##### Table of Contents



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 TechpointRepublic 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)
  None
    
    None(Title of Class)
    
    (Name of Exchange on which registered)
 None  (Title of Class
 None
  2,202,218,293 Ordinary Shares of Registrant.
  o þ
  þ o
  o þ
   Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
   U.S. GAAP þ
    
    International Financial Reporting Standards as issued by the
International Accounting Standards Board o
    
    Other o
  o o
  o þ
  o o




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##### 



TABLE OF CONTENTS
  
 PAGEITEM 1.
    
    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
    
    
    2ITEM 2.
    
    OFFER STATISTICS AND EXPECTED TIMETABLE
    
    
    2ITEM 3.
    
    KEY INFORMATION
    
    
    2ITEM 4.
    
    INFORMATION ON THE COMPANY
    
    
    24ITEM 4A.
    
    UNRESOLVED STAFF COMMENTS
    
    
    48ITEM 5.
    
    OPERATING AND FINANCIAL REVIEW AND PROSPECTS
    
    
    48ITEM 6.
    
    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
    
    
    69ITEM 7.
    
    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
    
    
    83ITEM 8.
    
    FINANCIAL INFORMATION
    
    
    86ITEM 9.
    
    THE OFFER AND LISTING
    
    
    87ITEM 10.
    
    ADDITIONAL INFORMATION
    
    
    88ITEM 11.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    102ITEM 12.
    
    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
    
    
    103ITEM 13.
    
    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
    
    
    103ITEM 14.
    
    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS
    
    
    103ITEM 15.
    
    CONTROLS AND PROCEDURES
    
    
    103ITEM 16A.
    
    AUDIT COMMITTEE FINANCIAL EXPERT
    
    
    104ITEM 16B.
    
    CODE OF ETHICS
    
    
    104ITEM 16C.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    105ITEM 16D.
    
    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE
    
    
    106ITEM 16E.
    
    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
    
    
    106ITEM 16F.
    
    CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
    
    
    106ITEM 16G.
    
    CORPORATE GOVERNANCE
    
    
    106ITEM 17.
    
    FINANCIAL STATEMENTS
    
    
    106ITEM 18.
    
    FINANCIAL STATEMENTS
    
    
    106ITEM 19.
    
    EXHIBITS
    
    
    107SIGNATURES
    
    
    110INDEX TO FINANCIAL STATEMENTS
    
    
    F-1Ex-1.2 Amended Articles of Association of STATS ChipPAC Ltd.Ex-4.24 STATS ChipPAC Ltd. Performance Share Plan 2009Ex-4.25 STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive DirectorsEx-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 2002Ex-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 2002Ex-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 2002Ex-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 2002Ex-15.1 Consent of PricewaterhouseCoopers LLP, Singapore, independent registered public accounting firm




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GENERAL INFORMATION
      FORWARD-LOOKING STATEMENTS
  1




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ITEM 1.
    
    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  
 ITEM 2.
    
    OFFER STATISTICS AND EXPECTED TIMETABLE
  
 ITEM 3.
    
    KEY INFORMATION
 A. Selected Financial Data
   Year EndedDecember 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
    
    
    $
    1,325,685Cost 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
 2




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Year EndedDecember 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
    
    
    
    95,516Research and development
    
    
    26,071
    
    
    
    30,446
    
    
    
    34,918
    
    
    
    37,825
    
    
    
    43,358Restructuring charges (1)
    
    
    830
    
    
    
    1,938
    
    
    
    990
    
    
    
    19,790
    
    
    
    16,072Equipment 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
    
    
    
    154,946Operating income (4)
    
    
    26,578
    
    
    
    154,310
    
    
    
    160,128
    
    
    
    75,786
    
    
    
    53,431Other 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
    
    
    
    14,738Income tax expense
    
    
    (9,689
    )
    
    
    (25,759
    )
    
    
    (29,581
    )
    
    
    (19,172
    )
    
    
    (3,712
    )Net income (loss)
    
    
    (19,871
    )
    
    
    86,818
    
    
    
    99,502
    
    
    
    30,150
    
    
    
    11,026Less: 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
    
    
    $
    10,053Net income (loss) per ordinary share attributable
to STATS ChipPAC:Basic
    
    $
    (0.01
    )
    
    $
    0.04
    
    
    $
    0.05
    
    
    $
    0.01
    
    
    $
    0.00Diluted
    
    $
    (0.01
    )
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    0.01
    
    
    $
    0.00Net 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
    
    
    
    2,202,218Diluted
    
    
    1,961,950
    
    
    
    2,161,545
    
    
    
    2,188,687
    
    
    
    2,146,249
    
    
    
    2,202,230ADS (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 EndedDecember 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
    
    
    $
    268,349Amortization of leasing prepayments
    
    
    25,790
    
    
    
    7,386
    
    
    
    11
    
    
    
    
    
    
    
    Capital expenditures
    
    
    277,712
    
    
    
    348,495
    
    
    
    268,754
    
    
    
    239,020
    
    
    
    159,222Net cash provided by operating activities
    
    
    270,729
    
    
    
    427,771
    
    
    
    411,512
    
    
    
    419,525
    
    
    
    174,872Net 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 OfDecember 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
    
    
    $
    288,683Working capital
    
    
    250,369
    
    
    
    227,967
    
    
    
    31,610
    
    
    
    192,588
    
    
    
    163,151Total assets
    
    
    2,393,382
    
    
    
    2,458,280
    
    
    
    2,596,954
    
    
    
    2,447,063
    
    
    
    2,426,940
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As OfDecember 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
    
    
    
    1,623,546Current 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
    
    
    
    224,786Obligation under capital leases, excluding
current installments
    
    
    3,680
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Long-term debt, excluding current installments
    
    
    775,425
    
    
    
    697,523
    
    
    
    423,853
    
    
    
    396,500
    
    
    
    233,181Shareholders equity
    
    
    1,141,652
    
    
    
    1,246,150
    
    
    
    1,383,969
    
    
    
    1,548,657
    
    
    
    1,564,669Share capital (6)
    
    
    303,052
    
    
    
    1,847,002
    
    
    
    1,891,546
    
    
    
    2,035,235
    
    
    
    2,035,573Additional 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
  C. Reasons for the Offer and Use of Proceeds
  D. Risk Factors
  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.
  4




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
    
    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.
  Downturns in the semiconductor industry have adversely affected our operating results and may
continue to adversely affect our operating results.
  
    
    decreases in product demand;
    
    excess capacity;
    
    excess inventories;
    
    increased competition from competitors; and
    
    accelerated erosion in average selling prices.
  A decrease in demand for communications equipment, consumer and multi-applications, or PCs may
adversely affect our business.
 multi-applications
 5




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Decisions by our IDM customers to curtail outsourcing may adversely affect our business.
   We may not be able to compete successfully in our industry.
    
    
    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 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.
   6




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We may not be able to develop or access leading technology which may affect our ability to
compete effectively.
   The application of push-down accounting or any other change in accounting standards could affect
our results of operations.
   7




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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.
  We may be subject to intellectual property rights disputes which could materially and adversely
affect our business.
   
    
    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.
   We may be subject to claims and litigations which could materially and adversely affect our
business.
  8




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We may not be able to successfully implement our strategy if we do not control our operating
expenses.
   We have experienced substantial losses in the past and may do so in the future.
  Our substantial indebtedness could adversely affect our financial health.
   
    
    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.
  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.
  10




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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.
  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.
    
    
    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.
  Our operating results have fluctuated, and may continue to fluctuate, from quarter to quarter,
which may make it difficult to predict our future performance.
  
    
    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.
  If we are unable to maintain or increase our capacity utilization, our gross margin will be
adversely affected.
  12




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
    
    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.
  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.
   13




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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.
  
    
    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).
   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 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.
  14




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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 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.
  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.
  Loss of our key management and other personnel, or an inability to attract such management and
other personnel, could impact 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.
  15




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##### Table of Contents




    
    contaminants in the manufacturing environment;
    
    human error;
    
    equipment malfunction;
    
    defective raw materials; or
    
    defective plating services.
   We could suffer adverse tax and other financial consequences if taxing authorities do not agree
with our interpretation of applicable tax laws.
   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.
  16




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##### Table of Contents



Our intellectual property is important to our ability to succeed in our business but may be
difficult to obtain and protect.
  know-how
  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.
  17




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Significant fluctuations in exchange rates may affect our business, financial condition and
results of operations.
   Our ability to make further investments in our subsidiaries may be dependent on regulatory
approvals.
  Temasek controls our Company and its interests may conflict with the interests of our other
shareholders.
   
    
    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.
  
    
    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;
 18




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##### Table of Contents




    
    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.
  We may have conflicts of interest with our affiliates which may not 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.
   
    
    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.
  19




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##### Table of Contents



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.
  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.
  
    
    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.
  Conducting business in China involves uncertainties and there can be no assurances that the
intended benefits from our new China facility will be realized.
  
    
    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;
 20




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##### Table of Contents




    
    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.
  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.
  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.
  Risks Relating to Our Ordinary Shares
  21




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The trading price of our ordinary shares has been and may continue to be volatile.
  
    
    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 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.
    22




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##### Table of Contents



Our public shareholders may have more difficulty protecting their interests 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.
  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.
 SGX-ST
 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.
  23




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##### Table of Contents



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.
  
 ITEM 4.
    
    INFORMATION ON THE COMPANY
 A. History and Development of our Company
   www.statschippac.com. Information contained on our website does not constitute a part of this
annual report.
    24




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##### Table of Contents



see-through
       .
 B. Business Overview
  
    
    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
 25




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##### Table of Contents



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.
 System-in-Package
   Our Industry
      26




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##### Table of Contents



Semiconductor Manufacturing Process
  
    
    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.
 Wafer Probe.
 Wafer Bumping.
 I/O Trace Redistribution.
 Assembly.
 Final Testing.
 27




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##### Table of Contents



Our Strengths and Strategy
  Leverage our broad portfolio of packaging and test services to provide full turnkey solutions.
 Leverage our established presence in the major geographic hubs of wafer fabrication.
 Capitalize on our research and development capabilities to drive accelerated growth.
 Continue to cultivate our strong customer relationships.
 Continue to focus on high-quality customer service.
 Our Services
   Year EndedDecember 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009Packaging  laminate
    
    
    56.3
    %
    
    
    56.5
    %
    
    
    57.9
    %Packaging  leaded
    
    
    18.4
    
    
    
    18.0
    
    
    
    15.1Test and other services
    
    
    25.3
    
    
    
    25.5
    
    
    
    27.0Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 28




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##### Table of Contents



Packaging Services
  Laminate Packaging.
  
    
    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.
    3D Packaging
 29




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##### Table of Contents



Flip-chip.
  
    
    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
 30




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##### Table of Contents



(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.
  NumberPackage Format
    
    of I/Os
    
    Description
    
    Types of ApplicationsFine 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.
 31




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##### Table of Contents



NumberPackage Format
    
    of I/Os
    
    Description
    
    Types of Applicationsone 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
 32




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##### Table of Contents



NumberPackage Format
    
    of I/Os
    
    Description
    
    Types of Applicationsconsumer 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:200-700PoPt: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:108PoPb: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.
 33




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##### Table of Contents



Standard Lead-frame Packages.
 NumberPackage Format
    
    of I/Os
    
    Description
    
    Types of ApplicationsThin 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.
   NumberPackage Format
    
    of I/Os
    
    Description
    
    Types of ApplicationsQFN
    
    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,
 34




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##### Table of Contents



NumberPackage Format
    
    of I/Os
    
    Description
    
    Types of Applicationsencapsulated, 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.
   35




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Embedded Wafer-Level Ball Grid Array (eWLB).
   front-end
  Test Services
    36




---



##### Table of Contents



socket-custom
  Mixed-signal and RF Testing. Bluetooth (tm) Bluetooth (tm) Bluetooth (tm)
 Digital Testing.
 Memory Testing.
 Test-Related Services.
 
    
    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
 pre-production wholly-owned
 37




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Package Development.
 Test Software and Hardware Development.
  Warehousing and Drop Shipment Services.
 Research and Development
  Packaging Services
  38




---



##### Table of Contents



hand-held
   
    
    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;
 39




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##### Table of Contents




    
    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.
  Test Services
  Customers
   Year EndedDecember 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009Communications
    
    
    52.5
    %
    
    
    51.8
    %
    
    
    50.1
    %Customer and other applications
    
    
    32.0
    
    
    
    31.6
    
    
    
    33.0PCs
    
    
    15.5
    
    
    
    16.6
    
    
    
    16.9Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  Year EndedDecember 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009United States
    
    
    74.7
    %
    
    
    72.5
    %
    
    
    72.5
    %Asia
    
    
    22.3
    
    
    
    22.5
    
    
    
    21.7Europe
    
    
    3.0
    
    
    
    5.0
    
    
    
    5.8Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  40




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##### Table of Contents



Sales and Marketing
   Bluetooth (tm)
 Pricing Policy
   Customer Service
  41




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##### Table of Contents



Suppliers
 Raw Materials
  Equipment
   Packaging Equipment.
 Testing Equipment.
  42




---



##### Table of Contents



Quality Control
    Competition
   
    
    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.
   
