##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 20-F/A
 (Amendment No. 1)
 
 (Mark One)o
    
    Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934.ORþ
    
    Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.For the fiscal year ended December 31, 2006.ORo
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.For the transition period from  to.ORo
    
    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 000-27811
 CHARTERED SEMICONDUCTOR MANUFACTURING LTD.
  
 
  Title of Each Class
    
    Name of Each Exchange on Which RegisteredAmerican Depositary Shares,
    
    NASDAQ Global Select MarketEach represented by ten Ordinary Shares
 
 
 
  þ o
  o þ
  þ o
  þ o o
  o þ
  o þ




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TABLE OF CONTENTS  EXPLANATORY NOTEItem 18. Financial StatementsEXHIBITSSIGNATURESREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBALANCE SHEETS  in US DollarsSTATEMENTS OF INCOME  in US DollarsSTATEMENTS OF COMPREHENSIVE INCOME  in US DollarsSTATEMENTS OF SHAREHOLDERS EQUITY  in US Dollars In thousandsSTATEMENTS OF CASH FLOWS  in US DollarsNOTES TO THE FINANCIAL STATEMENTS  in US DollarsEx-12.1 Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Ex-12.2 Certification of the Senior Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Ex-13.1 Certification of the President and 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 of the Senior Vice President and Chief Financial Officer pursuant to 18.U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Ex-15.2 Consent of KPMG relating to incorporation of audit report relating to Silicon Manufacturing Partners Pte Ltd.    Table of Contents  
 EXPLANATORY NOTE
   
 Item 18. Financial Statements
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##### Table of Contents



EXHIBITS
 1(1)
    
    Memorandum and Articles of Association of the company.2.1(2)
    
    Specimen certificate for ordinary shares issued prior to January 30, 2006.2.2 (27)
    
    Specimen certificate for ordinary shares in respect of new issuances of shares issued onor after January 30, 2006.2.3 (27)
    
    Specimen certificate for ordinary shares transferred on or after January 30, 2006 inrespect of shares issued on or after January 30, 2006.2.4 (23)
    
    Specimen certificate for convertible redeemable preference shares.2.5(3)
    
    Deposit Agreement dated November 4, 1999 by and among the company, Citibank, N.A. andthe holders and beneficial owners of American Depositary Shares evidenced by AmericanDepositary Receipts issued thereunder (including as an exhibit, the form of AmericanDepositary Receipt).2.6(19)
    
    Conversion Price Certificate dated August 17, 2005 of the company.Loan Agreements and Indentures4.1.1(6)
    
    Indenture dated as of April 2, 2001 by and between the company and Wells Fargo BankMinnesota, National Association.4.1.2(20)
    
    Second Supplemental Indenture dated August 3, 2005 by and between the company and TheBank of New York.4.1.3(20)
    
    Third Supplemental Indenture dated August 3, 2005 by and between the company and TheBank of New York.4.1.4(21)
    
    Fourth Supplemental Indenture dated August 17, 2005 by and between the company and TheBank of New York.4.1.5(24)
    
    Fifth Supplemental Indenture dated April 4, 2006 by and between the company and The Bankof New York.4.2(21)
    
    Master Agency Agreement dated August 17, 2005 by and between the company and The Bank ofNew York.4.3(18)(+)
    
    Facility Agreement dated December 23, 2004 by and among the company as Borrower,JPMorgan Chase Bank, N.A. as Lender, Export-Import Bank of the United States andJPMorgan Chase Bank, N.A as Facility Agent.4.4(18)(+)
    
    Facility Agreement dated December 22, 2004 by and between the company as Borrower andBank of America as Lender.4.5(25)(++)
    
    Letter of Confirmation from Goldman Sachs International to the company dated March 29,2006 supplementing the ISDA Master Agreement (Multicurrency-Cross Border) dated August10, 2004 by and between the company and Goldman Sachs International, as counter-partytogether with the Schedule to the Master Agreement.4.6(25)(++)
    
    Facility Agreement dated March 3, 2006 by and between the company as Borrower andSumitomo Mitsui Banking Corporation as Arranger and Sumitomo Mitsui Banking Corporation,Singapore Branch as Agent.4.6.1(26)
    
    Syndication Agreement dated June 30, 2006 relating to the Facility Agreement dated March3, 2006 by and between the company as Borrower and Sumitomo Mitsui Banking Corporationas Arranger and Sumitomo Mitsui Banking Corporation, Singapore Branch as Agent.
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##### Table of Contents



Strategic AlliancesCSP4.7.1(7)
    
    Deed of Accession and Ratification dated October 22, 2001 by and among the company, EDBInvestments Pte Ltd, Agilent Technologies Europe B.V. and Singapex Investments Pte Ltdrelating to the Joint Venture Agreement dated March 13, 1997, as amended and restated onOctober 23, 2001(the "Restated Joint Venture Agreement" dated October 23, 2001).4.7.2(7)
    
    Amendment Agreement No. 1 dated January 31, 2002 to Restated Joint Venture Agreementdated October 23, 2001.4.7.3(23)
    
