the security of his creditor’s right;
4.	The borrower is found to have committed, in his performance of other contracts signed with the creditor, a breaching act such as delay in implementation, and has refused to rectify even though advised to do so by the creditor.

**Article IX Breach

IX. 1 The borrower, who has failed to repay in full the loan principal and pay the interest, or to use the loan according to the purpose as specified in this Contract, should pay the interest calculated on the basis of the penalty interest rate for overdue loan or the penalty interest rate for appropriated loan. In addition, the borrower should undertake the compound interest for the interest that is to be paid and yet unpaid.

9

IX. 2	The borrower, who has failed to repay in full the loan principal and pay the interest as due, should undertake the call expense, legal action charge (or arbitration charge), preservation fee, notice fee, execution fee, attorney fee, travel expense and other expenses which the creditor has paid for the realization of the creditor’s right.
IX. 3	The creditor, who believes that the borrower has avoided supervision, or has delayed in repayment of loan principal and interest, or has ill-intentionally dodged a creditor, shall have the right to report to the relevant authority on the said act and publicize it in the mass media.

**Article X Agreement on Deduction

X. 1	With the authorization by the borrower who is yet to repay the loan principal, interest, penalty interest or other expenses due, the creditor shall have the right to deduct from the balance in any of the deposit accounts of the borrower at the Bank of Communications the amount for repayment of the debt due.
X. 2	After the deduction, the creditor should inform the borrower of the account number involved in the deduction, the number of the Contract, the number of the ‘Certificate of Loan’, the amount deducted, and the balance of the debt involved.
X. 3	The deducted amount, which is found to be insufficient to pay back all the debt amount, should be used first to cover the amount due for the current installment. Should the delay in repayment for the principal and interest extend in less than 90 days, the balance after the deduction shall be used first to pay back the interest or the penalty interest or the compound interest payable before being employed to cover the principal due. Should the delay in repayment for the principal or the interest exceed 90 days, the balance after the deduction shall be used first to pay back the principal payable before being employed to cover the interest or the penalty interest or the compound interest due.
X. 4	Should the currency of the amount deducted be different from that of the debt to be paid back, the conversion rate for foreign exchange as announced by the Bank of Communications upon the date of the deduction shall be the basis.

Article XI Settlement of Dispute

Any dispute arising from this Contract should be settled by taking legal action with the court of judicial power over the area where the creditor is located. During the period of dispute, the parties concerned should continue to implement the terms that are not involved in the dispute.

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Article XII Miscellaneous

	XII. 1	The ‘Certificate of Loan’ under this Contract, and the relevant documents and materials as affirmed by the two parties concerned form an inseparable part of this Contract.
	XII. 2	This Contract comes into effect upon the signature (or seal) by the legal representatives (chiefs) or authorized representatives of both parties involved, with their respective common seals affixed thereto.
	XII. 3	This Contract is made in            copies to be held ONE copy/copies each by either of the two parties concerned, and the guarantor.
Statement:		Should any discrepancy in meaning be found between the version above and that in Chinese, the latter shall prevail.

The borrower has read all the above provisions; the
creditor has made the corresponding explanations in
response to the request by the borrower; and the borrower
has no objection to all the particulars.

Borrower (Common Seal):	Creditor (Common Seal):
[Common Seal of STATS ChipPAC Shanghai Co., Ltd.]	[Common Seal of Bank of Communications Co., Ltd.]
Legal Representative (Chief) or Authorized Representative (Signature or Seal):	Legal Representative (Chief) or Authorized Representative (Signature or Seal):
/s/ Lee Yik Choong	/s/ Ling Haiqiang
Date Signed:	Date Signed:
06 (mm)/ 30 (dd)/ 09 (yy)	06 (mm)/ 30 (dd)/ 09 (yy)

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EX-4.46

Exhibit 4.46

[On Letterhead of DBS Bank Ltd]

PRIVATE & CONFIDENTIAL

24 August 2009

Reference No: 31199/28 Vol 1

STATS ChipPAC Korea Ltd.
San 136-1 Ami-Ri Bubal-Eub
Icheon-Si Kyungki-do
467-701 South Korea

Attn: Maeng Sang Jin, Managing Director

Dear Sirs,

FACILITY COMPRISING: -
ACU SHORT TERM LOAN OF UP TO USD25,000,000

DBS Bank Ltd is pleased to offer STATS ChipPAC Korea Ltd. the following facility (“Facility”) on the terms and conditions set out in this letter and in the other agreements and/or documents specified herein (collectively the “Documents”).

1. FACILITY LIMIT

(A) UNCOMMITTED FACILITY (“ Uncommitted Facility”)

1.1 ACU Short Term Loan (“ACU STL”) USD25,000,000

2. PURPOSE

2.1 The Facility under paragraph 1.1 shall be used for general corporate purpose.

3. TERMS APPLICABLE TO ACU STL

3.1	Available Currencies
	Subject to the availability of funds, the ACU STL shall be disbursed in United States Dollars only (“Available Currency”).
3.2	Term
	The interest period (“Term”) for each drawing from the ACU STL (“Drawing” which expression also means each amount outstanding at that time) shall be of 1, 2, 3 or 6 months or any other period as agreed to by DBS Bank Ltd.

STATS ChipPAC Korea Ltd.
Reference No: 31199/28 Vol 1
24 August 2009
Page 2 of 6

[On Letterhead of DBS Bank Ltd]

3.3 Interest Rate

(a)	Interest payable to DBS Bank Ltd for each Drawing shall be 4.00% per annum above the LIBOR as determined by DBS Bank Ltd 2 Business Days prior to the Term for such Drawing.
(b)	Interest accrued on each Drawing shall be payable in arrears on the Maturity Date (hereinafter defined) pertinent to the Term applicable to that Drawing.

3.4	Drawing
	Subject to the availability of funds, each Drawing shall be in multiples of an amount equivalent to US$1,000,000 in the Available Currency requested for, and shall not be for any sum less than an amount equivalent to US$5,000,000 in the Available Currency requested for. In relation to the ACU STL, STATS ChipPAC Korea Ltd. shall give DBS Bank Ltd 3 Business Days’ written notice prior to the date of STATS ChipPAC Korea Ltd.’s proposed Drawing.
3.5	Repayment
	Each Drawing shall be repaid in full on the last day of the Term relating to such Drawing (“Maturity Date”) (unless DBS Bank Ltd agrees that it is rolled over). Provided that if such day is not a Business Day, the Maturity Date shall be the next succeeding Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

4. SECURITY

The following security is to be provided for the Facility and all other moneys, debts, obligations and liabilities (whether actual or contingent) which may be or become due, owing or payable by STATS ChipPAC Korea Ltd. to DBS Bank Ltd from time to time: -

4.1 An Unconditional and Irrevocable Corporate Guarantee from STATS ChipPAC Ltd. in such form and substance acceptable to DBS Bank Ltd.

5. SPECIAL CONDITIONS

STATS ChipPAC Korea Ltd. hereby agrees with the following: -

5.1

Financial Covenant

STATS ChipPAC Ltd. shall maintain a consolidated Debt-to-EBITDA ratio of no more than 3.0 times at all times. EBITDA shall be defined as the net profit for the year before taxes, interest, amortisation, depreciation, share of profits/losses attributable to associated companies and minority interests, extraordinary items and all other non-cash and once-off non-recurring items. Testing of this covenant

STATS ChipPAC Korea Ltd.
Reference No: 31199/28 Vol 1
24 August 2009
Page 3 of 6

[On Letterhead of DBS Bank Ltd]

	shall be on an annual basis and will be based on the fiscal consolidated financial statement of STATS ChipPAC Ltd. for that financial year (“Testing Period”).
	If since the beginning of Testing Period, STATS ChipPAC Ltd. and/or any of its subsidiaries were to have made an investment or acquisition which enables the investment to become a subsidiary of the STATS ChipPAC Ltd. Group, the EBITDA and interest expenses for the Testing Period shall be calculated after giving their proforma effect upon consolidation, including the incurrence of any indebtedness, as if the investment or acquisition occurred on the first day of the Testing Period.
5.2	Shareholding
	STATS ChipPAC Korea Ltd. shall remain a wholly owned subsidiary of STATS ChipPAC Ltd. at all times.
5.3	Operating Account

(a)	STATS ChipPAC Korea Ltd. shall open and maintain an operating USD current account with DBS Bank Seoul Branch and route a commensurable amount of business to DBS Bank Ltd, including DBS Bank Seoul Branch.
(b)	STATS ChipPAC Ltd. shall continue to maintain all operating accounts that have been opened with DBS Bank Ltd and route a commensurable amount of business to DBS Bank Ltd.

5.4	Negative Pledge
	Unless approved by DBS Bank Ltd in writing, STATS ChipPAC Korea Ltd. will not and will ensure that none of its subsidiaries will create or permit to arise or subsist any debenture, mortgage, charge (whether fixed or floating), pledge, lien or any other encumbrance whatsoever or any other agreement or arrangement having substantially the same effect on its assets or factor any of its accounts receivables, save for the existing pledge on land and building provided for the existing facility granted by Hana Bank and up to US$50million for future finance leases.
5.5	Right of Review
	DBS Bank Ltd reserves the right to review the Facility from time to time. Upon such review, DBS Bank Ltd will have the right at its sole discretion, notwithstanding any inconsistent provision in this letter or any other document, to immediately cancel, reduce or vary the Facility and all further utilization of the Facility and/or to demand immediate repayment of all moneys and liabilities owing to DBS Bank Ltd under the Facility (whether actual or contingent).