    
    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.
  43




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Intellectual Property
        44




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Insurance
  Environmental Matters and Compliance
   45




---



##### Table of Contents



C. Corporate Structure
  
 
 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. 46




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D. Property, Plants and Equipment
  Area
    
    
    
    Principal PackagingProperty/Location (1)
    
    (Sq. Feet)
    
    Functions/Services
    
    or Services ProvidedYishun, 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.
 47




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##### Table of Contents



Area
    
    
    
    Principal PackagingProperty/Location (1)
    
    (Sq. Feet)
    
    Functions/Services
    
    or Services ProvidedMilpitas, 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
  
 ITEM 5.
    
    OPERATING AND FINANCIAL REVIEW AND PROSPECTS
  Overview
  Global Market Conditions
  48




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Proposed Capital Reduction and Cash Distribution
    Temaseks Subsidiary, STSPLs, Tender Offer
      49




---



##### Table of Contents



Factors Affecting Our Results of Operations
 Cyclicality of the Semiconductor Industry.
  Declining Prices.
 Cost of Revenues.
  Capacity Utilization.
 50




---



##### Table of Contents



Goodwill and Intangible Assets.
     Critical Accounting Policies
  Revenue Recognition, Allowance For Doubtful Debts, Trade Discounts and Allowances and Sales
Returns
     51




---



##### Table of Contents



Valuation of Inventory
   Depreciation and Amortization
   Valuation of Property, Plant and Equipment
    52




---



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Deferred Tax Asset and Uncertain Income Tax Positions
     Valuation of Goodwill
    53




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Contingencies
   Results of Operations
  Year EndedDecember 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009Net revenuesPackaging laminate
    
    
    56.3
    %
    
    
    56.5
    %
    
    
    57.9
    %Packaging leaded
    
    
    18.4
    
    
    
    18.0
    
    
    
    15.1Test and other services
    
    
    25.3
    
    
    
    25.5
    
    
    
    27.0Total net revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  Year EndedDecember 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009Net revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Gross profit
    
    
    19.5
    
    
    
    16.5
    
    
    
    15.7Selling, general and administrative
    
    
    6.8
    
    
    
    7.1
    
    
    
    7.2Research and development
    
    
    2.1
    
    
    
    2.3
    
    
    
    3.3Restructuring charges
    
    
    0.1
    
    
    
    1.2
    
    
    
    1.2Equipment 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
    
    
    
    4.0Other 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
   54




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Gross Profit
  Selling, General and Administrative
  Research and Development
  Restructuring Charges
    Equipment Impairment
  55




---



##### Table of Contents



Accelerated Share-based Compensation
  Net Interest Income (Expense)
   Foreign Currency Exchange Gain (Loss)
  Other Non-Operating Income (Expense), Net
 non-operating
 Income Tax Expense
    Year Ended December 28, 2008 Compared to Year Ended December 30, 2007
 Net Revenues
  56




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Gross Profit
  Selling, General and Administrative
  Research and Development
  Restructuring Charges
   57




---



##### Table of Contents



Equipment Impairment
   Accelerated Share-based Compensation
 share-based
 Tender Offer Expenses
  Held for Sale Asset Impairment
  Net Interest Income (Expense)
   Foreign Currency Exchange Gain (Loss)
  Other Non-Operating Income (Expense), Net
  Income Tax Expense
  58




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##### Table of Contents



Quarterly Results
  Fiscal Quarter EndedMarch 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
    
    
    $
    394,734Cost 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
    
    
    
    83,539Operating expenses:Selling, general and
administrative
    
    
    31,466
    
    
    
    28,616
    
    
    
    29,296
    
    
    
    28,959
    
    
    
    20,607
    
    
    
    23,506
    
    
    
    26,714
    
    
    
    24,689Research and
development
    
    
    10,005
    
    
    
    9,279
    
    
    
    10,100
    
    
    
    8,441
    
    
    
    7,625
    
    
    
    9,771
    
    
    
    12,044
    
    
    
    13,918Restructuring 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
    
    
    
    38,607Operating income (loss)
    
    
    32,167
    
    
    
    35,233
    
    
    
    21,745
    
    
    
    (13,359
    )
    
    
    (43,335
    )
    
    
    15,124
    
    
    
    36,710
    
    
    
    44,932Other 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
    )
    
    
    394Equity income (loss)
from investment in
equity investee
    
    
    (136
    )
    
    
    125
    
    
    
    (392
    )
    
    
    (1,034
    )
    
    
    (980
    )
    
    
    (278
    )
    
    
    (84
    )
    
    
    21Other non-operating
income (expenses),
net
    
    
    728
    
    
    
    578
    
    
    
    187
    
    
    
    (1,466
    )
    
    
    (2,401
    )
    
    
    81
    
    
    
    231
    
    
    
    73Total 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
    
    
    
    38,494Income 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
    
    
    
    35,249Net (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
 59




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##### Table of Contents



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
    
    2009Net 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
    
    
    
    21.2Operating expenses:Selling, general and
administrative
    
    
    7.4
    
    
    
    6.6
    
    
    
    6.2
    
    
    
    8.9
    
    
    
    9.3
    
    
    
    7.3
    
    
    
    6.9
    
    
    
    6.3Research and development
    
    
    2.3
    
    
    
    2.1
    
    
    
    2.1
    
    
    
    2.6
    
    
    
    3.5
    
    
    
    3.1
    
    
    
    3.1
    
    
    
    3.5Restructuring 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
    
    
    
    9.8Operating income (loss)
    
    
    7.5
    
    
    
    8.1
    
    
    
    4.6
    
    
    
    (4.1
    )
    
    
    (19.7
    )
    
    
    4.7
    
    
    
    9.4
    
    
    
    11.4Other 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
    )
    
    
    0.1Equity income (loss)
from investment in
equity investee
    
    
    (0.0
    )
    
    
    0.0
    
    
    
    (0.1
    )
    
    
    (0.3
    )
    
    
    (0.4
    )
    
    
    (0.1
    )
    
    
    0.0
    
    
    
    0.0Other non-operating
income (expenses), net
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.0
    
    
    
    (0.5
    )
    
    
    (1.1
    )
    
    
    0.0
    
    
    
    0.1
    
    
    
    0.0Total 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
    
    
    
    9.7Income 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
    
    
    
    8.9Net (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
     60




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61




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Total Borrowings
         62
    Table of Contents       Off-Balance Sheet Arrangements
  Contractual Obligations
  Payments DueWithin
    
    
    
    
    
    
    
    
    
    
    More Than1 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
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    150,0006.75% senior notes due 2011 (1)
    
    
    
    
    
    
    213,000
    
    
    
    
    
    
    
    
    
    
    
    213,0006% promissory note (1)
    
    
    10,000
    
    
    
    6,800
    
    
    
    
    
    
    
    
    
    
    
    16,800Long-term loans (1)
    
    
    8,786
    
    
    
    13,381
    
    
    
    
    
    
    
    
    
    
    
    22,167Short-term loans (1)
    
    
    56,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56,000Retirement benefits
    
    
    521
    
    
    
    1,346
    
    
    
    1,678
    
    
    
    6,126
    
    
    
    9,671Other non-current liabilities (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total on balance sheet commitments
    
    $
    225,307
    
    
    $
    234,527
    
    
    $
    1,678
    
    
    $
    6,126
    
    
    $
    467,638Off-balance sheet commitments:Operating leases
    
    $
    17,006
    
    
    $
    20,125
    
    
    $
    14,329
    
    
    $
    18,591
    
    
    $
    70,051Royalty/licensing agreements
    
    
    9,429
    
    
    
    18,314
    
    
    
    17,464
    
    
    
    157
    
    
    
    45,364Purchase obligations: Capital commitments
    
    
    78,876
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,876 Inventory purchase commitments
    
    
    41,433
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,433Total off-balance sheet commitments
    
    $
    146,744
    
    
    $
    38,439
    
    
    $
    31,793
    
    
    $
    18,748
    
    
    $
    235,724Total commitments
    
    $
    372,051
    
    
    $
    272,966
    
    
    $
    33,471
    
    
    $
    24,874
    
    
    $
    703,362
 63




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##### Table of Contents



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
      64
    Table of Contents          Cash Flows From Operating Activities
  65




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Cash Flows From Investing Activities
   Cash Flows From Financing Activities
  66




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Special Tax Status
  Derivative Financial Instruments
   Foreign Currency Risk
   Research and Development
  Recent Accounting Pronouncements
  67




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68




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ITEM 6.
    
    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 A. Directors and Senior Management
  Name
    
    Age
    
    PositionBoard of DirectorsCharles R. Wofford(1)(2)(3)(4)
    
    76
    
    Chairman of our Board of DirectorsTan Lay Koon
    
    51
    
    Director, President and Chief Executive OfficerPeter Seah Lim Huat(5)(6)
    
    63
    
    DirectorR. Douglas Norby(1)(5)(7)
    
    74
    
    DirectorTeng Cheong Kwee(1)(6)(8)(9)
    
    56
    
    DirectorTokumasa Yasui(1)(9)
    
    65
    
    DirectorRohit Sipahimalani (8)(10)
    
    43
    
    DirectorSenior ManagementWan Choong Hoe
    
    56
    
    Executive Vice President, Chief Operating OfficerHan Byung Joon
    
    50
    
    Executive Vice President, Chief Technology OfficerHal Lasky
    
    47
    
    Executive Vice President, Chief Sales OfficerJohn Lau Tai Chong
    
    50
    
    Senior Vice President, Chief Financial OfficerJanet 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. 69




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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.    Board of Directors
 Charles R. Wofford
  Tan Lay Koon
  Peter Seah Lim Huat
  70




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R. Douglas Norby
  Teng Cheong Kwee
  Tokumasa Yasui
  Rohit Sipahimalani
  Senior Management
 Wan Choong Hoe
  71




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Han Byung Joon
  Hal Lasky
  John Lau Tai Chong
  Janet T. Taylor
  72




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##### Table of Contents



B. Compensation
 Compensation of Directors and Senior Management
  Non-executiveDirectors (1)
    
    
    Total (2)Charles R. Wofford
    
    $
    130,000
    
    
    $
    130,000Peter Seah Lim Huat
    
    
    44,000
    
    
    
    44,000R. Douglas Norby
    
    
    67,000
    
    
    
    67,000Teng Cheong Kwee
    
    
    55,000
    
    
    
    55,000Tokumasa Yasui
    
    
    57,000
    
    
    
    57,000Phoon 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.  Number of Executive Directors and Key ExecutivesRemuneration Bands
    
    in Remuneration BandsS$2,500,000 to S$2,749,999
    
    
    1S$2,250,000 to S$2,499,999
    
    
    S$1,000,000 to S$1,249,999
    
    
    2S$750,000 to S$999,999
    
    
    1S$500,000 to S$749,999
    
    
    2S$250,000 to S$499,999
    
    
    Below S$250,000
    
    
    
 73




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##### Table of Contents



Fixed(%)(1)
    
    Variable(%)(2)
    
    TotalCEO and Executive DirectorTan Lay Koon
    
    
    37
    %
    
    
    63
    %
    
    
    100
    %Key ExecutivesHan Byung Joon
    
    
    60
    
    
    
    40
    
    
    
    100Wan Choong Hoe
    
    
    59
    
    
    
    41
    
    
    
    100Hal Lasky
    
    
    68
    
    
    
    32
    
    
    
    100John Lau Tai Chong
    
    
    70
    
    
    
    30
    
    
    
    100Janet 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. company-sponsored
     74




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Pension, Retirement or Similar Benefits
         75




---



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C. Board Practices
 Board of Directors
    76




---



##### Table of Contents



Committees of our Board of Directors
 Audit Committee
     Executive Resource and Compensation Committee
      77




---



##### Table of Contents




    
    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).
  Executive Committee
    Nominating and Corporate Governance Committee
   
    
    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);
 78




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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.
  D. Employees
     December 30,
    
    December 28,
    
    December 27,
    
    February 1,2007
    
    2008
    
    2009
    
    2010Function:Direct and indirect labor (manufacturing)
    
    
    13,764
    
    
    
    12,096
    
    
    
    10,282
    
    
    
    10,307Indirect labor (administration)
    
    
    809
    
    
    
    669
    
    
    
    598
    
    
    
    575Research and development
    
    
    300
    
    
    
    293
    
    
    
    295
    
    
    
    297Total
    
    
    14,873
    
    
    
    13,058
    
    
    
    11,175
    
    
    
    11,179Location:Singapore
    
    
    3,288
    
    
    
    3,032
    
    
    
    2,480
    
    
    
    2,474China
    
    
    3,829
    
    
    