    Deed of Accession and Ratification dated January 26, 2006 by and among the company, EDBInvestments Pte Ltd, Singapex Investments Pte Ltd, Agilent Technologies Europe B.V. andAvago Technologies General IP (Singapore) Pte. Ltd. relating to the Restated JointVenture Agreement dated October 23, 2001 and as further amended by an amendment (No. 1)dated January 31, 2002.SMP4.8.1(2)(+)
    
    Joint Venture Agreement dated December 19, 1997 by and between the company and LucentTechnologies Microelectronics Pte Ltd.4.8.2(17)
    
    Supplemental Agreement dated September 17, 2004 to the Joint Venture Agreement datedDecember 19, 1997 by and between the company and Agere Systems Singapore Pte Ltd.(formerly known as "Lucent Technologies Microelectronics Pte. Ltd.").4.8.3(22)
    
    Second Supplemental Agreement dated January 1, 2005 to the Joint Venture Agreement datedDecember 19, 1997 by and between the company and Agere Systems Singapore Pte Ltd.4.8.4(2)(+)
    
    Assured Supply and Demand Agreement dated February 17, 1998 by and among the company,Silicon Manufacturing Partners Pte Ltd and Lucent Technologies Microelectronics Pte Ltd.4.8.5(2)(+)
    
    Supplemental Assured Supply and Demand Agreement dated September 3, 1999 by and amongthe company, Silicon Manufacturing Partners Pte Ltd and Lucent TechnologiesMicroelectronics Pte. Ltd.4.8.6(2)(+)
    
    License and Technology Transfer Agreement dated February 17, 1998 by and among thecompany, Lucent Technologies Microelectronics Pte. Ltd. and Silicon ManufacturingPartners Pte Ltd.4.8.7(10)(+)
    
    Amendment Agreement (No. 1) to License and Technology Transfer Agreement dated July 27,2000 by and between the company, Lucent Technologies Microelectronics Pte. Ltd. andSilicon Manufacturing Partners Pte Ltd.4.8.8(8)(+)
    
    Amendment Agreement (No. 2) dated March 22, 2001 to License and Technology TransferAgreement dated February 17, 1998 by and between the company, Agere Systems SingaporePte Ltd (formerly known as "Lucent Technologies Microelectronics Pte. Ltd.") and SiliconManufacturing Partners Pte Ltd.4.8.9(9)(+)
    
    Amendment Agreement (No. 3) dated March 28, 2002 to License and Technology TransferAgreement dated February 17, 1998 by and among the company, Agere Systems Singapore PteLtd (formerly known as "Lucent Technologies Microelectronics Pte. Ltd.") and SiliconManufacturing Partners Pte Ltd.4.8.10(4)(+)
    
    Amendment Agreement (No. 4) dated July 1, 2003 to License and Technology TransferAgreement dated February 17, 1998 by and among the company, Agere Systems Singapore PteLtd (formerly known as Lucent Technologies Microelectronics Pte. Ltd.) and SiliconManufacturing Partners Pte Ltd.
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##### Table of Contents



Technology transfer, license, joint development and other related agreementsAgere/Lucent4.9.1(2)(+)
    
    Technology Transfer Agreement dated February 17, 1998 by and between the company andLucent Technologies Inc.4.9.2(8)(+)
    
    Amendment Agreement (No. 1) dated July 31, 2000 to Technology Transfer Agreement datedFebruary 17, 1998 between Lucent Technologies Inc. and the company.4.9.3(8)(+)
    
    Amendment Agreement (No. 2) dated March 20, 2001 to Technology Transfer Agreement datedFebruary 17, 1998 between Agere Systems Inc. (formerly known as the "MicroelectronicsGroup of Lucent Technologies Inc.") and the company.4.9.4(8)(+)
    
    Amendment Agreement (No. 3) dated March 28, 2002 to Technology Transfer Agreement datedFebruary 17, 1998 between Agere Systems Inc. (formerly known as the "MicroelectronicsGroup of Lucent Technologies Inc.") and the company.4.9.5(2)(+)
    
    Patent License Agreement dated January 1, 1998 by and between the company and LucentTechnologies Inc.4.9.6(14)(+)
    
    Patent License Agreement Amendment dated August 3, 2000 by and between the company andLucent Technologies Inc.4.9.7(10)
    
    Letter Agreement dated September 26, 2002 by and between the company and Agere SystemsInc. amending the Patent License Agreement between the parties dated January 1, 1998.Toshiba4.10(2)(+)
    
    Patent Cross License Agreement dated August 12, 1999 by and between the company andToshiba Corporation.IBM4.11.1(7)(+)
    
    Patent Cross-License Agreement dated January 1, 2001 by and between the company andInternational Business Machines Corporation.4.11.2(11)(+)
    
    Amendment No. 1 dated November 26, 2002 to Patent License Agreement dated January 1,2001 by and between the company and International Business Machines Corporation.4.11.3(11)(+)
    
    SF Process Development and Cost Sharing Agreement dated November 26, 2002 by andbetween the company and International Business Machines Corporation.4.11.4(11)(+)
    
    Copper / Related FEOL Technology License Agreement dated November 26, 2002 by andbetween the company and International Business Machines Corporation.4.11.5(22)(++)
    