STATS ChipPAC Korea Ltd.
Reference No: 31199/28 Vol 1
24 August 2009
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[On Letterhead of DBS Bank Ltd]

6. DOCUMENTATION & AVAILABILITY

Subject to the terms and conditions of this facility letter and to DBS Bank Ltd’s discretion to permit otherwise, the Facility will become available for utilisation only after:-

6.1 DBS Bank Ltd has received and found satisfactory: -

(a)	certified copies of STATS ChipPAC Korea Ltd.’s Certificate of Incorporation and By-Laws or such other equivalent constitutive document together with 2 certified true copies of STATS ChipPAC Korea Ltd.’s Board of Directors’ resolution (assuming the Certificate of Incorporation and By-Laws do not require any other corporate actions) (specimen attached) in form and substance satisfactory to DBS Bank Ltd;
(b)	certificate as to the incumbency and true signature of the officer executing the facility letter, signed by STATS ChipPAC Korea Ltd.’s secretary or assistant secretary (if applicable);
(c)	a legal opinion, in form and substance acceptable to DBS Bank Ltd, issued by a legal counsel practising in the Republic of Korea stating that STATS ChipPAC Korea Ltd. has the capacity to engage in the transactions contemplated by this facility letter and that the same is valid, binding and enforceable against STATS ChipPAC Korea Ltd. in accordance with its respective terms. Please see Appendix A for the issues which DBS Bank Ltd would like the legal opinion to address;
(d)	evidence that STATS ChipPAC Korea Ltd. has appointed STATS ChipPAC Ltd. as a process agent in Singapore to receive service of process;
(e)	a copy of the STATS ChipPAC Ltd.’s Certificate of Incorporation or such other equivalent document, and the Memorandum and Articles of Association together with copies of STATS ChipPAC Ltd.’s Board of Directors’ resolution (specimen attached) in form and substance satisfactory to DBS Bank Ltd, all certified as true copies by its Director and Company Secretary;
(f)	all security documentation relating to the securities (if any) created in DBS Bank Ltd’s favour mentioned in paragraph 4 above and that (where necessary) the particulars of charge are filed with the Accounting & Corporate Regulatory Authority (“ACRA”) in accordance with the provisions of the Companies Act (Cap 50);
(g)	where applicable, certified copies of any consents, licenses, approvals or authorisations of any government or supervising authority bureau, agency or institution required in connection with the Facility or otherwise in connection with the matters contemplated by the Documents; and
(h)	such other documentation (whether legal, security or otherwise), conditions precedent or the confirmation of the fulfilment of such other requirements as may be required by DBS Bank Ltd from time to time.

STATS ChipPAC Korea Ltd.
Reference No: 31199/28 Vol 1
24 August 2009
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[On Letterhead of DBS Bank Ltd]

6.2 DBS Bank Ltd is satisfied that there is no material and adverse change in the business, assets, financial condition, operations or management of STATS ChipPAC Korea Ltd., STATS ChipPAC Ltd. or any person providing any security required in this facility letter.

7. STANDARD TERMS AND CONDITIONS

7.1	The Facility as mentioned in paragraph 1.1 shall be subject to the terms and conditions contained in the Standard Terms and Conditions attached hereto (“Standard Conditions”) which shall form an integral part of this facility letter.
7.2	If there is any conflict or inconsistency between the terms and conditions set out in this facility letter and those contained in the Standard Conditions, the terms and conditions in this facility letter shall prevail.

Please confirm that there is no material and adverse change in the business, assets, financial condition, operations or management of STATS ChipPAC Korea Ltd., STATS ChipPAC Ltd. or any other person providing any security required in this facility letter.

Please indicate STATS ChipPAC Korea Ltd.’s acceptance of the above terms and conditions of this offer by signing and returning to DBS Bank Ltd the duplicate of this facility letter together with 2 copies of the certified true extract of STATS ChipPAC Korea Ltd.’s board resolution (specimen attached) within 30 days from the date of this facility letter, after which date this offer shall lapse, unless otherwise extended by DBS Bank Ltd.

DBS Bank Ltd is pleased to be of service to STATS ChipPAC Korea Ltd. and looks forward to a mutually beneficial relationship.

Yours faithfully

/s/ Audrey Koh
AUDREY KOH (MS)
SENIOR VICE PRESIDENT
INSTITUTIONAL BANKING GROUP
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY

STATS ChipPAC Korea Ltd.
Reference No: 31199/28 Vol 1
24 August 2009
Page 6 of 6

[On Letterhead of DBS Bank Ltd]

ACCEPTANCE

STATS ChipPAC Korea Ltd. hereby accepts the above offer of the Facility on the terms and conditions, as stated in the facility letter dated 24 August 2009 reference number: 31199/28 Vol 1 and in the other Documents referred to therein.

STATS ChipPAC Korea Ltd. encloses herewith 2 copies of the certified true extract of its board resolution accepting the above offer and the said terms and conditions.

STATS ChipPAC Korea Ltd. confirms that there is no material and adverse change in the business, assets, financial condition, operations or management of STATS ChipPAC Korea Ltd., STATS ChipPAC Ltd. or any other person providing any security required in the facility letter.

For and on behalf of
STATS ChipPAC Korea Ltd.

/s/ Maeng SangJin

Authorised Signatory(ies)
Name(s): Maeng SangJin
Date: 4 September 2009

CONFIRMATION BY GUARANTOR

STATS ChipPAC Ltd. hereby confirms that it agrees to stand as guarantor for all monies and liabilities incurred by STATS ChipPAC Korea Ltd. under the terms and conditions stated in this facility letter dated 24 August 2009 reference number: 31199/28 Vol 1 and the standard terms and conditions attached thereto.

STATS ChipPAC Ltd. further agrees to maintain at all times, the terms, conditions and covenants as stated in paragraph 5 of the facility letter.

For and on behalf of
STATS ChipPAC Ltd.

/s/ Tan Lay Koon

Authorised Signatory(ies)
Name(s): Tan Lay Koon
Date: 4 September 2009

[SPECIMEN]
To be Typed on the Letter-Head
STATS ChipPAC Korea Limited
(Incorporated in the Republic of Korea)
Extract of Directors’ Resolutions in writing pursuant to the Articles of Association of the Company passed
on the          day of                    2009

ACCEPTANCE OF BANKING FACILITIES

WHEREAS:

A.	DBS Bank Ltd. (the “Bank”) has offered STATS ChipPAC Korea Limited (the “Company”) banking facilities described in the resolutions below as more fully set out in the Bank’s letter dated 24 August 2009, reference number: 31199/28 Vol 1 (the “Facility Letter”).
B.	Each of the Directors confirmed that he had been given and understands the contents of the Facility Letter and the other Documents referred to therein; and
C.	Each of the Directors confirmed that he had disclosed all his interests in the subject of the meeting.

RESOLVED THAT:

(1)	The Company be and is hereby authorised to accept the offer of banking facilities (the “Facilities”) from DBS Bank Ltd. (the “Bank”) on the terms and conditions enumerated in the Bank’s letter dated 24 August 2009, reference number: 31199/28 Vol 1 (the “Facility Letter”) and the Documents referred to therein (as each may be amended, varied, supplemented and/or replaced from time to time).
(2)	Any [insert a number] of the following persons (collectively “Authorised Signatories”) be the persons authorised and empowered to do the following things in the Company’s name or otherwise on behalf of the Company (which persons are and will be so authorised until the Bank receives a certified copy of the board resolution of the Company providing otherwise):

Name of Authorised Signatories Specimen signature

(i)

to negotiate, sign, execute and deliver to the Bank the Facility Letter, the Documents and any letters, agreements, acceptances, forms, notices or other documents required by the Bank in relation to the Facilities, the Facility Letter, the Documents, and any securities, guarantees, collaterals and/or supports furnished or to be furnished by the Company to secure the liabilities and obligations of the Company to the Bank thereunder, or any matter, transaction or dealing whatsoever with the Bank howsoever arising; and

(ii)

to accept any future amendment, variation, supplement, replacement, renewal, extension or increase of the Facilities and/or the arrangements and any future amendment, variation, supplement or replacement of or to the Facility Letter or any Document (each of which acceptance shall be conclusively evidenced by the signature(s) of the Authorised Signatory(ies)) and to provide and execute additional securities, guarantees, collaterals and/or supports.

(3) The Seal of the Representative Director of the Company be affixed to any deeds, instruments or documents as may be required in connection with or in relation to the Facilities, the collaterals and/or supports, in accordance with the Articles of Incorporation of the Company.