    3,456
    
    
    
    3,391
    
    
    
    3,454Malaysia
    
    
    2,900
    
    
    
    1,870
    
    
    
    1,379
    
    
    
    1,339South Korea
    
    
    2,698
    
    
    
    2,618
    
    
    
    2,043
    
    
    
    2,016Taiwan
    
    
    590
    
    
    
    580
    
    
    
    576
    
    
    
    573Thailand
    
    
    1,296
    
    
    
    1,288
    
    
    
    1,132
    
    
    
    1,147United States
    
    
    252
    
    
    
    199
    
    
    
    159
    
    
    
    161Others
    
    
    20
    
    
    
    15
    
    
    
    15
    
    
    
    15Total
    
    
    14,873
    
    
    
    13,058
    
    
    
    11,175
    
    
    
    11,179
 E. Share Ownership for Directors and Senior Management
   79




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Share Options for Directors
  Number of Ordinary Shares
    
    Per Share ExerciseIssuable on Exercise of Option
    
    Price (S$)
    
    Exercisable PeriodTan Lay Koon
    
    
    700,000
    
    
    
    2.826
    
    
    10/19/2001 to 10/18/2010325,000
    
    
    
    2.885
    
    
    04/29/2003 to 04/28/20122,000,000
    
    
    
    2.2
    
    
    06/26/2003 to 06/25/2012700,000
    
    
    
    1.99
    
    
    08/06/2004 to 08/05/2013500,000
    
    
    
    1.91
    
    
    02/17/2005 to 02/16/2014Peter Seah Lim Huat
    
    
    70,000
    
    
    
    1.99
    
    
    08/06/2004 to 08/05/201335,000
    
    
    
    1.91
    
    
    02/17/2005 to 02/16/2014
 STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors
      Employees Share Ownership Schemes
   80




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STATS ChipPAC Ltd. Performance Share Plan 2009
 well-being
      STATS ChipPAC Ltd. Restricted Share Plan
    81




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##### Table of Contents



STATS ChipPAC Ltd. Employee Share Purchase Plan 2004
      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)
   82




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##### Table of Contents



STATS ChipPAC Share Option Plan, as amended
        Limits under the SGX-ST Listing Manual on the Issue of Shares Pursuant to our Share Plans
  
 ITEM 7.
    
    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 A. Major Shareholders
   
    
    the election of directors;
    
    the merger or consolidation of us with any other entity;
 83




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##### Table of Contents




    
    any sale of all or substantially all of our assets; and
    
    the timing and payment of dividends.
  Number of Shares
    
    PercentageName of Beneficial Owner
    
    Beneficially Owned
    
    Beneficially OwnedTemasek(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.  
    
    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.
   84




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B. Related Party Transactions
    wholly-owned
   85




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C. Interest of Experts and Counsel
  
 ITEM 8.
    
    FINANCIAL INFORMATION
 A. Consolidated Statements and Other Financial Information
  Legal Proceedings
     86




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Dividend Policy
  B. Significant Changes
  
 ITEM 9.
    
    THE OFFER AND LISTING
 A. Offer and Listing Details
 Price range of our ordinary shares
  Price per
    
    Price perOrdinary Share
    
    ADS onon the SGX-ST
    
    Nasdaq(1)(2)(in S$)
    
    (in $)High
    
    Low
    
    High
    
    LowAnnual for 2005
    
    
    1.34
    
    
    
    0.88
    
    
    
    8.16
    
    
    
    5.30Annual for 2006
    
    
    1.42
    
    
    
    0.84
    
    
    
    8.85
    
    
    
    4.91Annual for 2007
    
    
    1.88
    
    
    
    1.14
    
    
    
    12.79
    
    
    
    7.26
 87




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##### Table of Contents



Price per
    
    Price perOrdinary Share
    
    ADS onon the SGX-ST
    
    Nasdaq(1)(2)(in S$)
    
    (in $)High
    
    Low
    
    High
    
    LowAnnual 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
  C. Markets
  D. Selling Shareholders
  E. Dilution
  F. Expenses of the Issue
  
 ITEM 10.
    
    ADDITIONAL INFORMATION
 A. Share Capital
  88




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B. Memorandum and Articles of Association
  Objects
   Board of Directors
       Ordinary Shares
    89




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##### Table of Contents



New Ordinary Shares
  Shareholders
  Transfer of Ordinary Shares
  General Meetings of Shareholders
  90




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##### Table of Contents



Voting Rights
  Dividends
  Bonus and Rights Issue
  Take-Overs
   91




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##### Table of Contents



Liquidation or Other Return of Capital
  Indemnity
  Limitations on Rights to Hold or Vote Shares
  Substantial Shareholdings
    92




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##### Table of Contents



Minority Rights
   C. Material Contracts
    93




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94




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##### Table of Contents



95




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96




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##### Table of Contents



D. Exchange Controls
  Exchange Rates
   Singapore Dollars per US$1.00 Closing RateAverage (1)
    
    Low
    
    High
    
    Period EndFiscal Year2005
    
    
    1.66
    
    
    
    1.62
    
    
    
    1.71
    
    
    
    1.662006
    
    
    1.59
    
    
    
    1.53
    
    
    
    1.67
    
    
    
    1.532007
    
    
    1.51
    
    
    
    1.44
    
    
    
    1.55
    
    
    
    1.452008
    
    
    1.41
    
    
    
    1.34
    
    
    
    1.53
    
    
    
    1.452009
    
    
    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. 97




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Singapore Dollars per US$1.00 Closing RateAverage (1)
    
    Low
    
    High
    
    Period EndMonthSeptember 2009
    
    
    1.42
    
    
    
    1.41
    
    
    
    1.45
    
    
    
    1.41October 2009
    
    
    1.40
    
    
    
    1.38
    
    
    
    1.42
    
    
    
    1.40November 2009
    
    
    1.39
    
    
    
    1.38
    
    
    
    1.40
    
    
    
    1.38December 2009
    
    
    1.40
    
    
    
    1.38
    
    
    
    1.41
    
    
    
    1.41January 2010
    
    
    1.40
    
    
    
    1.38
    
    
    
    1.41
    
    
    
    1.40February 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.  E. Taxation
 Singapore Taxation
  Income Tax
    98




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##### Table of Contents



Dividend Distributions
   Tax on Capital Gains
   Stamp Duty
   Estate Duty
  United States Federal Income Taxation
  99




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##### Table of Contents



Distributions on Ordinary Shares
     Sale or Exchange of the Ordinary Shares
  Passive Foreign Investment Company
   100




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##### Table of Contents




    
    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.
  de minimis
 United States Information Reporting and Backup Withholding
   F. Dividends and Paying Agents
  G. Statements by Experts
  H. Documents on Display
  101




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##### Table of Contents



I. Subsidiary Information
  
 ITEM 11.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Investment and Interest Rates
  Currency Exchange Rates
     102




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##### Table of Contents



Commodity Price
  Limitations
  
 ITEM 12.
    
    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  
 ITEM 13.
    
    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14.
    
    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
  
 ITEM 15.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Managements Annual Report on Internal Control over Financial Reporting
  103




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##### Table of Contents




    
    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.
     Changes to Internal Controls
  
 ITEM 16A.
    
    AUDIT COMMITTEE FINANCIAL EXPERT
  
 ITEM 16B.
    
    CODE OF ETHICS
  104




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##### Table of Contents



ITEM 16C.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
    Year EndedDecember 28,
    
    
    December 27,2008
    
    
    2009(In thousands)Audit fees
    
    $
    1,679
    
    
    $
    1,223Audit-related fees
    
    
    227
    
    
    
    35Tax fees
    
    
    104
    
    
    
    93All other fees
    
    
    
    
    
    
    Total
    
    $
    2,010
    
    
    $
    1,351
 Audit Fees.
 Audit-Related Fees.
 Tax Fees.
 105




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##### Table of Contents



All Other Fees.
 Audit Committee Pre-approval Process
 de
minimus
 
 ITEM 16D.
    
    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE
  
 ITEM 16E.
    
    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  
 ITEM 16F.
    
    CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
  
 ITEM 16G.
    
    CORPORATE GOVERNANCE
  
 ITEM 17.
    
    FINANCIAL STATEMENTS
  
 ITEM 18.
    
    FINANCIAL STATEMENTS
        106




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##### Table of Contents



ITEM 19.
    
    EXHIBITS
  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, 20071.2.**
    
    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, 20062.1.1
    
    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, 20064.1
    
    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, 20004.2#
    
    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, 20044.3
    
    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, 20084.4
    
    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, 20044.5
    
    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, 20044.6
    
    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, 20044.7
    
    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, 20044.8
    
    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, 20044.9
    
    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, 20044.10
    
    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, 20044.11
    
    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, 20044.12
    
    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, 20054.13
    
    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, 20054.14
    
    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, 20064.15
    
    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, 20084.16
    
    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




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##### Table of Contents



Ltd., as filed with the SEC on August 25, 20054.17
    
    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, 20054.18
    
    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, 20064.19
    
    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, 20084.20
    
    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, 20044.21
    
    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, 20044.22
    
    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, 20074.23
    
    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, 20064.24**
    
    STATS ChipPAC Ltd. Performance Share Plan 20094.25**
    
    STATS ChipPAC Ltd. Equity Grant Plan for Non-Executive Directors4.26
    
    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, 20064.27
    
    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, 20074.28
    
    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, 20084.29
    
    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, 20074.30
    
    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, 20074.31
    
    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, 20074.32
    
    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, 20074.33
    
    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,
20074.34
    
    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, 20074.35
    
    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, 20074.36
    
    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, 20074.37
    
    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




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##### Table of Contents



as filed with the SEC on March 12, 20074.38
    
    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, 20084.39
    
    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, 20084.40
    
    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, 20084.41
    
    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, 20084.42
    
    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, 20084.43
    
    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, 20084.44**
    
    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 Ltd8.1
    
    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, 200912.1**
    
    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 200212.2**
    
    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 200213.1**
    
    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 200213.2**
    
    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 200215.1**
    
    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




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##### Table of Contents



SIGNATURES
   STATS CHIPPAC LTD.By:
    /s/ Tan Lay KoonName
    Tan Lay KoonTitle:
    President and Chief Executive OfficerBy:
    /s/ John Lau Tai ChongName:
    John Lau Tai ChongTitle:
    Chief Financial Officer 110




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##### 



STATS CHIPPAC LTD. AND SUBSIDIARIES
 
 INDEX TO FINANCIAL STATEMENTS
  
 PageFINANCIAL STATEMENTSReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets
    
    
    F-3Consolidated Statements of Operations
    
    
    F-4Consolidated Statements of Equity and Comprehensive Income
    
    
    F-5Consolidated Statements of Cash Flows
    
    
    F-7Notes to the Consolidated Financial Statements
    
    
    F-8
  F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 
 F-2




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS

In thousands of U.S. Dollars (except per share data)
 December 28,
    
    
    December 27,Note
    
    2008
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    3
    
    $
    295,916
    
    
    $
    288,683Short-term marketable securities
    
    4
    
    
    41,314
    
    
    
    62,512Accounts receivable, net
    
    5
    
    
    139,520
    
    
    
    208,766Short-term amounts due from affiliates
    
    2
    
    
    10,791
    
    
    
    20,895Other receivables
    
    6
    
    
    8,357
    
    
    
    11,555Inventories
    
    7
    
    
    60,717
    
    
    
    61,859Prepaid expenses and other current assets
    
    8
    
    
    14,693
    
    
    
    19,765Total current assets
    
    
    
    
    571,308
    
    
    
    674,035Long-term marketable securities
    
    4
    
    
    15,587
    
    
    
    16,929Long-term amounts due from affiliates
    
    2
    
    
    13,726
    
    
    
    Property, plant and equipment, net
    
    9
    
    
    1,216,342
    
    
    
    1,115,497Investment in equity investee
    
    2
    
    
    9,001
    
    
    
    7,743Intangible assets
    
    10
    
    
    44,762
    
    
    
    39,993Goodwill
    
    11
    
    
    551,132
    
    
    
    551,132Long-term restricted cash
    
    
    
    
    1,012
    
    
    
    384Prepaid expenses and other non-current assets
    
    8
    
    
    24,193
    
    
    
    21,227Total assets
    
    
    
    $
    2,447,063
    
    
    $
    2,426,940LIABILITIES AND EQUITYCurrent liabilities:Accounts and other payable
    
    
    
    $
    118,227
    
    
    $
    133,532Payables related to property, plant and equipment purchases
    
    
    
    
    30,704
    
    
    
    49,172Accrued operating expenses
    
    12
    
    
    148,069
    
    
    
    100,997Income taxes payable
    
    
    
    
    3,379
    
    
    
    2,380Short-term borrowings
    
    14
    
    
    50,000
    
    
    
    56,000Short-term amounts due to affiliates
    
    2
    
    
    1,388
    
    
    