    Amendment No. 1 dated January 19, 2005 to the Copper / Related FEOL Technology LicenseAgreement dated November 26, 2002 by and between the company and International BusinessMachines Corporation.4.11.6(12)(+)
    
    Amendment No. 1 dated June 26, 2003 to SF Process Development and Cost SharingAgreement dated November 26, 2002 by and between the company and International BusinessMachines Corporation.4.11.7(16)(+)
    
    Amended and Restated Amendment No. 2 dated March 9, 2004 to the SF Process Developmentand Cost Sharing Agreement dated November 26, 2002 by and between the company andInternational Business Machines Corporation.
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##### Table of Contents



4.11.8(27)(++)
    
    Third Amended and Restated Amendment No. 3 dated November 17, 2006 to SF ProcessDevelopment and Cost Sharing Agreement dated November 26, 2002 by and between thecompany and International Business Machines Corporation.4.11.9(18)(+)
    
    Amendment No. 4 dated December 15, 2004 to SF Process Development and Cost SharingAgreement dated November 26, 2002 by and between the company and International BusinessMachines Corporation.4.11.10(11)(+)
    
    Refundable Cross Deposit Agreement dated November 26, 2002 by and between the companyand International Business Machines Corporation.4.11.11(15)(+)
    
    First Supplemental Agreement dated December 19, 2003 to the Refundable Cross DepositAgreement dated November 26, 2002 by and between the company and International BusinessMachines Corporation.4.11.12(25)(++)
    
    Letter Agreement dated March 27, 2006 to vary the terms of the Refundable Cross DepositAgreement dated November 26, 2002, as amended and supplemented, by and between thecompany and International Business Machines Corporation.4.11.13(27)(++)
    
    Master IBM Joint Development Terms and Conditions dated December 15, 2006 for jointdevelopment projects with International Business Machines Corporation4.11.14(27)(++)
    
    Participation Agreement dated January 1, 2007 by and between the company andInternational Business Machines Corporation.4.11.15(27)(++)
    
    Joint Development Project Agreement dated December 15, 2006 for 45nm Bulk-IndustryStandard Semiconductor Process Technology by and between the company and InternationalBusiness Machines Corporation.4.11.16(27)(++)
    
    Joint Development Project Agreement dated December 15, 2006 for 32nm Bulk-IndustryStandard Semiconductor Process Technology by and between the company and InternationalBusiness Machines Corporation.IBM, Infineon and Samsung4.12(16)(+)
    
    SF Process 65nm/45nm Development and Cost Sharing Agreement dated March 5, 2004 by andamong the company, International Business Machines Corporation, Infineon Technologies,A.G. and Samsung Electronics Co., Ltd.Motorola4.13(4)(+)
    
    Patent License Agreement dated July 1, 2003 by and between the company and Motorola, Inc.Property AgreementsFab 24.14(18)
    
    Sub-Lease dated October 19, 2004 by and between Singapore Technologies Pte Ltd and thecompany relating to Private Lots A12787 and A12787(a) Mukim No. 13 Sembawang.Fab 34.15.1(5)
    
    Sub-Lease dated February 17, 1998 by and between the company and Silicon ManufacturingPartners Pte Ltd.4.15.2(18)
    
    Sub-Lease dated October 19, 2004 by and between Singapore Technologies Pte Ltd and thecompany relating to Private Lot A12787(b) Mukim No. 13.
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Fabs 2 and 3 Site Slurry Treatment Plant4.16.1(23)
    
    Agreement for Sub-License and Sub-Lease (Private Lot A12787(k)) dated July 8, 2005 byand between Singapore Technologies Pte Ltd and the company.4.16.2(23)
    
    Novation Agreement dated July 8, 2005 by and among Singapore Technologies Pte Ltd, TerraInvestments Pte. Ltd. and the company relating to the Agreement for Sub-License andSub-Lease (Private Lot A12787(k)) dated July 8, 2005.4.16.3(27)
    
    Supplemental Agreement dated January 3, 2007 by and among Terra Investments Pte. Ltd.and the company relating to the Agreement for Sub-License and Sub-Lease (Private LotA12787(k) now known as A1964508) dated July 8, 2005.Fab 64.17.1(5)
    
    Building Agreement relating to Private Lot A12787(d) Mukim No. 13 Sembawang datedSeptember 24, 1999 by and between Jurong Town Corporation and Singapore Technologies PteLtd.4.17.2(5)
    
    Agreement for Sub-License and Sub-Lease (Private Lot A12787(d)) dated September 24, 1999by and between Singapore Technologies Pte Ltd and Chartered Silicon Partners Pte Ltd.4.17.3(18)
    
    Novation Agreement dated December 31, 2004 by and among Singapore Technologies Pte Ltd,Terra Investments Pte. Ltd. and Chartered Silicon Partners Pte Ltd relating to theAgreement for Sub-License and Sub-Lease (Private Lot A12787(d)) dated September 24,1999.Fab 74.18.1(13)
    
    Agreement for Sub-License and Sub-Lease (Private Lot A12787(e)) dated July 30, 2001 byand between Singapore Technologies Pte Ltd and the company.4.18.2(13)
    