CERTIFIED TRUE COPY

Representative Director [          ]

Director [          ]

Director [          ]

Director [          ]

[SPECIMEN]
To be Typed on the Letter-Head
Stats ChipPAC Limited
(Incorporated in the Republic of Singapore)

Extract of Directors’ Resolutions in writing pursuant to the Articles of Association of the Company passed
on the          day of                    2009

ISSUANCE OF CORPORATE GUARANTEE

RESOLVED THAT:

(1)

The Company hereby agrees to stand as guarantor for payment of all monies and liabilities owing by STATS ChipPAC Korea Limited (“Borrower”) to DBS Bank Ltd (the “Bank”) including but not limited to payment of all monies owing or payable (whether actual or contingent) to the Bank under the banking facilities extended by the Bank under all the terms and conditions enumerated in the Bank’s letter dated 24 August 2009, reference number: 31199/28 Vol 1 (“Offer Letter”) to the Borrower (as the same may be amended, varied, supplemented or replaced from time to time), and agrees to execute a guarantee (“Guarantee”) pursuant thereto.

(2)

Any [insert a number] of the following persons (“Authorised Signatories”), namely:

Name of Authorised Signatories Specimen signature

	be authorised and empowered to sign or execute the Guarantee and any other notices, letters, agreements and/or documents required by the Bank to be signed under hand, as may be necessary pursuant to or in connection with the Guarantee.
	The above list of Authorised Signatories be the persons authorised to sign and act on behalf of the Company which list will remain in force until the Bank receives a certified copy of the board resolution of the Company amending the list of Authorised Signatories.
(3)	The Company is solvent and it is in the interests of and for the commercial benefit of the Company to undertake the obligations to be undertaken by it under the Guarantee, and to execute the Guarantee.
(4)	The Common Seal of the Company be affixed to the Guarantee and any other letters, deeds or documents as may be required by the Bank in connection with the Guarantee, in accordance with the Articles of Association of the Company.

CERTIFIED TRUE COPY

Chairman/Director

Secretary/Director

Appendix A

An opinion of counsel of STATS ChipPAC Korea Limited (“Borrower”) stating that:-

(a) The Borrower is a body corporate duly established and validly existing under the laws of the country of incorporation and has full corporate and legal power and right to make and perform its obligations under:

(i)	the facility letter dated 24 August 2009; and
(ii)	all other documents and agreements ancillary or incidental to any of the above,

	(all of the above documents and agreements collectively the “Documents”), and when signed or executed and delivered by your Company, each of the Documents will constitute valid and binding obligations of your Company enforceable in accordance with its terms[, subject, as to enforcement to the general laws of bankruptcy in the Republic of Korea relating to or affecting creditor’s rights].
(b)	The execution, delivery and performance of the Documents by the Borrower do not constitute a contravention or breach of, or default under, the provisions of any applicable law or regulation or of the Borrower’s Certificate of Incorporation or By-Laws or constitution or of any agreement to which the Borrower is a party or by which the Borrower]or its property or assets may be bound.
(c)	The execution, delivery and performance of the Documents do not require any authorisation, consent, exemption, licence, approval of, notice to or filing or registration with, any Exchange Control Authority, governmental or supervisory authority or body or payment of any stamp or other revenue tax as a condition to or in connection with the validity of, for the execution and delivery of, any of the Documents, any Transaction or any Confirmation, or to the performance by the Borrower of its obligations thereunder; where such are required such have been obtained and are in full force and effect (duly certified copies to be attached to the opinion).
(d)	No action, suit, litigation, arbitration or other proceeding is to the best of counsel’s knowledge having made due investigation threatened or pending against the Borrower or any of its subsidiaries or its assets before any court, tribunal or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which might materially and adversely affect the Borrower’s ability to perform its obligations and comply with under any of the Documents or which in any manner question the validity of any of the Documents nor can the threat of actions, suits or proceedings materially and adversely affect the ability of the Borrower to so perform or comply.
(e)	The choice of the laws of Singapore to govern the duties and obligations of the Borrower under the Documents is valid under the laws of the Republic of Korea and would be given effect to by the Courts of the Republic of Korea.
(f)	The provision in the Documents whereby the Borrower submits to the jurisdiction of the Singapore courts is valid and binding on the Borrower under the laws of the Republic of Korea and if any final judgment for a fixed and defined sum of the Singapore courts were rendered against the Borrower with respect to any of the Documents, such judgment would be recognised and enforced by the Courts of the Republic of Korea.
(g)	It is not necessary in order to ensure the legality, validity, enforceability or admissibility in evidence of any of the Documents in the Republic of Korea that it or any other document be notarised or be filed, recorded, registered or enrolled with any court or authority in the Republic of Korea.

[On Letterhead of DBS Bank Ltd]

Standard Terms And Conditions
Governing Banking Facilities (“Facilities”) Granted by
DBS Bank Ltd (“DBS Bank”)
(“Standard Conditions”)

A. GENERAL TERMS AND CONDITIONS

1. Undertakings

a)	Obligations to rank Pari-passu: The customer will ensure that its obligations under the facility documents are unconditional and unsubordinated and will at all times rank at least pari passu with all its other unsecured and unsubordinated obligations (except for such obligations mandatorily preferred by law).
b)	Negative pledge: The customer will not and will ensure that none of its subsidiaries will create or permit to arise or subsist any debenture, mortgage, charge (whether fixed or floating), pledge, lien or any other encumbrance whatsoever or any other agreement or arrangement having substantially the same effect on its assets or factor any of its accounts receivables.
c)	Restrictions on disposals: The customer will ensure that (i) it will not lease, let out or sub-let any of the assets charged to DBS Bank as security; and (ii) it or its subsidiaries will not sell, transfer, lease out, lend or otherwise dispose of all or substantially all of its respective assets or any part of such assets which, either alone or when aggregated with all other disposals required to be taken into account under this Paragraph, is substantial in relation to its respective assets, or those of itself and its subsidiaries taken as a whole, or the disposal of which (either alone or when so aggregated) could have a material or adverse effect on it.
d)	Furnishing of Information: The customer will deliver to DBS Bank (i) certified true copies of its and each security provider’s respective annual audited and (if applicable) consolidated financial statements as soon as available, but not later than 180 days after the end of each financial year; (ii) certified true copies of its and each security provider’s respective management reports, comprising at least of its unaudited balance sheet and profit and loss statement for and as at the end of each quarter, as soon as available but not later than 90 days after the end of each quarter; and (iii) promptly, any other information, certifications, confirmations and/or documents as DBS Bank may from time to time require.
e)	Nature of business/ Changes in Memorandum and Articles of Association: The customer will not substantially alter the nature of its business or amend or alter any provision in its Memorandum and Articles of Association relating to its borrowing powers and principal business activities.
f)	Notice of default: The customer will notify DBS Bank promptly of the occurrence of any Termination Event or Potential Termination Event or any other event which might affect its ability to perform its obligations under or in connection with the facility documents to which it is a party.
g)	Re-organisation: The customer will not undertake or permit any re-organisation, amalgamation, reconstruction, take-over or any other schemes of compromise or arrangement affecting its present constitution without the prior written consent of DBS Bank, such consent not to be unreasonably withheld.
h)	Positive Networth: The customer will maintain a positive networth at all times.
i)	Costs and expenses: The customer will pay to DBS Bank on demand on a full indemnity basis, all reasonable costs and expenses, legal or otherwise in connection with the preparation, negotiation, execution, perfection of the facility documents, the preservation or enforcement or attempted preservation or enforcement of the facility documents or otherwise in connection with the facility documents, any security created thereunder or the Facilities or in connection with dealing with any third party claim or order against the customer’s account with DBS Bank (including abortive costs and expenses). All such payments shall be paid in the currencies in which such costs and expenses were incurred. If DBS Bank in its reasonable discretion pays any insurance premia, legal fees, stamp duty, valuation fees, governmental or statutory levies and taxes and other costs, expenses or other moneys whatsoever on default of such payment by the customer, the customer shall forthwith on demand repay the same to DBS Bank together with interest thereon at the rate(s) referred to in Paragraph A6 below calculated from the date of payment thereof by DBS Bank up to the date of repayment by the customer. The customer will also pay DBS Bank on demand all reasonable broken funding costs for any advances prepaid, any advances requested for but not made, unwinding costs for foreign exchange, or any derivative transactions terminated before the contracted maturity date, and such amounts as DBS Bank may certify as sufficient to indemnify DBS Bank in respect of the cost or loss incurred by DBS Bank resulting from such prepayment or termination.