    17Current installments of long-term debts
    
    15
    
    
    26,953
    
    
    
    168,786Total current liabilities
    
    
    
    
    378,720
    
    
    
    510,884Long-term debts, excluding current installments
    
    15
    
    
    396,500
    
    
    
    233,181Other non-current liabilities
    
    17
    
    
    64,144
    
    
    
    59,329Total liabilities
    
    
    
    
    839,364
    
    
    
    803,394STATS ChipPAC Ltd. Shareholders Equity:Ordinary shares  Issued ordinary shares
 2,202,218,293 in 2008 and 2009
    
    18, 19
    
    
    2,035,235
    
    
    
    2,035,573Accumulated 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
    
    
    
    1,564,669Noncontrolling interest
    
    
    
    
    59,042
    
    
    
    58,877Total equity
    
    
    
    
    1,607,699
    
    
    
    1,623,546Commitments and contingencies
    
    21Total liabilities and equity
    
    
    
    $
    2,447,063
    
    
    $
    2,426,940
  F-3




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands of U.S. Dollars (except per share data)
 Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,Note
    
    2007
    
    
    2008
    
    
    2009Net revenues
    
    
    
    $
    1,651,560
    
    
    $
    1,658,188
    
    
    $
    1,325,685Cost of revenues
    
    
    
    
    (1,330,284
    )
    
    
    (1,383,797
    )
    
    
    (1,117,308
    )Gross profit
    
    
    
    
    321,276
    
    
    
    274,391
    
    
    
    208,377Operating expenses:Selling, general and administrative
    
    
    
    
    112,593
    
    
    
    118,337
    
    
    
    95,516Research and development
    
    
    
    
    34,918
    
    
    
    37,825
    
    
    
    43,358Restructuring charges
    
    22
    
    
    990
    
    
    
    19,790
    
    
    
    16,072Equipment 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
    
    
    
    154,946Operating income
    
    
    
    
    160,128
    
    
    
    75,786
    
    
    
    53,431Other income (expense), net:Interest income
    
    
    
    
    7,258
    
    
    
    5,685
    
    
    
    2,169Interest 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
    
    
    
    14,738Income tax expense
    
    13
    
    
    (29,581
    )
    
    
    (19,172
    )
    
    
    (3,712
    )Net income
    
    
    
    
    99,502
    
    
    
    30,150
    
    
    
    11,026Less: Net income attributable to the
noncontrolling interest
    
    
    
    
    (5,818
    )
    
    
    (4,448
    )
    
    
    (973
    )Net income attributable to
STATS ChipPAC Ltd.
    
    
    
    $
    93,684
    
    
    $
    25,702
    
    
    $
    10,053Net income per ordinary share attributable to
STATS ChipPAC Ltd.: basic
    
    
    
    $
    0.05
    
    
    $
    0.01
    
    
    $
    0.00 diluted
    
    
    
    $
    0.04
    
    
    $
    0.01
    
    
    $
    0.00Net 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
    
    
    
    2,202,230ADS (in thousands) used in per ADS calculation: basic
    
    
    
    
    203,296
    
    
    
    
    
    
    
     diluted
    
    
    
    
    218,869
    
    
    
    
    
    
    
    
  F-4




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##### Table of Contents



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 EquityOther
    
    
    
    
    
    Attributable toComprehensive
    
    
    
    
    
    
    
    
    
    Comprehensive
    
    Accumulated
    
    STATS ChipPAC
    
    NoncontrollingIncome
    
    Ordinary Shares
    
    Loss
    
    Deficit
    
    Ltd.
    
    Interest
    
    Total EquityNo.(In thousands)Balances at December 31, 2006
    
    
    
    
    
    
    2,002,814
    
    
    
    1,847,002
    
    
    
    (7,714
    )
    
    
    (593,138
    )
    
    
    1,246,150
    
    
    
    57,946
    
    
    
    1,304,096Adjustment 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
    
    
    
    1,303,578Share issuances
    
    
    
    
    
    
    27,794
    
    
    
    19,851
    
    
    
    
    
    
    
    
    
    
    
    19,851
    
    
    
    
    
    
    
    19,851Conversion of convertible subordinated notes
    
    
    
    
    
    
    16,726
    
    
    
    15,500
    
    
    
    
    
    
    
    
    
    
    
    15,500
    
    
    
    
    
    
    
    15,500Share-based compensation
    
    
    
    
    
    
    
    
    
    
    8,869
    
    
    
    
    
    
    
    
    
    
    
    8,869
    
    
    
    
    
    
    
    8,869Effect of subsidiarys equity transaction
    
    
    
    
    
    
    
    
    
    
    324
    
    
    
    
    
    
    
    
    
    
    
    324
    
    
    
    774
    
    
    
    1,098Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,883
    )
    
    
    (5,883
    )Comprehensive income:Net income
    
    
    99,502
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,684
    
    
    
    93,684
    
    
    
    5,818
    
    
    
    99,502Other comprehensive income (loss) :Unrealized gain on available-for-sale marketable securities
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    9Realized loss on available-for-sale marketable securities
    
    
    131
    
    
    
    
    
    
    
    
    
    
    
    131
    
    
    
    
    
    
    
    131
    
    
    
    
    
    
    
    131Unrealized loss on hedging instruments
    
    
    1,736
    
    
    
    
    
    
    
    
    
    
    
    1,736
    
    
    
    
    
    
    
    1,736
    
    
    
    
    
    
    
    1,736Realized 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
    
    
    
    1,409Other comprehensive income
    
    
    1,251Comprehensive income attributable to the noncontrolling interest
    
    
    (6,960
    )Comprehensive income attributable to STATS ChipPAC Ltd.
    
    
    93,793Balance at December 30, 2007
    
    
    
    
    
    
    2,047,334
    
    
    
    1,891,546
    
    
    
    (7,605
    )
    
    
    (499,972
    )
    
    
    1,383,969
    
    
    
    59,797
    
    
    
    1,443,766
  F-5




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##### Table of Contents



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 EquityOther
    
    
    
    
    
    Attributable toComprehensive
    
    
    
    
    
    
    
    
    
    Comprehensive
    
    Accumulated
    
    STATS ChipPAC
    
    NoncontrollingIncome
    
    Ordinary Shares
    
    Loss
    
    Deficit
    
    Ltd.
    
    Interest
    
    Total EquityNo.(In thousands)Share issuances
    
    
    
    
    
    
    9,745
    
    
    
    7,833
    
    
    
    
    
    
    
    
    
    
    
    7,833
    
    
    
    
    
    
    
    7,833Conversion of convertible subordinated notes
    
    
    
    
    
    
    145,139
    
    
    
    134,500
    
    
    
    
    
    
    
    
    
    
    
    134,500
    
    
    
    
    
    
    
    134,500Share-based compensation
    
    
    
    
    
    
    
    
    
    
    3,570
    
    
    
    
    
    
    
    
    
    
    
    3,570
    
    
    
    
    
    
    
    3,570Effect of subsidiarys equity transaction
    
    
    
    
    
    
    
    
    
    
    (60
    )
    
    
    
    
    
    
    
    
    
    
    (60
    )
    
    
    247
    
    
    
    187Dividends 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
    
    
    
    30,150Other comprehensive income (loss)Unrealized gain on available-for-sale marketable securities
    
    
    327
    
    
    
    
    
    
    
    
    
    
    
    327
    
    
    
    
    
    
    
    327
    
    
    
    
    
    
    
    327Realized 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
    
    
    
    
    
    
    
    9,972Foreign 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.
    
    
    20,999Balance at December 28, 2008
    
    
    
    
    
    
    2,202,218
    
    
    
    2,035,235
    
    
    
    (12,308
    )
    
    
    (474,270
    )
    
    
    1,548,657
    
    
    
    59,042
    
    
    
    1,607,699Share-based compensation
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Effect of subsidiarys equity transaction
    
    
    
    
    
    
    
    
    
    
    334
    
    
    
    
    
    
    
    
    
    
    
    334
    
    
    
    (202
    )
    
    
    132Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,248
    )
    
    
    (2,248
    )Comprehensive income:Net income
    
    
    11,026
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,053
    
    
    
    10,053
    
    
    
    973
    
    
    
    11,026Other comprehensive income (loss)Unrealized gain on available-for-sale marketable securities
    
    
    849
    
    
    
    
    
    
    
    
    
    
    
    849
    
    
    
    
    
    
    
    849
    
    
    
    
    
    
    
    849Realized 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
    
    
    
    
    
    
    
    5,649Foreign currency translation adjustment
    
    
    2,661
    
    
    
    
    
    
    
    
    
    
    
    1,349
    
    
    
    
    
    
    
    1,349
    
    
    
    1,312
    
    
    
    2,661Other comprehensive income
    
    
    6,933Comprehensive income attributable to the noncontrolling interest
    
    
    (2,285
    )Comprehensive income attributable to STATS ChipPAC Ltd.
    
    
    15,674Balance at December 27, 2009
    
    
    
    
    
    
    2,202,218
    
    
    
    2,035,573
    
    
    
    (6,687
    )
    
    
    (464,217
    )
    
    
    1,564,669
    
    
    
    58,877
    
    
    
    1,623,546
  F-6




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 In thousands of U.S. Dollars
 Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009Cash Flows From Operating ActivitiesNet income attributable to STATS ChipPAC Ltd.
    
    $
    93,684
    
    
    $
    25,702
    
    
    $
    10,053Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    254,352
    
    
    
    283,691
    
    
    
    266,630Amortization of leasing prepayments
    
    
    11
    
    
    
    
    
    
    
    Debt issuance cost amortization
    
    
    2,561
    
    
    
    2,737
    
    
    
    1,719Equipment impairment
    
    
    
    
    
    
    21,091
    
    
    
    (Gain) loss on sale of property, plant and equipment
    
    
    (17
    )
    
    
    1,123
    
    
    
    1,212Held 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
    )
    
    
    965Share-based compensation expense
    
    
    8,869
    
    
    
    3,570
    
    
    
    501Deferred income taxes
    
    
    (3,675
    )
    
    
    5,511
    
    
    
    1,725Net income attributable to the noncontrolling interest
    
    
    5,818
    
    
    
    4,448
    
    
    
    973Equity loss (income) from investment in equity investee
    
    
    (102
    )
    
    
    1,437
    
    
    
    1,321Others
    
    
    1,604
    
    
    
    4,178
    
    
    
    1,414Changes in operating working capital:Accounts receivable
    
    
    (27,581
    )
    
    
    131,840
    
    
    
    (69,246
    )Amounts due from affiliates
    
    
    (13,638
    )
    
    
    (8,373
    )
    
    
    3,622Inventories
    
    
    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
    
    
    
    174,872Cash Flows From Investing ActivitiesProceeds from sales of marketable securities
    
    $
    19,660
    
    
    $
    29,755
    
    
    $
    15,663Proceeds from maturity of marketable securities
    
    
    23,599
    
    
    
    50,141
    
    
    
    31,736Purchases 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
    
    
    
    593Others, net
    
    
    2,324
    
    
    
    2,146
    
    
    
    946Net cash used in investing activities
    
    
    (299,088
    )
    
    
    (283,714
    )
    
    
    (164,482
    )Cash Flows From Financing ActivitiesRepayment 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
    
    
    
    603Grants 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
    
    
    
    295,916Cash and cash equivalents at end of the year
    
    $
    213,461
    
    
    $
    295,916
    
    
    $
    288,683Supplementary Cash Flow InformationInterest paid
    
    $
    31,652
    
    
    $
    31,497
    
    
    $
    28,430Income taxes paid
    
    
    6,158
    
    
    
    14,280
    
    
    
    10,735Non-cash itemsIssuance of shares on conversion of convertible notes
    
    $
    15,500
    
    
    $
    134,500
    
    
    $
    
  F-7




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##### Table of Contents



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
    Proposed Capital Reduction Exercise and Related Financing Transaction
    Acquisition of LSI Corporations assembly and test facility in Thailand
  F-8




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##### Table of Contents



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
     (b) Fiscal Year
  (c) Accounting Principles
  (d) Principles of Consolidation and Basis of Presentation
  (e) Issuances of Stock by Subsidiaries
  F-9




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##### Table of Contents



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
  (g) Foreign Currency Transactions
   (h) Certain Risks and Concentrations
   F-10




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
    (i) Cash and Cash Equivalents
  (j) Restricted Cash
  (k) Derivative Instruments and Hedging Activities
    F-11




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
   December 27, 2009AccruedOther
    
    operatingreceivables
    
    expensesDerivatives designated as hedging instrumentsForeign currency forward contracts
    
    $
    
    
    
    $
    680Derivatives not designated as hedging instrumentsForeign currency forward contracts
    
    $
    
    
    
    $
    
 Derivative in Accounting Standard Codification (ASC) No. 815, Derivatives and Hedging
  Year Ended December 27, 2009Location of
    
    
    
    
    
    Location of
    
    Location ofGain (Loss)
    