    Building Agreement relating to Private Lot A12787(e) Woodlands Industrial Park D,  G.S.No. 3696K, Mukim No. 13 dated July 30, 2001 by and between Jurong Town Corporation andSingapore Technologies Pte Ltd.4.18.3(18)
    
    Novation Agreement dated December 31, 2004 by and among Singapore Technologies Pte Ltd,Terra Investments Pte. Ltd. and the company relating to the Agreement for Sub-Licenseand Sub-Lease (Private Lot A12787(e)) dated July 30, 2001.4.18.4(27)
    
    Supplemental Agreement dated January 3, 2007 by and among Terra Investments Pte. Ltd.and the company relating to the Agreement for Sub-License and Sub-Lease (Private LotA12787(e) now known as A1964507) dated July 30, 2001.4.19.1(27)
    
    Offer Letter dated February 16, 2006 by Jurong Town Corporation to Terra InvestmentsPte. Ltd. for the lease of land known as Private Lot A1964510 at Plot 6 WoodlandsIndustrial Park D in Woodlands Wafer Fab Park.4.19.2(27)
    
    Acceptance of Offer dated February 21, 2006 by our company to Terra Investments Pte Ltd.relating to Private Lot A1964510 at Plot 6 Woodlands Industrial Park D in WoodlandsWafer Fab Park.4.19.3(27)
    
    Acceptance of Offer dated February 24, 2006 by Terra Investments Pte. Ltd. to JurongTown Corporation relating to Private Lot A1964510 at Plot 6 Woodlands Industrial Park Din Woodlands Wafer Fab Park.Related Party Agreements4.20(11)
    
    Amended and Restated Turnkey Subcontract Agreement for Sort, Assembly and/or Final TestServices dated October 30, 2002 by and between the company and ST Assembly Test ServicesLtd.
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4.21(15)
    
    Mr. Chia Song Hwees, President and Chief Executive Officer, Contract of Employment.8(11)
    
    List of the companys subsidiaries.12.1(28)
    
    Certification of the President and Chief Executive Officer pursuant to Section 302 ofthe Sarbanes-Oxley Act of 2002.12.2(28)
    
    Certification of the Senior Vice President and Chief Financial Officer pursuant toSection 302 of the Sarbanes-Oxley Act of 2002.13.1(28)
    
    Certification of the President and Chief Executive Officer pursuant to 18 U.S.C Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2(28)
    
    Certification of the Senior Vice President and Chief Financial Officer pursuant to 18U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.1(27)
    
    Consent of KPMG relating to incorporation of audit report relating to CharteredSemiconductor Manufacturing Ltd.15.2(28)
    
    Consent of KPMG relating to incorporation of audit report relating to SiliconManufacturing Partners Pte Ltd.
 
 Notes:(1)
    
    Filed as an exhibit to our companys Registration Statement on Form F-1 (Registration
No. 333-88397), as filed with the Securities and Exchange Commission on October 4,1999.
The Memorandum and Articles of Association were first amended by shareholders
resolutions which were filed as an exhibit to our companys Current Report on Form 6-K
(File No. 000-27811), as submitted with the Securities and Exchange Commission on June
29, 2001, and were as set forth in the proxy statement for our companys annual general
meeting in May 2001 which was filed as an exhibit to our companys Current Report on
Form 6-K (File No. 000-27811), as submitted with the Securities and Exchange Commission
on April 18, 2001. The Memorandum and Articles of Association were further amended by
shareholders resolutions which were filed as an exhibit to our companys Current Report
on Form 6-K (File No. 000-27811), as submitted with the Securities and Exchange
Commission on August 18, 2005, and were set forth in the proxy statement for our
extraordinary general meeting in August 2005 which was filed as an exhibit to our
companys Current Report on Form 6-K (File No. 000-27811), as submitted with the
Securities and Exchange Commission on July 25, 2005. All such exhibits are incorporated
herein by reference.(2)
    
    Filed as an exhibit to our companys Amended Registration Statement on Form F-1/A, as
filed with the Securities and Exchange Commission on October 25, 1999, which exhibit is
incorporated herein by reference.(3)
    
    Submitted as an exhibit to our companys Current Report on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on November 23,
1999, which exhibit is incorporated herein by reference.(4)
    
    Submitted as an exhibit to our companys Third Quarterly Report 2003 on Form 6-K (File
No. 000-27811), as submitted with the Securities and Exchange Commission on November 13,
2003, which exhibit is incorporated herein by reference.(5)
    
    Filed as an exhibit to our companys Registration Statement on Form F-1 (Registration
No. 333-88397), as filed with the Securities and Exchange Commission on October 4, 1999.(6)
    
    Submitted as an exhibit to our companys Current Report on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on April 4, 2001,
which exhibit is incorporated herein by reference.(7)
    
    Filed as an exhibit to our companys Annual Report on Form 20-F (File No. 000-27811), as
filed with the Securities and Exchange Commission on March 11, 2002, which exhibit is
incorporated herein by reference.(8)
    
    Submitted as an exhibit to our companys First Quarterly Report 2001 on Form 6-K (File
No. 000-27811), as submitted with the Securities and Exchange Commission on May 15,
2001, which exhibit is incorporated herein by reference. 7




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(9)
    