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[On Letterhead of DBS Bank Ltd]

2.	Confirmation of Advance DBS Bank may, but shall not be obliged to, send to the customer a confirmation in respect of any of the Facilities. Such confirmation shall be conclusive and binding on the customer unless the customer objects in writing thereto within 14 days of the date of such confirmation.
3.	Utilisation in Other Currencies DBS Bank may, in its sole discretion, allow utilisation of the Facilities in currencies other than that provided for in the facility letter (“Other Currencies”). If utilisation is allowed in Other Currencies, the level of utilisation at any time will be determined by DBS Bank based on such rate(s) of exchange as DBS Bank may deem appropriate. If the level of utilisation thus determined exceeds the limit determined by DBS Bank, the customer will, upon notice and within such period as DBS Bank may determine, reduce the level of utilisation to such limits or provide additional collateral in cash such that the level of utilisation does not exceed the aggregate of such limits and the amount of cash provided as additional collateral.
4.	Application of Advance Notwithstanding any other provision of the facility documents, if on any date an amount (“first amount”) is to be advanced by DBS Bank under the facility documents and an amount (“second amount”) is due from the customer to DBS Bank under the facility documents, DBS Bank shall apply the first amount in or towards payment of the second amount. DBS Bank shall remain obliged to advance any excess (or, as the case may be, the customer shall remain obliged to pay any shortfall) in accordance with this Paragraph.
5.	Interest All interest on the Facilities (including default interest) shall be calculated on a daily basis, based on the number of days elapsed, with monthly rests or such other periodic rests as DBS Bank may prescribe and based on a 365-day year (if the amount payable is in Singapore Dollars), and on a 360-day year (if the amount payable is in any foreign currency).
6.	Default Interest Upon any default in payment of any Total Indebtedness, or any sum payable under this Paragraph and Paragraph A(1)(i) above, interest shall be payable on such overdue amounts from the due date until the date of payment (as well after as before judgement) at the rate of 3% per annum above the applicable rate of interest or at such other rates determined by DBS Bank for such periods as DBS Bank may from time to time select. Unless otherwise stated, interest on such overdue amounts shall be due and payable immediately on demand by DBS Bank but if not previously demanded, shall be paid at the end of each month or period determined by DBS Bank. DBS Bank also reserves the right to charge any excess overdraft utilisation at a rate to be determined by DBS Bank.
7.	Authority to Debit and Set-off Accounts

a)	The customer irrevocably authorises DBS Bank to debit its accounts with DBS Bank (whether in Singapore or elsewhere and whether alone or jointly or jointly with any other person) at any time and without any notice to the customer for the Total Indebtedness Provided always that any such debiting shall not be deemed to be a payment of any moneys to which it relates except to the extent of any amount in credit in that account.
b)	DBS Bank shall be entitled at any time, without notice to the customer, to combine all or any of the customer’s liabilities to or accounts with DBS Bank (whether alone or jointly or jointly with any other person) and set-off, transfer or apply any obligations of DBS Bank to the customer in or towards satisfaction of any obligations of the customer to DBS Bank, whether the obligations of the customer or DBS Bank are actual or contingent, primary or collateral, several or joint, booked or payable at different branches (including branches outside Singapore), or in different currencies.
c)	For the purposes of this paragraph A(7), DBS Bank is authorised to effect any necessary currency conversions at DBS Bank’s own rate of exchange then prevailing. If the amount of an obligation is unascertained, DBS Bank may estimate that amount and set-off or debit in respect of the estimate, subject to a final settlement being made between the customer and DBS Bank when the amount of the obligation is ascertained. The foregoing shall be without prejudice and in addition to any rights of set-off, combination of accounts, lien, security or other right to which DBS Bank is at any time otherwise entitled (whether by operation of law, contract or otherwise).

8. Rights Cumulative and No Waivers DBS Bank’s rights under the facility documents are cumulative, may be exercised as often as it considers appropriate and are in addition to its rights under general law. No failure or delay by DBS Bank in exercising any right, power or privilege hereunder shall operate as a waiver hereof. No defective or partial exercise of any rights, power or privilege shall preclude any other or further exercise of that or any other right and no course of conduct or negotiation on DBS Bank’s part shall preclude DBS Bank from exercising any such right or constitute a suspension, variation or waiver of any such right. Any waiver or variation of DBS Bank’s rights shall only be effective against DBS Bank if it is an express waiver or variation in writing.

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[On Letterhead of DBS Bank Ltd]

9.	Rights Binding on Customer The rights given to DBS Bank in the facility documents shall be binding on the customer and its successors and shall not be determined or in any way prejudiced or affected by (i) any liquidation (whether compulsory or voluntary) affecting the customer or any security provider or any change in the customer’s or security provider’s constitution whether by way of amalgamation, consolidation, reconstruction or otherwise, or (ii) any change in DBS Bank’s constitution whether by way of amalgamation, consolidation, reconstruction or otherwise, or (iii) any death, bankruptcy, insanity or other disability affecting any security provider.
10.	Assignment and Transfer The customer may not assign or transfer any rights or obligations under any facility document(s) without DBS Bank’s prior written consent. DBS Bank may make the Facilities available and receive the benefit of any payment due to it through any of its offices and may at any time without the consent of and without notice to the customer or any other person assign or transfer all or any part of its benefits, rights and/or obligations under any facility document to any person as DBS Bank shall in its absolute discretion think fit. Any such assignee or transferee shall be entitled to the full benefit of such rights and/or obligations as if it were DBS Bank in respect of the rights or obligations assigned or transferred to it.
11.	Additional Security to Guarantee If the Facilities are, inter alia, secured by a guarantee, DBS Bank has the right to review the guarantee and to call for additional security if in its opinion, the guarantor(s) are or will be unable to perform their obligations in full under the guarantee.
12.	Special Consultant If DBS Bank determines that the customer is or will be unable to perform its obligations under any of the facility documents, DBS Bank may appoint on the customer’s behalf or require the customer to appoint a Special Consultant to conduct an audit of the customer or perform such other duties as DBS Bank may specify. DBS Bank may nominate any person whom DBS Bank considers suitably qualified to be the Special Consultant (including without limitation an accountant, lawyer, banker or engineer). A Special Consultant so appointed shall be the agent of the customer who shall be solely responsible for the Special Consultant’s acts, defaults and remuneration.
13.	Material and Adverse Change affecting Foreign Currency If by reason of any material and adverse change in the international financial and capital markets, or any material and adverse change in national or international financial political or economic conditions or any currency availability or exchange rates or control, the foreign currency requested for by the customer under the Facilities is unavailable to DBS Bank, the customer’s request for such foreign currency shall (upon DBS Bank’s notification to the customer of the unavailability) be deemed to be withdrawn and the customer may request for an alternative foreign currency subject to the terms of the facility letter and to availability.
14.	Severability The illegality, invalidity or unenforceability of any provision or part thereof of the facility documents under the law of any jurisdiction shall not affect or impair the validity, legality and enforceability of any other provision or part of the provision and the remaining provisions of the facility documents shall be construed as if such invalid, unlawful or unenforceable provision or part thereof had never been contained in the facility documents.
15.	Consent to Disclosure DBS Bank and its officers or agents may disclose any information (“Information”) in connection with the customer or its account or the Facilities to any person to whom such disclosure is permitted or required under any law (including the Banking Act (Cap. 19)) or pursuant to any court order. DBS Bank and any of its officers or agents may also disclose Information to (a) any security provider; (b) any person in connection with a Transfer or proposed Transfer; (c) any person for the purposes of enforcing or protecting its rights or interests in relation to the Facilities; (d) any person in connection with any insolvency proceeding (including judicial management, winding-up, compromise or arrangement, and receivership) relating to the customer or any other person in connection with the Facilities; and (e) to the Commissioner of Stamp Duties and any other government department, agency or statutory board if this is necessary or desirable in connection with the Facilities (in DBS Bank’s opinion). In sub-paragraph (b) above, a “Transfer” includes any assignment or transfer of any of DBS Bank’s rights or obligations, any participation, sub-participation, transfer of credit or other risk (entirely or in part) or benefit (entirely or in part) by any means, and entry into any other contractual relationship, in relation to the Facilities. DBS Bank and any of its officers or agents may also disclose Information in connection with the promotion to any customer of DBS Bank of financial products and services offered by any financial institution in Singapore or elsewhere or by any corporation within the DBS Group of companies (“DBS Group of companies” means DBS Group Holdings Ltd and its subsidiaries, direct or indirect).
16.	Currency Indemnity If DBS Bank receives or recovers any sum due to it from the customer in a currency (the “Relevant Currency”) other than the currency in which such sum is due (the “Currency of Account”) (whether as a result of, or arising from the enforcement of, a judgement or order of a court or tribunal of any jurisdiction, or in the bankruptcy or dissolution of the customer or otherwise) this shall only discharge the customer to the extent of the amount in the Currency of Account which DBS Bank is able, in accordance with its usual practice, to exchange or purchase with the amount of the Relevant Currency so received or recovered on the date of receipt or recovery (or, if it is not practicable to make that exchange or purchase on that date, on the first date on which it is practicable to do so). If that amount in the Currency of Account is less than the amount of the Currency of Account due to DBS Bank, the customer shall indemnify DBS Bank against any loss sustained by it as a result. In any event, the customer shall indemnify DBS Bank against the cost of making any such exchange or purchase.

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[On Letterhead of DBS Bank Ltd]

17.

Further Act or Assurance The customer will, and will procure that each security provider, entirely at its own expense and as soon as practicable after written demand by DBS Bank make, execute, do and perform, or cause to be made, executed, done and performed, all such further acts, agreements, deeds, and documents of whatsoever nature as DBS Bank shall reasonably require to reflect or perfect the agreement or any security created or intended to be created pursuant to the terms of the facility letter or any other document or otherwise howsoever arising or relating to the Facilities.

18.

Taxes

(a)

The customer will pay all goods and services tax and all other levies and taxes now or hereafter imposed by law on any payment under the facility documents and indemnify DBS Bank against such payment. DBS Bank shall have the right to debit the same from the customer’s account(s).

(b)

The customer shall ensure that all amounts payable by the customer shall be paid free and clear of any deduction or withholding tax. If the customer is required by law to make any such deduction or withholding, the customer shall pay to DBS Bank additional amounts to ensure that DBS Bank receives a net amount equal to the full amount which DBS Bank would have received if no such deduction or withholding had been made.