    Gain (Loss)
    
    Gain (Loss)
    
    Gain (Loss)
    
    Gain (Loss)Recognized
    
    Reclassified
    
    Reclassified
    
    Reclassifed
    
    Reclassifiedin OCI on
    
    from OCI into
    
    from OCI into
    
    from OCI into
    
    from OCI intoDerivative
    
    Income 
    
    Income 
    
    Income 
    
    Income  Effective
    
    Effective
    
    Effective
    
    Ineffective
    
    IneffectivePortion
    
    Portion
    
    Portion
    
    Portion
    
    PortionCost 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
  F-12




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
   (m) Inventories
  (n) Equity Method Investments
  (o) Business Combination
  (p) Goodwill
   F-13




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  (q) Intangible Assets
   Tradenames
    
    7 yearsTechnology and intellectual property
    
    10 yearsCustomer relationships
    
    2 yearsSoftware and licenses
    
    3 to 5 years
 (r) Property, Plant and Equipment
  Land use rights
    
    50 to 99 yearsBuilding, mechanical and electrical installation
    
    3 to 25 yearsEquipment
    
    2 to 8 years
  straight-line
 (s) Long-Lived Assets
  F-14




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
   (t) Comprehensive Income (Loss)
  (u) Revenue Recognition
      Year EndedDecember 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009Revenue packaging  laminate
    
    
    56.3
    %
    
    
    56.5
    %
    
    
    57.9
    % packaging  leaded
    
    
    18.4
    
    
    
    18.0
    
    
    
    15.1 test and other services
    
    
    25.3
    
    
    
    25.5
    
    
    
    27.0Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 F-15




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  (v) Grants
    (w) Share-Based Compensation
  (x) Employee Benefit Plans
   F-16




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
     (y) Operating Leases
  (z) Product Warranties
  (aa) Research and Development
  (bb) Income Taxes
  F-17




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
    (cc) Net Income (Loss) Per Share
    December 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009Convertible notes
    
    
    10,613
    
    
    
    
    
    
    
    Share plans
    
    
    15,609
    
    
    
    14,310
    
    
    
    12,471
  Year EndedDecember 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009Net income
    
    $
    93,684
    
    
    $
    25,702
    
    
    $
    10,053Net income excluding convertible bond interest expense
    
    
    95,702
    
    
    
    25,702
    
    
    
    10,053Weighted average number
of ordinary shares outstanding (basic)
    
    
    2,032,962
    
    
    
    2,143,934
    
    
    
    2,202,218Weighted average dilutive shares from share plans
    
    
    10,581
    
    
    
    2,315
    
    
    
    12
 F-18




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
 Year EndedDecember 30,
    
    December 28,
    
    December 27,2007
    
    2008
    
    2009Weighted 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
  (ee) New Accounting Pronouncements
   F-19




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
      F-20




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  2. Related Party Transactions
       December 28,
    
    
    December 27,2008
    
    
    2009Short-term amounts due from affiliates, accounts
receivable, net of allowance for sales returns
    
    $
    1,955
    
    
    $
    1,413Receivables on assets transfer due from affiliate
    
    
    22,562
    
    
    
    19,482$
    24,517
    
    
    $
    20,895Short-term amounts due to affiliatesAccounts payable
    
    $
    (1,388
    )
    
    $
    (17
    )
 F-21




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
   3. Cash and Cash Equivalents
  December 28,
    
    
    December 27,2008
    
    
    2009Cash at banks and on hand
    
    $
    88,800
    
    
    $
    124,734Cash equivalentsBank fixed deposits
    
    
    141,924
    
    
    
    100,361Money market funds
    
    
    65,192
    
    
    
    63,588$
    295,916
    
    
    $
    288,683
 4. Marketable Securities
  December 28,
    
    
    December 27,2008
    
    
    2009Available-for-sale corporate debt securities and bank fixed deposits
    
    $
    57,507
    
    
    $
    79,208Gross unrealized gains
    
    
    
    
    
    
    233Gross unrealized losses
    
    
    (606
    )
    
    
    Fair value
    
    $
    56,901
    
    
    $
    79,441
  December 28,
    
    
    December 27,2008
    
    
    2009Marketable securities:Due in one year or less
    
    $
    41,314
    
    
    $
    62,512Due after one year through five years
    
    
    15,587
    
    
    
    16,929$
    56,901
    
    
    $
    79,441
  F-22




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##### Table of Contents



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
  December 28,
    
    
    December 27,2008
    
    
    2009Accounts receivable  third parties
    
    $
    145,628
    
    
    $
    214,022Allowance for sales returns
    
    
    (6,108
    )
    
    
    (5,256
    )$
    139,520
    
    
    $
    208,766
  Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009Beginning
    
    $
    3,406
    
    
    $
    6,268
    
    
    $
    6,108Utilized during the year
    
    
    (98
    )
    
    
    (4,122
    )
    
    
    (949
    )Charged during the year
    
    
    4,681
    
    
    
    4,144
    
    
    
    2,359Writeback during the year
    
    
    (1,721
    )
    
    
    (182
    )
    
    
    (2,262
    )Ending
    
    $
    6,268
    
    
    $
    6,108
    
    
    $
    5,256
 6. Other Receivables
  December 28,
    
    
    December 27,2008
    
    
    2009Deposits and staff advances
    
    $
    911
    
    
    $
    1,294Taxes receivable
    
    
    833
    
    
    
    1,001Grants receivables
    
    
    117
    
    
    
    421Other receivables
    
    
    6,496
    
    
    
    8,839$
    8,357
    
    
    $
    11,555
 7. Inventories
  December 28,
    
    
    December 27,2008
    
    
    2009Raw materials
    
    $
    50,775
    
    
    $
    49,165Work-in-progress
    
    
    8,328
    
    
    
    11,379Finished goods
    
    
    1,614
    
    
    
    1,315$
    60,717
    
    
    $
    61,859
 F-23




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##### Table of Contents



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
  December 28,
    
    
    December 27,2008
    
    
    2009Debt issuance cost, net of accumulated amortization
    
    $
    
    
    
    $
    464Other prepayments and assets
    
    
    9,999
    
    
    
    14,220Deferred income tax assets
    
    
    4,694
    
    
    
    5,081$
    14,693
    
    
    $
    19,765
  December 28,
    
    
    December 27,2008
    
    
    2009Deferred income tax assets
    
    $
    13,095
    
    
    $
    15,841Other deposits
    
    
    295
    
    
    
    276Debt issuance cost, net of accumulated amortization
    
    
    4,212
    
    
    
    2,006Assets held for sale
    
    
    43
    
    
    
    Others
    
    
    6,548
    
    
    
    3,104$
    24,193
    
    
    $
    21,227
 9. Property, Plant and Equipment
  December 28,
    
    
    December 27,2008
    
    
    2009Cost:Freehold land
    
    $
    10,703
    
    
    $
    10,833Land and land use rights
    
    
    19,864
    
    
    
    19,864Buildings, mechanical and electrical installation
    
    
    269,046
    
    
    
    278,492Equipment
    
    
    2,216,667
    
    
    
    2,255,290Total cost
    
    $
    2,516,280
    
    
    $
    2,564,479Total accumulated depreciation
    
    
    (1,299,938
    )
    
    
    (1,448,982
    )Property, plant and equipment, net
    
    $
    1,216,342
    
    
    $
    1,115,497
    F-24




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
    10. Intangible Assets
  December 28,
    
    
    December 27,2008
    
    
    2009Cost:Tradenames
    
    $
    7,700
    
    
    $
    7,700Technology and intellectual property
    
    
    32,000
    
    
    
    32,000Customer relationships
    
    
    99,300
    
    
    
    99,300Patent costs, software, licenses and others
    
    
    43,990
    
    
    
    47,905Total cost
    
    $
    182,990
    
    
    $
    186,905Total accumulated amortization
    
    
    (138,228
    )
    
    
    (146,912
    )Intangible assets, net
    
    $
    44,762
    
    
    $
    39,993
  Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009Tradenames
    
    $
    1,100
    
    
    $
    1,100
    
    
    $
    1,100Technology and intellectual property
    
    
    3,200
    
    
    
    3,200
    
    
    
    3,200Patent costs, software, licenses and others
    
    
    3,498
    
    
    
    4,347
    
    
    
    5,278$
    7,798
    
    
    $
    8,647
    
    
    $
    9,578
  2010
    
    $
    8,0712011
    
    
    7,1242012
    
    
    5,5982013
    
    
    4,3082014
    
    
    4,886Thereafter
    
    
    10,006Total
    
    $
    39,993
 F-25




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
 11. Goodwill
  December 28,
    
    
    December 27,2008
    
    
    2009Beginning
    
    $
    547,958
    
    
    $
    551,132Purchase adjustments
    
    
    3,174
    
    
    
    Ending
    
    $
    551,132
    
    
    $
    551,132
    12. Accrued Operating Expenses
  December 28,
    
    
    December 27,2008
    
    
    2009Staff costs and accrued restructuring charges
    
    $
    49,224
    
    
    $
    42,304Purchase of raw materials
    
    
    4,636
    
    
    
    12,993Maintenance fees, license fees and royalties
    
    
    5,025
    
    
    
    3,488Interest expense
    
    
    7,536
    
    
    
    7,339Provision for vacation liability
    
    
    4,697
    
    
    
    1,859Liability for uncertain tax positions
    
    
    34,621
    
    
    
    4,223Others
    
    
    42,330
    
    
    
    28,791$
    148,069
    
    
    $
    100,997
 F-26




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##### Table of Contents



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
  Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009Singapore
    
    $
    (9,416
    )
    
    $
    (9,652
    )
    
    $
    207Foreign
    
    
    138,499
    
    
    
    58,974
    
    
    
    14,531$
    129,083
    
    
    $
    49,322
    
    
    $
    14,738
  Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009Current 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
    )
  Year EndedDecember 30,
2007
    
    
    December 28,
2008
    
    
    December 27,2009Income tax expense computed at Singapore statutory rate of
17.0% (2008 and 2007: 18.0%)
    
    $
    23,235
    
    
    $
    8,878
    
    
    $
    2,505Non-deductible expenses
    
    
    4,948
    
    
    
    9,018
    
    
    
    8,944Non-taxable income, including income exemption
    
    
    (1,558
    )
    
    
    (9,287
    )
    
    
    (13,193
    )Differences in tax rates, including undistributed earnings
    
    
    10,239
    
    
    
    7,411
    
    
    
    10,351Effect 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
    
    
    
    
    
    
    
    3,142Tax 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
    )
    
    
    7,101Unrecognized tax benefits and other items, net
    
    
    3,465
    
    
    
    185
    
    
    
    343Income tax expense
    
    $
    29,581
    
    
    $
    19,172
    
    
    $
    3,712
 F-27




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  December 28,
    
    
    December 27,2008
    
    
    2009Deferred income tax assets:Operating loss carryforwards
    
    $
    26,335
    
    
    $
    25,497Investment, and research and development tax credits
    
    
    50,609
    
    
    
    53,074Reinvestment allowance
    
    
    40,876
    
    
    
    42,405Property, plant and equipment
    
    
    42,312
    
    
    
    35,635Others
    
    
    15,051
    
    
    
    11,604175,183
    
    
    
    168,215Valuation allowance
    
    
    (157,394
    )
    
    
    (147,293
    )$
    17,789
    
    
    $
    20,922Deferred income tax liabilities:Property, plant and equipment
    
    $
    27,212
    
    
    $
    32,390Allowances and reserves
    
    
    1,989
    
    
    
    1,669$
    29,201
    
    
    $
    34,059Net deferred income tax assets (liabilities)
    
    $
    (11,412
    )
    
    $
    (13,137
    )
     F-28




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
     December 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009Unrecognized tax benefits:Beginning
    
    $
    518
    
    
    $
    21,422
    
    
    $
    42,120Increases related to prior year tax positions
    
    
    13,521
    
    
    
    24,211
    
    
    
    Increases related to current year tax positions
    
    
    7,383
    
    
    
    927
    
    
    
    7,258Decreases 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
   F-29




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
   14. Short-Term Borrowings
   15. Long-Term Borrowings
  December 28,
    
    
    December 27,2008
    
    
    20096.75% senior fixed-rate notes
    
    $
    215,000
    
    
    $
    213,0007.5% senior fixed-rate notes
    
    
    150,000
    
    
    
    150,0006% promissory note
    
    
    26,800
    
    
    
    16,800U.S. dollars bank loan at floating rates
    
    
    6,600
    
    
    
    Taiwan dollar loans and commercial papers at floating rates
    
    
    25,053
    
    
    
    22,167Total long-term borrowings
    
    
    423,453
    
    
    
    401,967Less: current amounts
    
    
    (26,953
    )
    
    
    (168,786
    )Non-current amounts
    
    $
    396,500
    
    
    $
    233,181
  F-30




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
      F-31




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
 short-term
   Payable in year2010
    