    Submitted as an exhibit to our companys First Quarterly Report 2002 on Form 6-K (File
No. 000-27811), as submitted with the Securities and Exchange Commission on May 14,
2002, which exhibit is incorporated herein by reference.(10)
    
    Submitted as an exhibit to our companys Third Quarterly Report 2002 on Form 6-K (File
No. 000-27811), as submitted with the Securities and Exchange Commission on November 14,
2002, which exhibit is incorporated herein by reference.(11)
    
    Filed as an exhibit to our companys Annual Report on Form 20-F (File No. 000-27811), as
filed with the Securities and Exchange Commission on March 13, 2003, which exhibit is
incorporated herein by reference.(12)
    
    Submitted as an exhibit to our companys Second Quarterly Report 2003 on Form 6-K (File
No. 000-27811), as submitted with the Securities and Exchange Commission on August 13,
2003, which exhibit is incorporated herein by reference.(13)
    
    Submitted as an exhibit to our companys Third Quarterly Report 2001 on Form 6-K (File
No. 000-27811), as submitted with the Securities and Exchange Commission on November 14,
2001, which exhibit is incorporated herein by reference.(14)
    
    Submitted as an exhibit to our companys Current Report on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on November 14,
2000, which exhibit is incorporated herein by reference.(15)
    
    Filed as an exhibit to our companys Annual Report on Form 20-F (File No. 000-27811), as
filed with the Securities and Exchange Commission on March 3, 2004, which exhibit is
incorporated herein by reference.(16)
    
    Submitted as an exhibit to our companys First Quarterly Report 2004 on Form 6-K (File
No. 000-27811), as submitted with the Securities and Exchange Commission on May 10,
2004, which exhibit is incorporated herein by reference.(17)
    
    Submitted as an exhibit to our companys Third Quarterly Report 2004 on Form 6-K (File
No. 000-27811), as submitted with the Securities and Exchange Commission on November 8,
2004, which exhibit is incorporated herein by reference.(18)
    
    Filed as an exhibit to our companys Annual Report on Form 20-F (File No. 000-27811), as
filed with the Securities and Exchange Commission on March 7, 2005, which exhibit is
incorporated herein by reference.(19)
    
    Submitted as an exhibit to our companys Current Report 2005 on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on August 17, 2005,
which exhibit is incorporated herein by reference.(20)
    
    Submitted as an exhibit to our companys Current Report on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on August 4, 2005,
which exhibit is incorporated herein by reference.(21)
    
    Submitted as an exhibit to our companys Current Report on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on August 18, 2005,
which exhibit is incorporated herein by reference.(22)
    
    Submitted as an exhibit to our companys First Quarterly Report on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on May 6, 2005,
which exhibit is incorporated herein by reference.(23)
    
    Filed as an exhibit to our companys Annual Report on Form 20-F (File No. 000-27811), as
filed with the Securities and Exchange Commission on March 1, 2006, which exhibit is
incorporated herein by reference.(24)
    
    Submitted as an exhibit to our companys Current Report on Form 6-K (file No.
000-27811), as submitted with the Securities and Exchange Commission on April 5, 2006,
which exhibit is incorporated herein by reference.(25)
    
    Submitted as an exhibit to our companys First Quarterly Report on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on May 10, 2006,
which exhibit is incorporated herein by reference. 8




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##### Table of Contents



(26)
    
    Submitted as an exhibit to our companys Current Report on Form 6-K (File No.
000-27811), as submitted with the Securities and Exchange Commission on August 9, 2006,
which exhibit is incorporated herein by reference.(27)
    
    Previously filed as an exhibit to Chartered Semiconductor Manufacturing Ltd.s annual
report on Form 20-F for the year ended December 31, 2006 on March 15, 2007.(28)
    
    Filed herewith.(+)
    
    Certain portions of this exhibit have been omitted pursuant to a confidential treatment
order of the Securities and Exchange Commission. The omitted portions have been
separately filed with the Commission.(++)
    
    Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The omitted
portions have been separately filed with the Commission. 9




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SIGNATURES
 th
 CHARTERED SEMICONDUCTOR MANUFACTURING LTD.By:

/s/
George ThomasName:
    George ThomasTitle:
    Senior Vice President and Chief Financial Officer  SIGNATURE
    
    TITLE
    
    DATE/s/ James A. Norling
    
    Chairman of the Board
    
    June 29, 2007James A. Norling/s/ Chia Song Hwee
    
    President and Chief Executive
    
    June 29, 2007Officer (principal executive officer)Chia Song Hwee/s/ George Thomas
    
    Senior Vice President and Chief
    
    June 29, 2007Financial Officer (principal financialGeorge Thomas
    
    and accounting officer)/s/ Andre Borrel
    
    Director
    
    June 29, 2007Andre Borrel/s/ Charles E. Thompson
    
    Director
    
    June 29, 2007Charles E. Thompson/s/ Tsugio Makimoto
    
    Director
    
    June 29, 2007Tsugio Makimoto/s/ Tay Siew Choon
    
    Director
    
    June 29, 2007Tay Siew Choon/s/ Peter Seah Lim Huat
    
    Director
    
    June 29, 2007Peter Seah Lim Huat/s/ Philip Tan Yuen Fah
    
    Director
    
    June 29, 2007Philip tan yuen fah/s/ Pasquale Pistorio
    
    Director
    
    June 29, 2007Pasquale Pistorio
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##### Table of Contents