19.	Statement/Certificate A statement or certificate in writing issued by DBS Bank or signed by any authorised officer of DBS Bank (including any computer generated statement or certificate) certifying any sum payable to it or any other certificate, determination or opinion of DBS Bank under the Facilities or the facility documents shall (in the absence of manifest error) be final and conclusive and binding upon the customer. The entries in the accounts which DBS Bank maintains in accordance with its usual practice shall be prima facie evidence of the existence and amounts of the obligations of the customer recorded in them.
20.	Third Parties A person who is not a party to the facility letter has no right under The Contracts (Rights of Third Parties) Act, Chapter 53B to enforce or to enjoy the benefit of any term and conditions of the facility letter and, notwithstanding any term of the facility letter, the consent of any third party is not required for any variation (including any release or compromise of any liability) or termination of the facility letter.
21.	Governing Law and Jurisdiction The facility letter shall be governed by and construed in accordance with the laws of Singapore. The customer irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Singapore to hear and determine any suit, action or proceeding, and to settle any dispute which may arise out of or in connection with the facility documents, waives any objection which the customer may have at any time to such courts being nominated as the forum to hear and determine any proceedings and agrees not to claim that any court is not a convenient or appropriate forum. Nothing in this Paragraph shall limit the right of DBS Bank to take proceedings against the customer in any other court of competent jurisdiction nor shall the taking of proceedings in one or more jurisdictions preclude DBS Bank from taking proceedings in any other jurisdiction, whether concurrently or not.
22.	Notices Unless otherwise agreed, all notices, statements, confirmations and correspondences to the customer shall be sent by post or left at the registered office or principal place of business or address in the records of DBS Bank, or if sent by fax, to the numbers in the records of DBS Bank, and shall be deemed to have been received by the customer on the date following such posting, or on the day when it was so left, or upon despatch of such fax.
23.	Service of Process Where the customer has not given an address within Singapore for service of any writ of summons or other legal process (“service of process”), and where the customer is resident or incorporated or registered or has a place of business in Singapore, the service of process may be effected on the customer by sending it by hand or by registered post to the customer’s last known registered office, or last known place of business in Singapore, and such service of process shall be deemed to be good and effectual service on the customer notwithstanding that it is returned by the post office undelivered. Where the customer is not resident nor incorporated nor registered in Singapore, the customer shall from time to time notify DBS Bank in writing of its registered office or the principal place of business in Singapore or other address in Singapore for service of process and agrees that DBS Bank may serve any writ of summons or other legal process on it by sending the same by hand or by registered post to such address within Singapore and such service shall be deemed to be good and effectual service on the customer notwithstanding that it is returned by the post office undelivered. Nothing shall affect DBS Bank’s right to serve process in any other manner permitted under any applicable law.
24.	Termination Events

(1)	Without prejudice to any other terms in the facility documents (including without limitation, DBS Bank’s right of review and DBS Bank’s right to demand immediate repayment of any Facility which is repayable on demand), if any one or more of the following events (each a “Termination Event”) should occur:-
a)	Failure to Pay: Any party to the facility documents (other than DBS Bank) does not pay any amount due by it under any of the facility documents to which it is a party on the due date or on demand if so payable;

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[On Letterhead of DBS Bank Ltd]

b)	Other Breach: Any representation, warranty, undertaking, declaration or statement by the customer or any security provider in any of the facility documents or in any document delivered thereunder is not complied with or is or proves to have been incorrect or untrue in any respect when made or deemed repeated or the customer or any security provider does not perform or comply with any of the provisions under any of the facility documents to which it is a party;
c)	Cross Default: Any financial indebtedness of the customer or any security provider or any of the customer’s subsidiaries or the customer’s holding company (to whomsoever owing) is not paid when due, or is or is declared to be or is capable of being declared due and payable before its normal maturity or if the customer defaults under any foreign exchange or foreign exchange options transactions (or other similar transactions), or any derivative transactions with any other parties;
d)	Invalidity, Repudiation and Illegality: Any provision of any of the facility documents is or becomes, or is claimed by the customer or any security provider to be, for any reason invalid or unenforceable; or it is or will become unlawful for the customer or any security provider to perform or comply with any of its obligations under any of the facility documents to which it is a party;
e)	Cessation of Business/Expropriation/Compulsory Acquisition: The customer or any security provider or any of the customer’s subsidiaries or the customer’s holding company changes or threatens to change the nature or scope of its businesses, ceases or suspends or threatens to cease or suspend all or a substantial part of its business operations or any governmental or other authority takes any step to expropriate, nationalise or compulsorily acquire all or a substantial part of its assets or share capital;
f)	Execution: Any security on or over any part of the assets of the customer or any security provider or any of the customer’s subsidiaries or the customer’s holding company becomes enforceable or a distress, attachment, writ of seizure and sale, garnishee order, injunction or any form of execution is levied or enforced upon or issued against any such assets;
g)	Insolvency and Moratorium: The customer or any security provider or any of the customer’s subsidiaries or the customer’s holding company is insolvent or unable to pay its debts, stops, suspends or threatens to stop or suspend payment of all or a material part of (or of a particular type of) its indebtedness, begins negotiations or takes any other step with a view to deferring, rescheduling or readjusting all or a material part of (or a particular type of) its indebtedness (or of any part of its respective indebtedness which it will or might otherwise be unable to pay when due), proposes or makes a general assignment or an arrangement or composition with or for the benefit of its creditors, or a moratorium is agreed or declared in respect of or affecting all or a material part of (or of a particular type of) its indebtedness;
h)	Winding-up: Any step is taken by any person with a view to the bankruptcy, liquidation, winding up or dissolution of the customer or any security provider or any of the customer’s subsidiaries or the customer’s holding company or for the appointment of a liquidator (including a provisional liquidator), receiver and/or manager, judicial manager, trustee, administrator, agent or similar officer of the customer or any security provider or any of the customer’s subsidiaries or the customer’s holding company or over any part of its assets;
i)	Material or Adverse Change: Any event or change or series of events or changes occurs which, in DBS Bank’s opinion, might have a material or adverse effect on the business or financial condition of the customer or any security provider or any of the customer’s subsidiaries or the customer’s holding company or a material or adverse effect on the ability of the customer or any security provider or any of the customer’s subsidiaries or the customer’s holding company to perform its obligations under the facility documents;
j)	Management Authority: The customer’s present management is wholly or substantially displaced or has its authority curtailed;
k)	Security in Jeopardy: Any Security is in the opinion of DBS Bank in jeopardy and notice thereof has been given to the customer or such security provider;
l)	Incapacity of any security provider: Any step is taken for obtaining an interim order in respect of any security provider under the Bankruptcy Act (Cap. 20), or if any application is made or petition presented pursuant to any applicable statute or regulation for a bankruptcy order against any security provider, or if there is any death, insanity or disability of any security provider;

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m)	Declared Company: The customer or any security provider is declared by the Minister to be a declared company under the provisions of Part IX of the Companies Act (Cap. 50),
	DBS Bank may by notice in writing to the customer declare the Total Indebtedness to be immediately due and payable to DBS Bank, whereupon it shall become so due and payable.
(2)	Upon the notice referred to in Paragraph A24(1) above being given to the customer:-
(i)	DBS Bank shall be entitled to exercise forthwith all or any rights, powers or remedies under the Securities (if any) without any restriction whatsoever imposed by Section 25 of the Conveyancing and Law of Property Act (Cap. 61) and the provisions of that Section 25 shall be so varied and extended in their application to the Securities so that all the statutory powers may be exercised in accordance with the provisions of this sub-Paragraph;
(ii)	any Facility which has not been drawn-down, utilised or cancelled shall automatically be cancelled and forthwith cease;
(iii)	any sum repaid to DBS Bank by the customer shall be applied at DBS Bank’s sole discretion towards the settlement and discharge of the customer’s liabilities and obligations on any account;
(iv)	the customer shall without demand immediately procure the complete and unconditional release of DBS Bank from all its liabilities and obligations (whether contingent or otherwise) and including without limitation, all of DBS Bank’s liabilities and obligations under all notes and bills accepted, endorsed or discounted by and all Letters of Guarantee and documentary credits entered into or issued by DBS Bank for the customer’s account or at the customer’s request failing which the customer shall without demand immediately pay to DBS Bank such sums as may be necessary to be paid to the beneficiaries or any other persons whatsoever under or in relation to the said notes, bills, Letters of Guarantee and documentary credits in order for DBS Bank to obtain such release together with all costs and expenses incurred or which may be incurred by DBS Bank in respect thereof; and
(v)	the customer shall provide cash cover for all contingent liabilities and for all notes and bills accepted endorsed or discounted by and Letters of Guarantee and documentary credits entered into or issued by DBS Bank for the customer’s account or at the customer’s request.