    $
    168,7862011
    
    
    230,8442012
    
    
    2,337Total
    
    $
    401,967
  16. Unutilized Credit Facilities
  F-32




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##### Table of Contents



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
  December 28,
    
    
    December 27,2008
    
    
    2009Deferred tax liabilities
    
    $
    29,191
    
    
    $
    33,932Accrued retirement and
severance benefits
    
    
    22,908
    
    
    
    11,662Liability for uncertain
tax positions
    
    
    7,499
    
    
    
    10,525Others
    
    
    4,546
    
    
    
    3,210$
    64,144
    
    
    $
    59,329
  December 28,
    
    
    December 27,2008
    
    
    2009Beginning
    
    $
    39,237
    
    
    $
    23,083Provision for retirement and severance benefits
    
    
    8,166
    
    
    
    4,394Severance payments
    
    
    (15,752
    )
    
    
    (14,934
    )Foreign currency loss
    
    
    (8,568
    )
    
    
    558Ending
    
    $
    23,083
    
    
    $
    13,101Payments 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
     F-33




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
 Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009Cost of revenues
    
    $
    4,783
    
    
    $
    905
    
    
    $
    190Selling, general and administrative
    
    
    3,118
    
    
    
    875
    
    
    
    242Research and development
    
    
    968
    
    
    
    228
    
    
    
    69Accelerated share-based compensation
    
    
    
    
    
    
    1,562
    
    
    
    $
    8,869
    
    
    $
    3,570
    
    
    $
    501
     Weighted AverageOptions
    
    
    Exercise Price(In thousands)
    
    
    Aggregate intrinsicvalue (in thousands)Options outstanding at December 31, 2006
    
    
    116,800
    
    
    $
    0.99Lapsed and forfeited
    
    
    (4,222
    )
    
    
    1.25Surrendered in tender offer
    
    
    (85,348
    )
    
    
    1.02Exercised
    
    
    (11,244
    )
    
    
    0.62Options outstanding at December 30, 2007
    
    
    15,986
    
    
    $
    1.70Lapsed and forfeited
    
    
    (1,559
    )
    
    
    1.60Exercised
    
    
    (37
    )
    
    
    0.55Options outstanding at December 28, 2008
    
    
    14,390
    
    
    $
    1.83Lapsed and forfeited
    
    
    (1,891
    )
    
    
    2.00Options outstanding at December 27, 2009
    
    
    12,499
    
    
    $
    1.80Exercisable at December 30, 2007
    
    
    15,328
    
    
    $
    1.53Exercisable at December 28, 2008
    
    
    14,303
    
    
    $
    1.53Exercisable at December 27, 2009
    
    
    12,471
    
    
    $
    1.50
 F-34




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  Options Outstanding
    
    Options ExercisableWeighted
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    Weighted
    
    
    
    
    
    Average
    
    WeightedNumber
    
    Remaining
    
    Average
    
    Number
    
    Remaining
    
    AverageRange of Exercise
    
    Outstanding at
    
    Contractual
    
    Exercise
    
    Exercisable at
    
    Contractual
    
    ExercisePrices
    
    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
    
    
    $
    3.9912,499
    
    
    
    2.3 years
    
    
    
    
    
    
    
    12,471
    
    
    
    2.3 years
  WeightedNumber
    
    
    average grant-outstanding
    
    
    date fair value(In thousands)Granted in 2007
    
    
    6,970
    
    
    $
    0.86Cancelled
    
    
    (668
    )
    
    
    0.86Outstanding as of December 30, 2007
    
    
    6,302
    
    
    $
    0.86Cancelled
    
    
    (655
    )
    
    
    0.86Vested
    
    
    (2,083
    )
    
    
    0.86Outstanding as of December 28, 2008
    
    
    3,564
    
    
    $
    0.85Cancelled
    
    
    (238
    )
    
    
    0.85Vested
    
    
    (1,735
    )
    
    
    0.85Outstanding as of December 27, 2009
    
    
    1,591
    
    
    $
    0.85
    F-35




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
         19. Share Repurchase
  F-36




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  20. Accumulated Other Comprehensive (Loss) Income
  December 28,
    
    
    December 27,2008
    
    
    2009Currency 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
  December 28,
    
    
    December 27,2008
    
    
    2009Capital commitmentsBuilding, mechanical and electrical installation
    
    $
    2,187
    
    
    $
    5,623Equipment
    
    
    33,522
    
    
    
    73,253Other commitmentsInventories
    
    $
    27,848
    
    
    $
    41,433
      F-37




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
 Payable in year2010
    
    
    17,0062011
    
    
    11,6032012
    
    
    8,5222013
    
    
    7,1492014
    
    
    7,180Thereafter
    
    
    18,591Total
    
    $
    70,051
 (b) Contingencies
     F-38




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
        F-39




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
   22. Restructuring Charges
    23. Other Non-Operating Income (Expense)
 Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009Gain (loss) on sale of marketable securities
    
    $
    (131
    )
    
    $
    36
    
    
    $
    10Gain from repurchase of senior notes
    
    
    
    
    
    
    
    
    
    
    276Other expense, net
    
    
    (311
    )
    
    
    (9
    )
    
    
    (2,302
    )$
    (442
    )
    
    $
    27
    
    
    $
    (2,016
    )
 24. Fair Value of Financial Instruments
 F-40




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
   Fair value measurementas of December 28, 2008Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssets:Short-term marketable securities
    
    $
    41,314
    
    
    $
    
    
    
    $
    
    
    
    $
    41,314Long-term marketable securities
    
    
    15,587
    
    
    
    
    
    
    
    
    
    
    
    15,587Total assets measured and recorded at fair value
    
    $
    56,901
    
    
    $
    
    
    
    $
    
    
    
    $
    56,901Liabilities:Accrued operating expenses (foreign currency forward contracts)
    
    $
    
    
    
    $
    7,078
    
    
    $
    
    
    
    $
    7,078Total liabilities measured and recorded at fair value
    
    $
    
    
    
    $
    7,078
    
    
    $
    
    
    
    $
    7,078
 Fair value measurementas of December 27, 2009Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssets:Short-term marketable securities
    
    $
    62,512
    
    
    $
    
    
    
    $
    
    
    
    $
    62,512Long-term marketable securities
    
    
    16,929
    
    
    
    
    
    
    
    
    
    
    
    16,929Total assets measured and recorded at fair value
    
    $
    79,441
    
    
    $
    
    
    
    $
    
    
    
    $
    79,441Liabilities:Accrued operating expenses (foreign currency forward contracts)
    
    $
    
    
    
    $
    680
    
    
    $
    
    
    
    $
    680Total liabilities measured and recorded at fair value
    
    $
    
    
    
    $
    680
    
    
    $
    
    
    
    $
    680
 F-41




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  Estimated fair value measurementas of December 28, 2008Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalLiabilities:Senior notes
    
    $
    
    
    
    $
    268,250
    
    
    $
    
    
    
    $
    268,250Total liabilities not measured and recorded at fair value
    
    $
    
    
    
    $
    268,250
    
    
    $
    
    
    
    $
    268,250
 Estimated fair value measurementas of December 27, 2009Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalLiabilities:Senior notes
    
    $
    
    
    
    $
    363,180
    
    
    $
    
    
    
    $
    363,180Total liabilities not measured and recorded at fair value
    
    $
    
    
    
    $
    363,180
    
    
    $
    
    
    
    $
    363,180
   25. Business Segment, Geographic and Major Customer Data
  F-42




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  Year EndedDecember 30,
    
    
    December 28,
    
    
    December 27,2007
    
    
    2008
    
    
    2009United 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
    
    
    
    216,8641,233,764
    
    
    
    1,202,516
    
    
    
    961,587Asia packaging  laminate
    
    
    213,857
    
    
    
    189,742
    
    
    
    129,401 packaging  leaded
    
    
    32,576
    
    
    
    55,869
    
    
    
    26,513 test and other services
    
    
    121,410
    
    
    
    126,855
    
    
    
    131,616367,843
    
    
    
    372,466
    
    
    
    287,530Europe packaging  laminate
    
    
    25,928
    
    
    
    55,027
    
    
    
    59,039 packaging  leaded
    
    
    11,154
    
    
    
    12,170
    
    
    
    8,074 test and other services
    
    
    12,871
    
    
    
    16,009
    
    
    
    9,45549,953
    
    
    
    83,206
    
    
    
    76,568Total 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
  Year EndedDecember 28,
    
    
    December 27,2008
    
    
    2009Singapore
    
    $
    227,636
    
    
    $
    260,973United States
    
    
    17,666
    
    
    
    8,572Rest of Asia
    
    
    971,040
    
    
    
    845,952Total
    
    $
    1,216,342
    
    
    $
    1,115,497
  Year EndedDecember 28,
    
    
    December 27,2008
    
    
    2009Singapore
    
    $
    493,739
    
    
    $
    583,623United States
    
    
    136,536
    
    
    
    124,980Rest of Asia
    
    
    918,382
    
    
    
    856,066Total
    
    $
    1,548,657
    
    
    $
    1,564,669
 F-43




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##### Table of Contents



STATS CHIPPAC LTD. AND SUBSIDIARIES
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In thousands of U.S. Dollars (except per share data)
  26. Condensed Consolidating Financial Information
    F-44




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##### Table of Contents



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
    
    
    GuarantorChipPAC
    
    
    Korea
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet revenues
    
    $
    432,058
    
    
    $
    613,248
    
    
    $
    1,199,553
    
    
    $
    333,329
    
    
    $
    (926,628
    )
    
    $
    1,651,560Cost of revenues
    
    
    330,428
    
    
    
    526,608
    
    
    
    1,077,722
    
    
    
    278,235
    
    
    
    (882,709
    )
    
    
    1,330,284Gross profit
    
    
    101,630
    
    
    
    86,640
    
    
    
    121,831
    
    
    
    55,094
    
    
    
    (43,919
    )
    
    
    321,276Operating expenses:Selling, general and administrative
    
    
    54,715
    
    
    
    15,336
    
    
    
    65,966
    
    
    
    9,887
    
    
    
    (33,311
    )
    
    
    112,593Research and development
    
    
    13,931
    
    
    
    10,262
    
    
    
    19,522
    
    
    
    1,833
    
    
    
    (10,630
    )
    
    
    34,918Restructuring charges
    
    
    990
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    990Tender offer expenses
    
    
    10,119
    
    
    
    
    
    
    
    803
    
    
    
    
    
    
    
    
    
    
    
    10,922Held for sale asset impairment
    
    
    
    
    
    
    
    
    
    
    1,725
    
    
    
    
    
    
    
    
    
    
    
    1,725Total operating expenses
    
    
    79,755
    
    
    
    25,598
    
    
    
    88,016
    
    
    
    11,720
    
    
    
    (43,941
    )
    
    
    161,148Operating income
    
    
    21,875
    
    
    
    61,042
    
    
    
    33,815
    
    
    
    43,374
    
    
    
    22
    
    
    
    160,128Other income (expense), net:Interest income
    
    
    3,807
    
    
    
    425
    
    
    
    4,086
    
    
    
    971
    
    
    
    (2,031
    )
    
    
    7,258Interest expense
    
    
    (33,904
    )
    
    
    (3,094
    )
    
    
    (4,187
    )
    
    
    (1,296
    )
    
    
    2,031
    
    
    
    (40,450
    )Foreign currency exchange gain
    
    
    1,968
    
    
    
    322
    
    
    
    179
    
    
    
    18
    
    
    
    
    
    
    
    2,487Equity gain from investment in equity investee
    
    
    102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102Equity 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
    )
    
    
    129,083Income tax expense
    
    
    2,000
    
    
    
    11,402
    
    
    
    7,583
    
    
    
    8,596
    
    
    
    
    
    
    
    29,581Net income
    
    
    93,684
    
    
    
    50,722
    
    
    
    50,168
    
    
    
    34,763
    
    
    
    (129,835
    )
    
    
    99,502Less: 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




---



##### Table of Contents



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
    
    
    GuarantorChipPAC
    
    
    Korea
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash Flows From Operating ActivitiesNet income attributable to STATS ChipPAC Ltd.
    