SIGNATURE
    
    TITLE
    
    DATE/s/ Steven H. Hamblin
    
    Director
    
    June 29, 2007Steven H. Hamblin/s/ Maurizio Ghirga
    
    Director
    
    June 29, 2007Maurizio Ghirga
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##### Table of Contents



SILICON MANUFACTURING PARTNERS PTE LTD
  
    Table of Contents  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
       
 FS1
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
 
 BALANCE SHEETS  in US Dollars
 As of
December 31In thousands (except per share data)
 2005
    
    
    2006(Unaudited)ASSETSCash and cash equivalents
    
    $
    20,788
    
    
    $
    26,726Receivables, net
    
    
    6,447
    
    
    
    6,268Receivables from related parties
    
    
    22,633
    
    
    
    19,598Inventories
    
    
    19,003
    
    
    
    17,346Prepaid expenses
    
    
    2,230
    
    
    
    2,125Total current assets
    
    
    71,101
    
    
    
    72,063Property, plant and equipment, net
    
    
    55,758
    
    
    
    21,972Other non-current assets
    
    
    34
    
    
    
    55Total assets
    
    $
    126,893
    
    
    $
    94,090LIABILITIES AND SHAREHOLDERS EQUITYPayables
    
    $
    10,258
    
    
    $
    11,066Payables to related parties
    
    
    16,691
    
    
    
    24,236Other current liabilities
    
    
    4,362
    
    
    
    5,314Total current liabilities
    
    
    31,311
    
    
    
    40,616Non-current liabilities
    
    
    8
    
    
    
    19Total liabilities
    
    
    31,319
    
    
    
    40,635Ordinary share capital:Authorized: 1,000,000 sharesIssued and outstanding: 323,965 shares
    
    
    192,389
    
    
    
    152,389Accumulated deficit
    
    
    (96,797
    )
    
    
    (98,933
    )Accumulated other comprehensive loss
    
    
    (18
    )
    
    
    (1
    )Total shareholders equity
    
    $
    95,574
    
    
    $
    53,455Commitments and contingenciesTotal liabilities and shareholders equity
    
    $
    126,893
    
    
    $
    94,090
 See accompanying notes to financial statements
 FS2
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
 
 STATEMENTS OF INCOME  in US Dollars
 For the Year Ended December 31, 2004 and the Twelve Month Periods Ended December 31, 2005
and 2006
In thousands
 2004
    
    
    2005
    
    
    2006(Unaudited)Net revenue
    
    $
    303,570
    
    
    $
    201,345
    
    
    $
    197,932Cost of revenue
    
    
    (267,967
    )
    
    
    (196,470
    )
    
    
    (159,922
    )Gross profit
    
    
    35,603
    
    
    
    4,875
    
    
    
    38,010OPERATING EXPENSESGeneral and administrative
    
    
    4,762
    
    
    
    4,426
    
    
    
    3,175Other operating expenses (income), net
    
    
    (208
    )
    
    
    5
    
    
    
    126Total operating expenses
    
    
    4,554
    
    
    
    4,431
    
    
    
    3,301Other income (loss), net
    
    
    (2,543
    )
    
    
    8
    
    
    
    13Interest income
    
    
    823
    
    
    
    1,386
    
    
    
    1,535Interest expense and amortization of
debt discount
    
    
    (8,558
    )
    
    
    
    
    
    
    Income before income taxes
    
    
    20,771
    
    
    
    1,838
    
    
    
    36,257Income tax expense
    
    
    65
    
    
    
    352
    
    
    
    216Net income
    
    $
    20,706
    
    
    $
    1,486
    
    
    $
    36,041
 See accompanying notes to financial statements
 FS3
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
 
 STATEMENTS OF COMPREHENSIVE INCOME  in US Dollars
 For the Year Ended December 31, 2004 and the Twelve Month Periods Ended December 31, 2005
and 2006
In thousands
 2004
    
    
    2005
    
    
    2006(Unaudited)Net income
    
    $
    20,706
    
    
    $
    1,486
    
    
    $
    36,041Net unrealized gains on change in cash flow
hedging fair values
    
    
    8,002
    
    
    
    
    
    
    
    Reclassification of cash flow hedging
losses into earnings
    
    
    48
    
    
    
    37
    
    
    
    17Other comprehensive income
    
    
    8,050
    
    
    
    37
    
    
    
    17Comprehensive income
    
    $
    28,756
    
    
    $
    1,523
    
    
    $
    36,058
 See accompanying notes to financial statements
 FS4
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
 
 STATEMENTS OF SHAREHOLDERS EQUITY  in US Dollars
In thousands
 AccumulatedOther
    
    
    Total ShareOrdinary Share
    
    
    Accumulated
    
    
    Compre-
    
    
    holdersCapital
    
    
    Deficit
    
    
    hensive Loss
    
    
    EquityNo.
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance at January 1, 2004
    
    
    425,000
    
    
    
    252,389
    
    
    
    (41,501
    )
    