B. DEFINITIONS AND INTERPRETATION

1.	Unless the context requires otherwise, the following expressions appearing in these Standard Conditions shall have the following meanings :-
	“Agent Bank” means the bank in which DBS Bank maintains an account in the relevant foreign currency (other than the Euro) in the principal financial centre in which such foreign currency is issued, or (in the case of the Euro) the bank in which DBS Bank maintains an account in Euro;
	“Business Day” shall mean a day (excluding Saturdays, Sundays and public holidays) (a) on which banks are open in Singapore; and (b) if the transaction requires or involves a foreign currency (other than the Euro), on which banks in the principal financial centre where such foreign currency is issued are open; and/or (c) if the transaction requires or involves the Euro, on which the Agent Bank for the Euro and the system in which such Agent Bank uses, are open;
	“facility documents” means the facility letter, the Securities or any one or more of them as the context may require;
	“facility letter” means the letter of offer relating to the Facilities granted or to be granted by DBS Bank to the customer to which these Standard Conditions are annexed and these Standard Conditions;
	“financial indebtedness” means any indebtedness for or in respect of:

1.	moneys borrowed;
2.	any amount raised by acceptance under any acceptance credit facility;
3.	any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
4.	the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;
5.	receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

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[On Letterhead of DBS Bank Ltd]

6.	any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
7.	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
8.	any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
9.	the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs 1 to 8 above.

	“foreign currency” means any currency other than Singapore Dollars;
	“holding company” means a holding company as defined under Section 5 of the Companies Act (Cap. 50);
	“Letter of Guarantee” means any letter of guarantee, banker’s guarantee, performance bond, standby letter of credit, indemnities or undertakings issued by DBS Bank on behalf of or at the request of the customer under the Facilities granted by DBS Bank to the customer under the facility letter;
	“person” shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) or two or more of the foregoing;
	“Potential Termination Event” means any condition act omission or event which, with the giving of notice, lapse of time and/or the making of any determination by DBS Bank, would become a Termination Event;
	“Prime Rate” means the prime lending rate of DBS Bank prevailing from time to time, which is subject to variation without prior notice to the customer or any other person;
	“Securities” means all, any or each of the guarantees and securities from time to time created or executed in favour of DBS Bank to secure the Total Indebtedness or any part thereof;
	“security provider” shall include any guarantor, any party to the Securities (other than DBS Bank), any surety or any indemnifier for the Facilities;
	“subsidiary” means a subsidiary as defined under Section 5 of the Companies Act (Cap. 50); and
	“Total Indebtedness” means at any time, all amounts (whether of principal, interest, fees, costs, charges, expenses or otherwise) at that time owing or payable (whether certain or contingent and whether as surety or as principal) from the customer either solely or jointly with any other person(s) to DBS Bank under or in connection with or arising out of any Facilities from time to time extended or granted by DBS Bank to the customer either solely or jointly with any other person(s) pursuant to the terms and conditions of any facility document (including facility letters other than those to which these Standard Conditions are annexed) and including, without limitation, any amounts for which the customer is liable to indemnify DBS Bank in any matter whatsoever.
2.	The headings in the facility letter are inserted for convenience only and shall be ignored in construing the facility letter.
3.	Unless the context otherwise requires, words (including words defined herein) denoting the singular number shall also include the plural number and vice versa, and words denoting any gender shall include any other gender.
4.	All references to any document or agreement are to be construed as references to such document or agreement as amended, varied, modified or supplemented from time to time and any document or agreement in addition to or in substitution therefor.
5.	Where two or more persons are included in the term “the customer”:-

(i)	all covenants agreements terms conditions provisions restrictions or obligations shall be deemed to be made by and binding on and applicable to them jointly and each of them severally and shall also be binding on and applicable to their respective successors and permitted assigns jointly and severally;
(ii)	any notice given by DBS Bank to any of one of the customer shall be binding on the others and any notice or demand given by DBS Bank to any one of the customer shall be deemed to be served on all of them.

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DBS/G06/02

GUARANTEE

1. In consideration of DBS Bank Ltd., a company incorporated in the Republic of Singapore and having its registered office at No. 6 Shenton Way, DBS Building, Singapore 068809 (“the Bank”) making or continuing to make at our request advances loans credit and other banking facilities and/or other facilities and services whether in the form of hire purchase, factoring, purchase of accounts receivables and/or any other facilities or services whatsoever (“the Facilities” which expression shall include any of them or any part thereof) from time to time and to such extent and for so long as the Bank may think fit to STATS CHIPPAC KOREA LIMITED a company incorporated in the Republic of Korea and having its registered office at                                                                                                                                                                           (“the Borrower”) We, STATS CHIPPAC LTD. a company incorporated in Singapore and having a registered office at 10 ANG MO KIO STREET 65 #05-17/20 TECHPOINT SINGAPORE 569059 (“the Guarantor”) HEREBY IRREVOCABLY AND UNCONDITIONALLY guarantee to pay and satisfy the Bank on demand as principal debtor and not merely as surety all sums of money which are now or shall from time to time and at any time hereafter be due or owing to the Bank by the Borrower solely or jointly with any other person or persons and whether as principal or surety or which the Borrower may be or become liable to pay to the Bank anywhere on any account or otherwise or in any manner whatsoever and all other liabilities whether certain or contingent including the balance for the time being owing for or in respect of cheques bills notes drafts or other negotiable or non-negotiable instruments signed drawn accepted endorsed paid or discounted for and on behalf of the Borrower whether alone or jointly with another or others or for any other payments credits or advances made to or for the use or accommodation of or on behalf of the Borrower whether alone or jointly with another or others pursuant to or in respect of or under any guarantee or letter of credit given established or opened by the Bank for the Borrower or any contracts for the forward delivery of goods bills or specie or in respect of any other banking facilities whatsoever whether or not given upon or under any trust receipts or other security whatsoever or otherwise howsoever together with in all cases as aforesaid interest thereon at the Bank’s rate or rates for the time being applicable to such accounts calculated on a daily basis, with monthly rests, notwithstanding that the relationship of banker and customer may have ceased, discount and other bankers’ charges including legal charges occasioned by or incidental to this or any other security held by or offered to the Bank for the same indebtedness and all costs charges and expenses which the Bank may incur in enforcing or seeking to obtain payment of all or any part of the monies hereby guaranteed until full payment is received by the Bank both after as well as before judgment shall have been obtained in respect thereof (“Guaranteed Money”, which expression shall include any part thereof).

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2.	This Guarantee shall not be considered as satisfied by any intermediate payment or satisfaction of the Guaranteed Money but shall be a continuing security and shall extend to cover all or any part of the Guaranteed Money which shall for the time being constitute the balance due or owing from the Borrower to the Bank upon any account or otherwise as aforesaid.
3.	The Bank may at any time and without affecting its rights against the Guarantor determine enlarge or vary any credit to the Borrower, vary exchange abstain from perfecting or release any other securities held or to be held by the Bank for or on account of the Guaranteed Money, open a fresh account or accounts and/or continue with any account or accounts current or otherwise with or for the Borrower renew bills and promissory notes in any manner and compound with give time for payment, accept compositions from and make any other arrangements with the Borrower or any obligants on bills notes or other securities held or to be held by the Bank for and on behalf of the Borrower.
4.	This Guarantee shall be in addition to and shall not be in any way prejudiced or affected by any collateral or other security now or hereafter held by the Bank for the Guaranteed Money nor shall such collateral or other security or any lien to which the Bank may be otherwise entitled or the liability of any person or persons not parties hereto for all or any part of the Guaranteed Money be in any way prejudiced or affected by this Guarantee. The Bank shall have full power at its discretion to give time for payment or to make any other arrangement with any such other person or persons without prejudice to this Guarantee or the Guarantor’s liability hereunder. All monies received by the Bank from the Guarantor or the Borrower or any person or persons liable to pay the same may be applied by the Bank to any account or item of account or to any transaction which the same may be applicable.
5.	No disposition assurance security or payment which may be avoided under any law relating to bankruptcy or under any provisions of the Companies Act (Cap 50) or any statutory modification thereof or under any other applicable laws or is otherwise avoided in any manner and no release settlement or discharge which may have been given or made on the faith of any such disposition assurance security or payment shall prejudice or affect the Bank’s right to recover from the Guarantor monies to the full extent of this Guarantee as if such disposition assurance security payment release settlement or discharge had never been granted given or made.
6.	All dividends compositions and monies received by the Bank from the Borrower or from any other company person or estate capable of being applied by the Bank in reduction of the indebtedness of the Borrower shall be regarded for all purposes as payments in gross and in the event of bankruptcy or winding up or any receiving order or other analogous order being made or any other analogous events occurring under any applicable laws in relation to the Borrower the Bank shall be entitled to