    $
    93,684
    
    
    $
    50,722
    
    
    $
    50,168
    
    
    $
    34,763
    
    
    $
    (135,653
    )
    
    $
    93,684Adjustments to reconcile net income
to net cash provided by operating activities:Depreciation and amortization
    
    
    84,095
    
    
    
    65,509
    
    
    
    54,937
    
    
    
    49,818
    
    
    
    (7
    )
    
    
    254,352Amortization of leasing prepayments
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11Debt 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
    
    
    
    
    
    
    
    
    
    
    
    1,725Accretion of discount on convertible notes
    
    
    4,830
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,830Foreign currency exchange loss (gain)
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    755
    
    
    
    (15
    )
    
    
    724Share-based compensation expense
    
    
    3,192
    
    
    
    3,958
    
    
    
    1,531
    
    
    
    188
    
    
    
    
    
    
    
    8,869Deferred income taxes
    
    
    2,000
    
    
    
    (9,079
    )
    
    
    2,490
    
    
    
    914
    
    
    
    
    
    
    
    (3,675
    )Net income attributable to the
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,818
    
    
    
    5,818Equity 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
    
    
    
    
    
    
    
    1,604Changes 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
    
    
    
    
    
    
    
    29,599Other receivables, prepaid expenses
and other assets
    
    
    4,091
    
    
    
    6,597
    
    
    
    (2,239
    )
    
    
    (1,337
    )
    
    
    
    
    
    
    7,112Accounts payable, accrued operating expenses
and other payables
    
    
    (21,209
    )
    
    
    36,516
    
    
    
    41,981
    
    
    
    (12,996
    )
    
    
    (262
    )
    
    
    44,030Amounts due to affiliates
    
    
    40,330
    
    
    
    12,162
    
    
    
    (20,287
    )
    
    
    10,758
    
    
    
    (41,357
    )
    
    
    1,606Net cash provided by operating activities
    
    
    190,858
    
    
    
    146,689
    
    
    
    31,208
    
    
    
    48,505
    
    
    
    (5,748
    )
    
    
    411,512Cash Flows From Investing ActivitiesProceeds from sales of marketable securities
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    19,660
    
    
    $
    
    
    
    $
    19,660Proceeds from maturity of marketable securities
    
    
    2,614
    
    
    
    
    
    
    
    
    
    
    
    20,985
    
    
    
    
    
    
    
    23,599Purchases 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
    
    
    
    
    
    
    
    21,829Others, net
    
    
    16,049
    
    
    
    6,983
    
    
    
    4,228
    
    
    
    9,164
    
    
    
    (34,100
    )
    
    
    2,324Net cash used in investing activities
    
    
    (87,035
    )
    
    
    (138,770
    )
    
    
    (128,934
    )
    
    
    (4,563
    )
    
    
    60,214
    
    
    
    (299,088
    )Cash Flows From Financing ActivitiesRepayment 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
    )
    
    
    19,851Repurchase and redemption of
convertible notes
    
    
    (36,800
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,800
    )Proceeds from promissory notes
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    50,000Proceeds from bank borrowings
    
    
    50,000
    
    
    
    3,600
    
    
    
    
    
    
    
    29,257
    
    
    
    
    
    
    
    82,857Increase 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
    
    
    
    
    
    
    
    41,974Effect of exchange rate changes
on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    30Cash and cash equivalents
at beginning of the year
    
    
    69,057
    
    
    
    22,503
    
    
    
    55,785
    
    
    
    24,112
    
    
    
    
    
    
    
    171,457Cash and cash equivalents at end of the year
    
    $
    91,813
    
    
    $
    25,224
    
    
    $
    65,945
    
    
    $
    30,479
    
    
    $
    
    
    
    $
    213,461
 F-46




---



##### Table of Contents



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
    
    
    GuarantorChipPAC
    
    
    Korea
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    146,281
    
    
    $
    12,807
    
    
    $
    95,239
    
    
    $
    41,589
    
    
    $
    
    
    
    $
    295,916Short-term marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,314
    
    
    
    
    
    
    
    41,314Accounts receivable, net
    
    
    52,301
    
    
    
    
    
    
    
    79,313
    
    
    
    7,906
    
    
    
    
    
    
    
    139,520Short-term amounts due from affiliates
    
    
    645,175
    
    
    
    662
    
    
    
    212,407
    
    
    
    13,157
    
    
    
    (860,610
    )
    
    
    10,791Other receivables
    
    
    2,490
    
    
    
    1,343
    
    
    
    3,881
    
    
    
    643
    
    
    
    
    
    
    
    8,357Inventories
    
    
    13,306
    
    
    
    26,284
    
    
    
    11,237
    
    
    
    9,890
    
    
    
    
    
    
    
    60,717Prepaid expenses and other current assets
    
    
    1,773
    
    
    
    8,488
    
    
    
    2,866
    
    
    
    1,566
    
    
    
    
    
    
    
    14,693Total current assets
    
    
    861,326
    
    
    
    49,584
    
    
    
    404,943
    
    
    
    116,065
    
    
    
    (860,610
    )
    
    
    571,308Long-term marketable securities
    
    
    15,587
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,587Long-term amounts due from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,726
    
    
    
    
    
    
    
    13,726Property, plant and equipment, net
    
    
    227,636
    
    
    
    374,189
    
    
    
    297,950
    
    
    
    316,567
    
    
    
    
    
    
    
    1,216,342Investment in equity investee
    
    
    9,001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,001Investment in subsidiaries
    
    
    1,030,329
    
    
    
    
    
    
    
    92,050
    
    
    
    
    
    
    
    (1,122,379
    )
    
    
    Intangible assets
    
    
    12,024
    
    
    
    1,406
    
    
    
    29,200
    
    
    
    2,132
    
    
    
    
    
    
    
    44,762Goodwill
    
    
    
    
    
    
    319,638
    
    
    
    125,605
    
    
    
    103,680
    
    
    
    2,209
    
    
    
    551,132Long-term restricted cash
    
    
    
    
    
    
    634
    
    
    
    15
    
    
    
    363
    
    
    
    
    
    
    
    1,012Prepaid expenses and other non-current assets
    
    
    9,140
    
    
    
    8,205
    
    
    
    1,033
    
    
    
    5,815
    
    
    
    
    
    
    
    24,193Total assets
    
    $
    2,165,043
    
    
    $
    753,656
    
    
    $
    950,796
    
    
    $
    558,348
    
    
    $
    (1,980,780
    )
    
    $
    2,447,063LIABILITIES AND EQUITYCurrent liabilities:Accounts and other payables
    
    $
    11,086
    
    
    $
    44,767
    
    
    $
    30,450
    
    
    $
    31,924
    
    
    $
    
    
    
    $
    118,227Payables related to property, plant
and equipment purchases
    
    
    9,264
    
    
    
    1,561
    
    
    
    13,994
    
    
    
    5,885
    
    
    
    
    
    
    
    30,704Accrued operating expenses
    
    
    52,609
    
    
    
    53,136
    
    
    
    29,114
    
    
    
    13,210
    
    
    
    
    
    
    
    148,069Income taxes payable
    
    
    
    
    
    
    18
    
    
    
    1,792
    
    
    
    1,569
    
    
    
    
    
    
    
    3,379Short-term borrowings
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000Short-term amounts due to affiliates
    
    
    128,244
    
    
    
    81,588
    
    
    
    611,119
    
    
    
    41,047
    
    
    
    (860,610
    )
    
    
    1,388Current installments of long-term debts
    
    
    
    
    
    
    6,600
    
    
    
    10,000
    
    
    
    10,353
    
    
    
    
    
    
    
    26,953Total current liabilities
    
    
    251,203
    
    
    
    187,670
    
    
    
    696,469
    
    
    
    103,988
    
    
    
    (860,610
    )
    
    
    378,720Long-term debts, excluding current
installments installments
    
    
    365,000
    
    
    
    
    
    
    
    16,800
    
    
    
    14,700
    
    
    
    
    
    
    
    396,500Other non-current liabilities
    
    
    183
    
    
    
    33,221
    
    
    
    18,458
    
    
    
    12,282
    
    
    
    
    
    
    
    64,144Total liabilities
    
    
    616,386
    
    
    
    220,891
    
    
    
    731,727
    
    
    
    130,970
    
    
    
    (860,610
    )
    
    
    839,364Shareholders equity attributable to
STATS ChipPAC Ltd.
    
    
    1,548,657
    
    
    
    532,765
    
    
    
    219,069
    
    
    
    427,378
    
    
    
    (1,179,212
    )
    
    
    1,548,657Noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,042
    
    
    
    59,042Total equity
    
    
    1,548,657
    
    
    
    532,765
    
    
    
    219,069
    
    
    
    427,378
    
    
    
    (1,120,170
    )
    
    
    1,607,699Total liabilities and equity
    
    $
    2,165,043
    
    
    $
    753,656
    
    
    $
    950,796
    
    
    $
    558,348
    
    
    $
    (1,980,780
    )
    
    $
    2,447,063
 F-47




---



##### Table of Contents



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
    
    
    GuarantorChipPAC
    
    
    Korea
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet revenues
    
    $
    412,730
    
    
    $
    621,020
    
    
    $
    1,241,330
    
    
    $
    263,018
    
    
    $
    (879,910
    )
    
    $
    1,658,188Cost of revenues
    
    
    309,296
    
    
    
    560,018
    
    
    
    1,089,030
    
    
    
    257,536
    
    
    
    (832,083
    )
    
    
    1,383,797Gross profit
    
    
    103,434
    
    
    
    61,002
    
    
    
    152,300
    
    
    
    5,482
    
    
    
    (47,827
    )
    
    
    274,391Operating expenses:Selling, general and administrative
    
    
    57,355
    
    
    
    14,002
    
    
    
    72,128
    
    
    
    10,632
    
    
    
    (35,780
    )
    
    
    118,337Research and development
    
    
    15,245
    
    
    
    10,690
    
    
    
    22,133
    
    
    
    1,804
    
    
    
    (12,047
    )
    
    
    37,825Restructuring charges
    
    
    5,912
    
    
    
    
    
    
    
    12,763
    
    
    
    1,115
    
    
    
    
    
    
    
    19,790Equipment impairment
    
    
    4,940
    
    
    
    6,330
    
    
    
    6,253
    
    
    
    3,568
    
    
    
    
    
    
    
    21,091Accelerated share based compensation
    
    
    1,027
    
    
    
    317
    
    
    
    117
    
    
    
    101
    
    
    
    
    
    
    
    1,562Total operating expenses
    
    
    84,479
    
    
    
    31,339
    
    
    
    113,394
    
    
    
    17,220
    
    
    
    (47,827
    )
    
    
    198,605Operating income (loss)
    
    
    18,955
    
    
    
    29,663
    
    
    
    38,906
    
    
    
    (11,738
    )
    
    
    
    
    
    
    75,786Other income (expense), net:Interest income
    
    
    2,559
    
    
    
    169
    
    
    
    3,550
    
    
    
    1,438
    
    
    
    (2,031
    )
    
    
    5,685Interest expense
    
    
    (30,583
    )
    
    
    (2,511
    )
    
    
    (3,897
    )
    
    
    (1,026
    )
    
    
    2,031
    
    
    
    (35,986
    )Foreign currency exchange gain (loss)
    
    
    195
    
    
    
    9,809
    
    
    
    (4,923
    )
    
    
    166
    
    
    
    
    
    
    
    5,247Equity 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
    
    
    
    
    
    
    
    27Total 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
    )
    
    
    49,322Income tax expense
    
    
    5,804
    
    
    
    8,790
    
    
    
    3,616
    
    
    
    962
    
    
    
    
    
    
    
    19,172Net income (loss)
    
    
    25,702
    
    
    
    28,340
    
    
    
    10,768
    
    
    
    (12,005
    )
    
    
    (22,655
    )
    
    
    30,150Less: 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




---



##### Table of Contents



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
    
    
    GuarantorChipPAC
    
    
    Korea
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash Flows From Operating ActivitiesNet income (loss) attributable to
STATS ChipPAC Ltd.
    