    
    (8,105
    )
    
    
    202,783Net income
    
    
    
    
    
    
    
    
    
    
    20,706
    
    
    
    
    
    
    
    20,706Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,050
    
    
    
    8,050Dividend paid
    
    
    
    
    
    
    
    
    
    
    (36,680
    )
    
    
    
    
    
    
    (36,680
    )Balance at December 31, 2004
    
    
    425,000
    
    
    
    252,389
    
    
    
    (57,475
    )
    
    
    (55
    )
    
    
    194,859Net income (unaudited)
    
    
    
    
    
    
    
    
    
    
    1,486
    
    
    
    
    
    
    
    1,486Other comprehensive income
(unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    37Return of capital (unaudited)
    
    
    (101,035
    )
    
    
    (60,000
    )
    
    
    
    
    
    
    
    
    
    
    (60,000
    )Dividend paid (unaudited)
    
    
    
    
    
    
    
    
    
    
    (40,808
    )
    
    
    
    
    
    
    (40,808
    )Balance at December 31,
2005 (unaudited)
    
    
    323,965
    
    
    
    192,389
    
    
    
    (96,797
    )
    
    
    (18
    )
    
    
    95,574Net income
    
    
    
    
    
    
    
    
    
    
    36,041
    
    
    
    
    
    
    
    36,041Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    17Return of capital
    
    
    
    
    
    
    (40,000
    )
    
    
    
    
    
    
    
    
    
    
    (40,000
    )Dividend paid
    
    
    
    
    
    
    
    
    
    
    (38,177
    )
    
    
    
    
    
    
    (38,177
    )Balance at December 31, 2006
    
    
    323,965
    
    
    
    152,389
    
    
    
    (98,933
    )
    
    
    (1
    )
    
    
    53,455
 See accompanying notes to financial statements
 FS5
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
 
 STATEMENTS OF CASH FLOWS  in US Dollars
 For the Year Ended December 31, 2004 and the Twelve Month Periods Ended December 31, 2005
and 2006
In thousands
 2004
    
    
    2005
    
    
    2006(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    20,706
    
    
    $
    1,486
    
    
    $
    36,041Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation of property, plant and equipment
    
    
    137,415
    
    
    
    84,105
    
    
    
    36,702Gain on disposal of property, plant and
equipment
    
    
    (5
    )
    
    
    
    
    
    
    (50
    )Others, net
    
    
    (1,093
    )
    
    
    183
    
    
    
    (4
    )Change in assets and liabilities:Receivables
    
    
    9,675
    
    
    
    (1,843
    )
    
    
    190Receivables with related parties
    
    
    16,162
    
    
    
    (2,305
    )
    
    
    3,035Payables with related parties
    
    
    (14,405
    )
    
    
    (1,165
    )
    
    
    1,045Inventories
    
    
    10,214
    
    
    
    1,910
    
    
    
    1,657Prepaid expenses and other current assets
    
    
    111
    
    
    
    85
    
    
    
    105Payables and other current liabilities
    
    
    (8,784
    )
    
    
    1,380
    
    
    
    2,542Income taxes payable
    
    
    165
    
    
    
    (1,276
    )
    
    
    (162
    )Net cash provided by operating activities
    
    
    170,161
    
    
    
    82,560
    
    
    
    81,101CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of property, plant and
equipment
    
    
    54
    
    
    
    11
    
    
    
    50Payments for property, plant and equipment
    
    
    (19,797
    )
    
    
    (6,902
    )
    
    
    (3,536
    )Net cash used in investing activities
    
    
    (19,743
    )
    
    
    (6,891
    )
    
    
    (3,486
    )CASH FLOWS FROM FINANCING ACTIVITIESDebt repayments
    
    
    (171,428
    )
    
    
    
    
    
    
    Dividends paid
    
    
    (71,188
    )
    
    
    (40,808
    )
    
    
    (38,177
    )Return of capital
    
    
    
    
    
    
    (51,500
    )
    
    
    (33,500
    )Net cash used in financing activities
    
    
    (242,616
    )
    
    
    (92,308
    )
    
    
    (71,677
    )Net increase (decrease) in cash and cash
equivalents
    
    
    (92,198
    )
    
    
    (16,639
    )
    
    
    5,938Cash and cash equivalents at the beginning of
the year
    
    
    129,625
    
    
    
    37,427
    
    
    
    20,788Cash and cash equivalents at the end of the year
    
    $
    37,427
    
    
    $
    20,788
    
    
    $
    26,726Supplemental Cash Flow InformationInterest paid (net of amounts capitalized)
    
    
    7,764
    
    
    
    
    
    
    
    Income taxes paid
    
    
    
    
    
    
    1,579
    
    
    
    183Non-cash investing and financing activitiesProperty, plant and equipment acquired on credit
    
    
    174
    
    
    
    967
    
    
    
    347
 See accompanying notes to financial statements
 FS6
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
 
 NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
 In thousands (except per share data)
 1
    