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	prove in the bankruptcy winding up dissolution or liquidation of the Borrower in respect of the whole of the Borrower’s indebtedness to the Bank and without any right of the Guarantor to be subrogated to the Bank in respect of any such proof until the Bank shall have received in the bankruptcy winding up or liquidation of the Borrower or from other sources one hundred (100) cents in the dollar.
7.	Any payments by the Guarantor hereunder shall be made without any set-off or counterclaim and shall be free and clear of any taxes including withholding taxes, import or levies. If the Guarantor is required to make any payment hereunder subject to the deduction or withholding of tax, the Guarantor shall increase the sum payable by him to the extent necessary to ensure that, after making the required deduction or withholding, the Bank receives and retains (free from any liability in respect of any such deduction or withholding) a net sum equal to the sum which it would have received and so retained had no such deduction or withholding been made or required to be made. The Guarantor shall thereafter submit all tax receipts or such evidence of payment of tax to the Bank as soon as reasonably practicable.
8.	If any goods and services tax (“GST” which expression includes any tax of a similar nature which may be substituted or levied in addition to it) whatsoever is now or hereafter chargeable by law on any payment hereunder, the Guarantor shall pay such GST in addition to all other sums payable hereunder or relating hereto and agrees to indemnify the Bank against the payment if the Bank is required by law to collect and make payment in respect of such GST. The Bank may debit the Guarantor’s account(s) for such GST including default interest payable in the same manner as may be provided herein or in any agreement relating hereto for the Facilities and/or other charges or as the Bank may prescribe from time to time, notwithstanding such debiting may result in the Guarantor’s account becoming overdrawn.
9.	The Bank may but is not bound to resort for the Bank’s own benefit to any other means of payment at any time and in any order the Bank deems fit without thereby diminishing the Guarantor’s liability hereunder and the Bank may exercise its rights under this Guarantee in force either for payment of the ultimate balance after resorting to other means of payment or for the balance due notwithstanding that other means of payment have not been resorted to and in the latter case without entitling the Guarantor to any benefit from such other means of payment so long as the Guaranteed Money remains owing and unpaid by the Borrower to the Bank and in addition the Bank may require payment by the Guarantor of his liability without taking any proceedings first to enforce such payment by the Borrower.
10.	If any monies shall be paid by the Guarantor to the Bank under this Guarantee, the Guarantor shall not in respect of the amount so paid seek to enforce repayment or to exercise any other rights or legal remedies of whatsoever kind which may accrue howsoever to the Guarantor in respect of the amount so paid until the Guaranteed Money owing from the Borrower to the Bank has been fully paid to the

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	Bank. The Guarantor will not prove in competition with the Bank for any monies owing by the Borrower to the Guarantor on any account whatsoever and/or in respect of any monies due or owing from the Borrower to the Bank but will give to the Bank the full benefit of any proof which the Guarantor may be able to make in the bankruptcy or winding up or liquidation of the Borrower or in any arrangement or composition with creditors until the Bank shall have received all monies guaranteed hereunder outstanding and remaining unpaid by the Borrower to the Bank.
11.	Any indebtedness of the Borrower now or hereafter held by the Guarantor shall be fully subordinated to the indebtedness of the Borrower to the Bank and such indebtedness of the Borrower to the Guarantor if the Bank so requires shall be collected enforced and received by the Guarantor as trustee for the Bank and shall be paid over to the Bank on account of the indebtedness of the Borrower to the Bank but without reducing or affecting in any manner the liability of the Guarantor under this Guarantee until all the Guaranteed Money has been fully paid to the Bank.
12.	The Guarantor agrees and acknowledges that the obligations and liabilities of the Guarantor hereunder shall be absolute and unconditional and in addition to the other provisions of this Guarantee, shall not be abrogated, prejudiced, affected or discharged:

(a)	by the Bank granting explicitly or by conduct or otherwise, whether directly or indirectly, to the Borrower, any of the Guarantor or any other person of any time, forbearance, concession, credit compounding, compromise, waiver, variation, renewal, release, discharge or other advantage or indulgence;
(b)	by the Bank failing neglecting or deciding not to recover the moneys hereby guaranteed or any part thereof by the realisation of any collateral or other security or in any manner otherwise or in the event of enforcement by the Bank of any collateral or other security or any remedy or otherwise, by any act, omission, negligence or other conduct or failure on the part of the Bank or any other person in connection therewith;
(c)	by any laches, acquiescence, delay, acts, omissions, mistakes on the part of the Bank or any other person;
(d)	by reason of any agreement, deed, mortgage, charge, debenture, guarantee indemnity or security held or taken at any time by the Bank or by reason of the same being void, voidable or unenforceable;
(e)	by any moratorium or other period staying or suspending by statute or order of any court or other authority all or any of the Bank’s rights, remedies or recourse against the Borrower or any of the Guarantor;

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(f)	by reason of any other dealing, matter or thing which, but for the provisions of this Clause, could or might operate to affect or discharge all or any part of the obligations and liabilities of the Guarantor hereunder;
(g)	by the Bank asserting or failing to assert any right or remedy against the Borrower or doing or omitting to do any act in pursuance of any authority or permission contained in this Guarantee.

13.	This Guarantee may be enforced by the Bank at any time notwithstanding that any bills or other instruments covered by it may be in circulation or outstanding and the Bank may include the amount of the same or any of them in the general balance of the Borrower’s account at the Bank’s discretion.
14.	The Guarantor declares he has not taken and undertakes not to take directly or indirectly from the Borrower in respect of his liability and obligation hereunder any security of any nature whatsoever whereby the Guarantor or any person claiming under him might in the Borrower’s bankruptcy or winding-up or liquidation increase the proofs in such bankruptcy or liquidation or diminish the property available for distribution to the Bank’s detriment. In the event any security is or may hereafter be held by the Guarantor from the Borrower in respect of his liability hereunder the same shall be held in trust for the Bank and as security for the Guarantor’s liability hereunder.
15.	For the consideration aforesaid and as a separate and independent stipulation :

(a)

the Guarantor agrees that all sums of money which may not be recoverable from the Guarantor on the footing of a guarantee whether by reason of any legal limitation disability or incapacity including without limitation the bankruptcy or winding-up or liquidation or any other analogous events in relation to the Borrower under any other applicable laws or any other fact or circumstance whether known to the Bank or not shall nevertheless be recoverable from the Guarantor on demand as though the Guarantor was the sole and principal debtor;

(b)

the Guarantor irrevocably and unconditionally undertakes to indemnify the Bank on a full indemnity basis against all loss damage liabilities claims on the Bank costs and expenses whatsoever which the Bank may sustain or incur in consequence of or arising from the Bank’s advances credit or financial accommodation to the Borrower together with all legal costs between solicitors and clients and other costs and disbursements incurred for or in connection with demanding and enforcing payment of all monies guaranteed hereunder or otherwise howsoever in enforcing this Guarantee and/or the covenants agreements undertakings stipulations terms and conditions of this Guarantee.

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(c) the Guarantor agrees to furnish and provide the Bank with and permits the Bank to obtain all such statements information explanation and data as the Bank may reasonably require from time to time regarding the operations and financial affairs of the Guarantor. The Guarantor hereby agrees and undertakes to furnish to the Bank every year immediately after their issue, but in any case not later than six(6) months after the close of its financial year, balance sheet and profit and loss accounts audited by a firm of auditors approved by the Bank together with auditors’ and directors’ reports and also to deliver to the Bank a copy of the annual return which the Guarantor is required by law to file with the Registrar of Companies.

16.	A statement or certificate signed by the Manager Accountant or other officer of the Bank as to the monies and liabilities for the time being due to or incurred by the Bank shall subject only to computational and/or clerical mistakes be final and conclusive and be binding on the Guarantor.
17.	This Guarantee shall continue to bind the Guarantor notwithstanding :

(a)	any change by amalgamation reconstruction or otherwise which may be made in the constitution of the company by which the business of the Bank may for the time being be carried on and shall be available to the company carrying on the business of the Bank for the time being; or
(b)	any winding-up (whether voluntary or compulsory) amalgamation or reconstruction of or affecting the Borrower or any defect informality or insufficiency of the Borrower’s borrowing powers; or
(c)	any winding-up (whether voluntary or compulsory) amalgamation or reconstruction of or affecting the Guarantor.

18. The Guarantor shall, immediately upon any occurrence of the following:

(i)	the giving of notice by the Guarantor to convene its general meeting for passing any resolution to wind up the Guarantor; or
(ii)	the filing of any application for placing the Guarantor under judicial management; or
(iii)	the filing of any petition for winding up the Guarantor.

notify the Bank of the same.

Where any such notification as aforesaid is given verbally by the Guarantor to the Bank, the Guarantor shall confirm it in writing within twenty-four (24) hours thereof.