    $
    25,702
    
    
    $
    28,340
    
    
    $
    10,768
    
    
    $
    (12,005
    )
    
    $
    (27,103
    )
    
    $
    25,702Adjustments to reconcile net income (loss) to
net cash provided by operating activities:Depreciation and amortization
    
    
    78,253
    
    
    
    81,430
    
    
    
    69,536
    
    
    
    54,472
    
    
    
    
    
    
    
    283,691Debt issuance cost amortization
    
    
    2,691
    
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    2,737Equipment impairment
    
    
    4,940
    
    
    
    6,330
    
    
    
    6,253
    
    
    
    3,568
    
    
    
    
    
    
    
    21,091(Gain) loss on sale of property, plant
and equipment
    
    
    1,335
    
    
    
    
    
    
    
    9
    
    
    
    (221
    )
    
    
    
    
    
    
    1,123Accretion of discount on convertible notes
    
    
    66
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66Foreign currency exchange loss (gain)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,555
    )
    
    
    
    
    
    
    (1,555
    )Share-based compensation expense
    
    
    1,933
    
    
    
    992
    
    
    
    402
    
    
    
    243
    
    
    
    
    
    
    
    3,570Deferred income taxes
    
    
    5,900
    
    
    
    930
    
    
    
    (684
    )
    
    
    (635
    )
    
    
    
    
    
    
    5,511Net income attributable to the
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,448
    
    
    
    4,448Equity loss from investment in equity investee
    
    
    1,437
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,437Equity gain (loss) from
investment in subsidiaries
    
    
    (37,109
    )
    
    
    
    
    
    
    19,118
    
    
    
    
    
    
    
    17,991
    
    
    
    Others
    
    
    504
    
    
    
    2,610
    
    
    
    887
    
    
    
    177
    
    
    
    
    
    
    
    4,178Changes in operating working capital:Accounts receivable
    
    
    20,526
    
    
    
    
    
    
    
    104,173
    
    
    
    7,141
    
    
    
    
    
    
    
    131,840Amounts due from affiliates
    
    
    (68,476
    )
    
    
    37,343
    
    
    
    (70,751
    )
    
    
    45,901
    
    
    
    47,610
    
    
    
    (8,373
    )Inventories
    
    
    6,308
    
    
    
    12,232
    
    
    
    443
    
    
    
    3,612
    
    
    
    
    
    
    
    22,595Other 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
    )
    
    
    419,525Cash Flows From Investing ActivitiesProceeds from sales of marketable securities
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    29,755
    
    
    $
    
    
    
    $
    29,755Proceeds from maturity of marketable
securities
    
    
    
    
    
    
    
    
    
    
    3,810
    
    
    
    46,331
    
    
    
    
    
    
    
    50,141Purchases 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
    
    
    
    
    
    
    
    19,108Proceeds from deregistration of subsidiary
    
    
    9,654
    
    
    
    
    
    
    
    
    
    
    
    (9,654
    )
    
    
    
    
    
    
    Others, net
    
    
    8,871
    
    
    
    13,758
    
    
    
    7,717
    
    
    
    15,451
    
    
    
    (43,651
    )
    
    
    2,146Net cash used in investing activities
    
    
    (43,571
    )
    
    
    (113,269
    )
    
    
    (70,704
    )
    
    
    (67,201
    )
    
    
    11,031
    
    
    
    (283,714
    )Cash Flows From Financing ActivitiesRepayment 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
    )
    
    
    6,152Repurchase 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
    
    
    
    
    
    
    
    600Grants received
    
    
    340
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    340Distribution 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
    
    
    
    
    
    
    
    82,346Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109
    
    
    
    
    
    
    
    109Cash and cash equivalents
at beginning of the year
    
    
    91,813
    
    
    
    25,224
    
    
    
    65,945
    
    
    
    30,479
    
    
    
    
    
    
    
    213,461Cash and cash equivalents at end of the year
    
    $
    146,281
    
    
    $
    12,807
    
    
    $
    95,239
    
    
    $
    41,589
    
    
    $
    
    
    
    $
    295,916
 F-49




---



##### Table of Contents



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
    
    
    GuarantorChipPAC
    
    
    Korea
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    177,877
    
    
    $
    10,871
    
    
    $
    82,903
    
    
    $
    17,032
    
    
    $
    
    
    
    $
    288,683Short-term marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,512
    
    
    
    
    
    
    
    62,512Accounts receivable, net
    
    
    86,987
    
    
    
    
    
    
    
    101,813
    
    
    
    19,966
    
    
    
    
    
    
    
    208,766Short-term amounts due from affiliates
    
    
    484,923
    
    
    
    5,291
    
    
    
    85,978
    
    
    
    50,298
    
    
    
    (605,595
    )
    
    
    20,895Other receivables
    
    
    5,875
    
    
    
    3,720
    
    
    
    1,174
    
    
    
    786
    
    
    
    
    
    
    
    11,555Inventories
    
    
    13,802
    
    
    
    20,329
    
    
    
    7,915
    
    
    
    19,813
    
    
    
    
    
    
    
    61,859Prepaid expenses and other current assets
    
    
    2,267
    
    
    
    8,779
    
    
    
    3,030
    
    
    
    5,689
    
    
    
    
    
    
    
    19,765Total current assets
    
    
    771,731
    
    
    
    48,990
    
    
    
    282,813
    
    
    
    176,096
    
    
    
    (605,595
    )
    
    
    674,035Long-term marketable securities
    
    
    16,426
    
    
    
    503
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,929Long-term amounts due from affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Property, plant and equipment, net
    
    
    260,973
    
    
    
    280,177
    
    
    
    262,439
    
    
    
    311,908
    
    
    
    
    
    
    
    1,115,497Investment in equity investee
    
    
    7,743
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,743Investment in subsidiaries
    
    
    1,005,273
    
    
    
    
    
    
    
    88,121
    
    
    
    
    
    
    
    (1,093,394
    )
    
    
    Intangible assets
    
    
    14,002
    
    
    
    654
    
    
    
    23,988
    
    
    
    1,349
    
    
    
    
    
    
    
    39,993Goodwill
    
    
    
    
    
    
    319,638
    
    
    
    125,605
    
    
    
    103,680
    
    
    
    2,209
    
    
    
    551,132Long-term restricted cash
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    378
    
    
    
    
    
    
    
    384Prepaid expenses and other non-current assets
    
    
    2,484
    
    
    
    16,637
    
    
    
    1,070
    
    
    
    1,036
    
    
    
    
    
    
    
    21,227Total assets
    
    $
    2,078,632
    
    
    $
    666,605
    
    
    $
    784,036
    
    
    $
    594,447
    
    
    $
    (1,696,780
    )
    
    $
    2,426,940LIABILITIES AND EQUITYCurrent liabilities:Accounts and other payables
    
    $
    16,032
    
    
    $
    39,630
    
    
    $
    22,620
    
    
    $
    55,250
    
    
    $
    
    
    
    $
    133,532Payables related to property, plant and equipment purchases
    
    
    22,710
    
    
    
    4,028
    
    
    
    7,899
    
    
    
    14,535
    
    
    
    
    
    
    
    49,172Accrued operating expenses
    
    
    45,033
    
    
    
    19,636
    
    
    
    24,555
    
    
    
    11,773
    
    
    
    
    
    
    
    100,997Income taxes payable
    
    
    
    
    
    
    
    
    
    
    1,575
    
    
    
    805
    
    
    
    
    
    
    
    2,380Short-term borrowings
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    6,000
    
    
    
    
    
    
    
    56,000Short-term amounts due to affiliates
    
    
    16,007
    
    
    
    48,026
    
    
    
    496,893
    
    
    
    44,686
    
    
    
    (605,595
    )
    
    
    17Current installments of long-term debts
    
    
    150,000
    
    
    
    
    
    
    
    10,000
    
    
    
    8,786
    
    
    
    
    
    
    
    168,786Total current liabilities
    
    
    299,782
    
    
    
    111,320
    
    
    
    563,542
    
    
    
    141,835
    
    
    
    (605,595
    )
    
    
    510,884Long-term debts, excluding current installments installments
    
    
    213,000
    
    
    
    
    
    
    
    6,800
    
    
    
    13,381
    
    
    
    
    
    
    
    233,181Other non-current liabilities
    
    
    1,181
    
    
    
    26,343
    
    
    
    17,130
    
    
    
    14,675
    
    
    
    
    
    
    
    59,329Total liabilities
    
    
    513,963
    
    
    
    137,663
    
    
    
    587,472
    
    
    
    169,891
    
    
    
    (605,595
    )
    
    
    803,394Shareholders equity attributable to
STATS ChipPAC Ltd.
    
    
    1,564,669
    
    
    
    528,942
    
    
    
    196,564
    
    
    
    424,556
    
    
    
    (1,150,062
    )
    
    
    1,564,669Noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,877
    
    
    
    58,877Total equity
    
    
    1,564,669
    
    
    
    528,942
    
    
    
    196,564
    
    
    
    424,556
    
    
    
    (1,091,185
    )
    
    
    1,623,546Total liabilities and equity
    
    $
    2,078,632
    
    
    $
    666,605
    
    
    $
    784,036
    
    
    $
    594,447
    
    
    $
    (1,696,780
    )
    
    $
    2,426,940
 F-50




---



##### Table of Contents



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
    
    
    GuarantorChipPAC
    
    
    Korea
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet revenues
    
    $
    345,806
    
    
    $
    412,028
    
    
    $
    984,627
    
    
    $
    279,484
    
    
    $
    (696,260
    )
    
    $
    1,325,685Cost of revenues
    
    
    251,935
    
    
    
    385,170
    
    
    
    861,092
    
    
    
    272,034
    
    
    
    (652,923
    )
    
    
    1,117,308Gross profit
    
    
    93,871
    
    
    
    26,858
    
    
    
    123,535
    
    
    
    7,450
    
    
    
    (43,337
    )
    
    
    208,377Operating expenses:Selling, general and administrative
    
    
    39,933
    
    
    
    12,476
    
    
    
    64,318
    
    
    
    8,498
    
    
    
    (29,709
    )
    
    
    95,516Research and development
    
    
    19,672
    
    
    
    9,186
    
    
    
    25,033
    
    
    
    3,095
    
    
    
    (13,628
    )
    
    
    43,358Restructuring charges
    
    
    
    
    
    
    13,069
    
    
    
    3,003
    
    
    
    
    
    
    
    
    
    
    
    16,072Total operating expenses
    
    
    59,605
    
    
    
    34,731
    
    
    
    92,354
    
    
    
    11,593
    
    
    
    (43,337
    )
    
    
    154,946Operating income (loss)
    
    
    34,266
    
    
    
    (7,873
    )
    
    
    31,181
    
    
    
    (4,143
    )
    
    
    
    
    
    
    53,431Other income (expense), net:Interest income
    
    
    1,127
    
    
    
    293
    
    
    
    1,440
    
    
    
    520
    
    
    
    (1,211
    )
    
    
    2,169Interest 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
    
    
    
    14,738Income tax expense
    
    
    998
    
    
    
    (4,741
    )
    
    
    (167
    )
    
    
    7,622
    
    
    
    
    
    
    
    3,712Net income (loss)
    
    
    10,053
    
    
    
    (7,771
    )
    
    
    20,515
    
    
    
    (12,848
    )
    
    
    1,077
    
    
    
    11,026Less: 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




---



##### Table of Contents



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
    
    
    GuarantorChipPAC
    
    
    Korea
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash Flows From Operating ActivitiesNet income (loss) attributable to
STATS ChipPAC Ltd.
    
    $
    10,053
    
    
    $
    (7,771
    )
    
    $
    20,515
    
    
    $
    (12,848
    )
    
    $
    104
    
    
    $
    10,053Adjustments to reconcile net income (loss) to
net cash provided by operating activities:Depreciation and amortization
    
    
    69,192
    
    
    
    75,237
    
    
    
    65,185
    
    
    
    57,016
    
    
    
    
    
    
    
    266,630Debt issuance cost amortization
    
    
    1,719
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,719(Gain) loss on sale of property, plant
and equipment
    
    
    485
    
    
    
    1,126
    
    
    
    (9
    )
    
    
    (390
    )
    
    
    
    
    
    
    1,212Gain from repurchase of senior notes
    
    
    (276
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (276
    )Foreign currency exchange loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    965
    
    
    
    
    
    
    
    965Share-based compensation expense
    
    
    251
    
    
    
    100
    
    
    
    96
    
    
    
    54
    
    
    
    
    
    
    
    501Deferred income taxes
    
    
    1,149
    
    
    
    (1,426
    )
    
    
    (1,254
    )
    
    
    3,256
    
    
    
    
    
    
    
    1,725Net income attributable to the
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    973
    
    
    
    973Equity loss from investment in equity investee
    
    
    1,321
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,321Equity loss from investment in subsidiaries
    
    
    34,560
    
    
    
    
    
    
    
    11,925
    
    
    
    
    
    
    
    (46,485
    )
    
    
    Others
    
    
    147
    
    
    
    
    
    
    
    1,151
    
    
    
    116
    
    
    
    
    
    
    
    1,414Changes 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
    )
    
    
    3,622Inventories
    
    
    (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
    )
    
    
    174,872Cash Flows From Investing ActivitiesProceeds from sales of marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    15,663
    
    
    
    
    
    
    $
    15,663Proceeds from maturity of marketable
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,736
    
    
    
    
    
    
    
    31,736Purchases of marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (67,634
    )
    
    
    
    
    
    
    (67,634
    )Cash injection in subsidiaries
    
    
    (3,986
    )
    
    
    
    
    
    
    (8,000
    )
    
    
    
    
    
    
    11,986
    
    
    
    0Acquisition 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
    
    
    
    
    
    
    
    593Others, net
    
    
    8,569
    
    
    
    43,086
    
    
    
    14,244
    
    
    
    6,426
    
    
    
    (71,379
    )
    
    
    946Net cash provided by (used in)
investing activities
    
    
    (95,678
    )
    
    
    20,868
    
    
    
    (39,698
    )
    
    
    (61,960
    )
    
    
    11,986
    
    
    
    (164,482
    )Cash Flows From Financing ActivitiesRepayment 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
    )
    
    
    
    
    
    
    603Distribution 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
    
    
    
    
    
    
    
    295,916Cash and cash equivalents at end of the year
    
    $
    177,877
    
    
    $
    10,871
    
    
    $
    82,903
    
    
    $
    17,032
    
    
    $
    
    
    
    $
    288,683
 F-52