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19.	The Guarantor shall not be discharged or released from this Guarantee by any alteration in the obligations covenants undertakings stipulations terms and conditions governing the Facilities (“the Terms”). The Bank may from time to time vary, or add to the Terms and this Guarantee shall extend and apply to the Terms varied or added to (notwithstanding such variations or additions may impose further liabilities or more onerous covenants undertakings or burdens on the Borrower) notwithstanding the Guarantor shall not have received notice or been made aware of or consented to such variations of or additions to the Terms.
20.	Any demand for payment of monies or any other demand or notice under this Guarantee may be made by any officer of the rank of Assistant Treasurer and above or any Secretary Manager Accountant Legal Officer or by any person or firm acting as solicitors for the Bank by a letter addressed to the Guarantor or any of them and sent by registered post or delivered to the address abovestated and a notice or demand so served shall be deemed to be served and received on the day it was so left or the 3rd day from the date it is posted (where the Guarantor’s address is in Singapore) or 7 days after posting (where the Guarantor’s address is outside Singapore), as the case may be.
21.	The Guarantor may not determine or revoke this Guarantee unless the Guarantor makes full provision for any other outstanding liabilities or obligations to the Bank of the Borrower’s account guaranteed hereunder and not unless the Guaranteed Money is paid to the Bank in full. Notwithstanding the Bank’s receipt of notice of the Guarantor’s intention to revoke this Guarantee, the Bank shall be entitled to continue to make advances to the Borrower in respect of the Facilities and the Guarantor irrevocably and unconditionally agrees that he shall continue to be liable for all such advances until all monies hereby guaranteed are paid to and received by the Bank in full.
22.	In addition to any lien right of set-off or other right which the Bank may have the Bank shall be entitled at any time and without notice to the Borrower or the Guarantor to combine or consolidate all or any of the accounts and liabilities of the Borrower or the Guarantor with or to the Bank anywhere whether in or outside Singapore or set-off or transfer any sums standing to the credit of one or more of such accounts in or towards satisfaction of any of the liabilities of the Borrower or the Guarantor to the Bank on any other accounts whether in or outside Singapore or in any other respect whether such liabilities be actual or contingent primary or collateral several or joint notwithstanding that the credit balances on such accounts and the liabilities on any other accounts may not be expressed in the same currency and the Bank is hereby authorised to effect any necessary conversions at the Bank’s prevailing rate of exchange.
23.	In addition and without prejudice to any right or remedies of the Bank under this Guarantee or by law conferred upon the Bank, the Bank may from time to time and

7

	at any time debit to any account of the Guarantor with the Bank, whether the account be current or otherwise, all or any part of the Guaranteed Money and the sums so debited shall be deemed to be monies advanced by the Bank to the Guarantor on the Guarantor’s account and payable on demand.
24.	In addition and without prejudice to any other rights of the Bank under the loan and security documents relating to the Facilities, if this Guarantee or any other security for the Facilities is terminated, or for any other reason which the Bank deems justifiable, the Bank may forthwith open a new or separate account (“the new account”) for the Borrower in the Bank’s books and if the Bank does not in fact open such new account it shall nevertheless be deemed to have done so at the time of such termination and as from and after the time that the new account was opened or so deemed to have been opened, all payments made by or on behalf of the Borrower shall (notwithstanding any legal or equitable rule of presumption to the contrary) be credited or deemed to have been credited to the new account and shall not go to reduce the amount owing by the Guarantor to the Bank at the time the new account was opened or deemed to have been opened, unless the Bank expressly directs otherwise after all sums (actual or contingent) owing to the Bank under the new account have been paid and satisfied to the Bank in full or at any other time.
25.	If the Borrower shall in any respect fail refuse and/or neglect to observe and perform any of the obligations covenants undertakings stipulations terms and conditions contained in the Terms governing the Facilities on the Borrower’s part to be observed and performed the Guarantor shall indemnify the Bank in full and keep the Bank fully indemnified against all losses damages costs expenses liabilities or otherwise which may be incurred or sustained by the Bank by reason of such failure refusal or neglect on the part of the Borrower.
26.	In addition to the rights conferred by any applicable laws, the Guarantor consents to the Bank disclosing any information relating to this Guarantee where such disclosure may be required under any applicable law or regulation or by any governmental authority or body with whose requests the Bank is accustomed to or required to comply.

27. (a)  Without prejudice to the other provisions of this Guarantee any amount received or recovered by the Bank in a currency other than the contractual currency whether as a result of or of the enforcement of a judgment or order of court or tribunal of any jurisdiction in the dissolution of the Borrower and/or the Guarantor or otherwise, shall only constitute a discharge to the extent of the amount in the contractual currency which the Bank is able in accordance with its usual practice to purchase with the amount so received or recovered in such other currency on the date of that receipt or recovery (or if it is not practicable to make that purchase on that date on the first date on which it is practicable to do so).

8

	(b)	If that amount in the contractual currency is less than the amount in the contractual currency due to the Bank by the Borrower, the Guarantor shall indemnify the Bank against any loss sustained by the Bank as a result. In any event, the Guarantor shall indemnify the Bank against the cost of making any such purchase.
	(c)	These indemnities constitute a separate and independent obligation from the other obligations in this Guarantee and shall give rise to a separate and independent cause of action.
28.	(a)	This Guarantee shall be governed by and construed in all respects in accordance with the laws of Singapore and shall be subject to the non-exclusive jurisdiction of the courts of Singapore. The Guarantor hereby agrees that where any actions or proceedings are initiated and taken in Singapore the Guarantor shall submit to the jurisdiction of the courts of Singapore. The service of any writ of summons or any legal process in respect of any action or proceeding hereunder may be effected on the Guarantor by forwarding a copy of the writ of summons and statement of claim or other legal process by registered post to the address of the Guarantor hereinbefore stated.
	(b)	To the extent that the Guarantor may in any jurisdiction claim for himself or his assets immunity from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process and to the extent in any such jurisdiction there may be attributed to himself or his assets such immunity whether on grounds of sovereignty or otherwise (whether or not claimed), the Guarantor irrevocably agrees not to claim and irrevocably waives such immunity to the full extent permitted by the laws of such jurisdiction. The Guarantor irrevocably agrees and undertakes that he and his assets are, and shall be subject to any proceedings attachment or execution in respect of its obligations under this Guarantee.
	(c)	The Guarantor irrevocably consents in respect of any proceedings anywhere to the giving of any relief or the issue of any process in connection with those proceedings including, without limitation, the making, enforcement or execution against any assets whatsoever (irrespective of the use or intended use) of any order or judgment which may be made or given in those proceedings.

29.	The Guarantor may not assign its rights nor transfer its obligations or any part thereof under this Guarantee. The Bank shall be entitled to assign or transfer any part or all of its rights and or obligations under this Guarantee.
30	The Guarantor will ensure that its obligation under the Guarantee are unconditional and unsubordinated and will at all times rank at least pari passu with all its other

9

unsecured and unsubordinated obligations (except for such obligation mandatorily preferred by law).

31. Unless expressly provided to the contrary in this Agreement, a person who is not a party to this Agreement may not enforce any of its terms under the Contracts (Rights of Third Parties) Act (Chapter 53B) and notwithstanding any term of this Agreement, the consent of any third party is not required for any variation (including any release or compromise of any liability) or termination of this Agreement.

32. In this Guarantee where the context so admits :

(a)	words importing the singular number include the plural number and vice versa;
(b)	words importing the masculine gender include the feminine or neuter gender;
(c)	the expression “the Guarantor” includes the personal representatives and successors-in-title of the Guarantor;
(d)	the expression “the Bank” and “the Borrower” include their respective successors and assigns; and
(e)	the word “person” includes any company or association or body of persons, corporate or unincorporated.

10

IN WITNESS WHEREOF the Guarantor has hereunto affixed its Common Seal on the          day of                              2009.

THE COMMON SEAL OF	)
	)
STATS CHIPPAC LTD.	)
	)                    [Company Seal]
was hereunto affixed	)
	)
in the presence of:-	)

/s/ Tan Lay Koon
		- Director
Name	: Tan Lay Koon
NRIC/Passport No	: S1331323G
/s/ Elaine Sin
		- Director/ Secretary
Name	: Elaine Sin
NRIC/Passport No	: S6978193D

     I,                                                                              , an Advocate and Solicitor of the Supreme Court in the Republic of Singapore practising in the Republic of Singapore hereby certify that on the          day of                                           2009 the Common Seal of                                                                                                                        was duly affixed to the within written instrument at Singapore in my presence in accordance with the regulations of the said company (which regulations have been produced and shown to me).

     Witness my hand.

11

EX-12.1

EXHIBIT 12.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Tan Lay Koon, certify that:

1.	I have reviewed this annual report on Form 20-F of STATS ChipPAC Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 5, 2010

/s/ Tan Lay Koon  

Tan Lay Koon 

President and Chief Executive Officer 

EX-12.2

EXHIBIT 12.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Lau Tai Chong, certify that:

1.	I have reviewed this annual report on Form 20-F of STATS ChipPAC Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 5, 2010

/s/ John Lau Tai Chong  

John Lau Tai Chong 

Chief Financial Officer 

EX-13.1

EXHIBIT 13.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of STATS ChipPAC Ltd. (the “Company”) on Form 20-F for the fiscal year ended December 27, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies that to the best of such officer’s knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 5, 2010

/s/ Tan Lay Koon  

Name: Tan Lay Koon 

Title: President and Chief Executive Officer 

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being “filed” either as part of the Report or as a separate disclosure statement, and is not to be incorporated by reference into the Report or any other filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The foregoing certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18 or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

EX-13.2

EXHIBIT 13.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of STATS ChipPAC Ltd. (the “Company”) on Form 20-F for the fiscal year ended December 27, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies that to the best of such officer’s knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 5, 2010

/s/ John Lau Tai Chong  

Name: John Lau Tai Chong 

Title: Chief Financial Officer 

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being “filed” either as part of the Report or as a separate disclosure statement, and is not to be incorporated by reference into the Report or any other filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The foregoing certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18 or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

EX-15.1

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
STATS ChipPAC Ltd

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (SEC Registration Numbers 333-136588, 333-118555, 333-75080 and 333-114232) of STATS ChipPAC Ltd. of our report dated March 5, 2010 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in STATS ChipPAC Ltd.’s Annual Report on Form 20-F for the year ended December 27, 2009.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Singapore
March 5, 2010