    Background and Summary of Significant Accounting Policies(a) Business and OrganizationSilicon Manufacturing Partners Pte Ltd (the Company) was incorporated in 1998. The immediate
holding company is Agere Systems Singapore Pte Ltd (Agere), incorporated in the Republic of
Singapore. The ultimate holding company is Agere Systems Inc., incorporated in the United States
of America. The Company is owned 51% by Agere and 49% by Chartered Semiconductor Manufacturing Ltd
(Chartered), incorporated in Singapore.The principal activities of the Company are those of an independent foundry that fabricates
semiconductor integrated circuits on silicon wafers using advanced production facilities and the
proprietary integrated circuit designs of its customers in the semiconductor industry. The Company
operates in Singapore and its principal markets are United States of America, Taiwan and Europe.The semiconductor industry has historically been highly cyclical and, at various times, has
experienced significant economic downturns characterized by production overcapacity, reduced
product demand and rapid erosion of selling prices. The market for semiconductors is characterized
by rapid technological change, intense competition and fluctuations in end-user demand.In August 2005, the Companys board of directors approved a change to the Companys fiscal year end
from December 31 to September 30 so as to coincide with the fiscal year end of Agere as required by
Singapore law. These financial statements are prepared for the twelve-month periods ending
December 31 for filing together with the Annual Report of Chartered on Form 20-F with the U.S.
Securities and Exchange Commission (SEC) as required by SEC Rule S-X 3-09. Under the requirements
of Rule S-X 3-09, insofar as practicable, the financial statements of the Company filed together
with Chartereds Form 20-F should be as of the same dates and for the same periods as the audited
consolidated financial statements of Chartered.(b) Basis of PresentationThe financial statements have been prepared in accordance with United States of America
generally accepted accounting principles (US GAAP).(c) Reclassifications and AdjustmentsReclassifications and certain immaterial classification corrections have been made to prior
years financial statements to conform to classifications used in the current year. These include
reporting operating grant income as a reduction of the expenses that the grants are intended to
reimburse rather than as other income and certain other immaterial reclassification.Until January 30, 2006, ordinary shares of the Company had a par value of S$1.00. The Singapore
Companies (Amendment) Act 2005, which came into the effect on January 30, 2006, abolished the
concept of par value and authorized capital. Accordingly, the amounts previously disclosed
under ordinary shares and additional paid-in capital line items have been combined as Ordinary
Share Capital.
 FS7
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 (d) Use of EstimatesThe preparation of the financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported revenues and
expenses during the reporting period. Estimates are based on historical experience, current
conditions and on various other assumptions that are believed to be reasonable under the
circumstances. Significant items subject to judgement and such estimates include estimated useful
lives and salvage values of long-lived assets, the recoverability of the carrying value of
long-lived assets, valuation of accounts receivable and inventories, the recognition and
measurement of revenue and sales credits and returns allowance. Actual results could differ from
these estimates.During 2006, the Company changed the estimated useful lives in relation to equipment and machinery
from 5 years to 3 to 8 years. The change in the estimated useful lives is a change in accounting
estimate that was made prospectively. The change in accounting estimate does not have material
impact to the Companys financial statements.(e) Foreign CurrencyThe functional currency of the Company is the US dollar. Assets and liabilities which are
denominated in foreign currencies are translated into the functional currency at the rates of
exchange prevailing at the balance sheet date. Foreign currency transactions are translated using
the exchange rates prevailing at the date of transactions. Foreign exchange gains or losses,
resulting from the settlement of foreign currency transactions and from the translation at
financial year-end exchange rates of assets and liabilities denominated in foreign currencies, are
included in the line item Other operating expenses (income), net in the statements of income.(f) Business and Credit ConcentrationsThe Company depends, and will continue to depend, for a significant portion of its revenue on
a relatively limited number of customers who from time to time may be concentrated in particular
end markets. The three largest customers of the Company, other than related parties, accounted for
73%, 77% (unaudited) and 60% of the Companys net revenue in the years ended December 31, 2004,
2005 and 2006, respectively. Total accounts receivable from these customers was $4,765 (unaudited)
and $4,543 at December 31, 2005 and 2006, respectively. The Companys top customer profile may
change from period to period depending on the strength of various market sectors.The Company obtains most of its raw materials and supplies, including critical raw materials such
as raw semiconductor wafers, from a limited number of vendors. Some of these raw materials and
supplies are available from a limited number of vendors in limited quantities and their procurement
may require a long lead time. In certain instances, the Company only has one qualified supplier
for raw materials and supplies.The Company also depends on a limited number of original equipment manufacturers and vendors
that make and sell certain complex equipment and equipment spare parts that the Company uses in its
manufacturing processes. In the event of shortage of supply of equipment spare parts, the Company
would need to qualify alternative sources and/or equipment spare parts.
 FS8
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 Financial instruments that potentially subject the Company to concentrations of credit risk
consist principally of cash, derivative financial instruments and receivables. The Company
mitigates the concentration of its credit risk in trade receivables through its credit evaluation
process, credit policies and credit control and collection procedures.The Companys cash and cash equivalents are placed with major international banks and financial
institutions. Cash and cash equivalents deposited with a single counterparty bank accounted for
68% and 52% of total balances at December 31, 2005 and 2006, respectively.The amounts related to derivative instruments which are subject to credit risk are generally
limited to the amounts, if any, by which a counterpartys obligations exceed the obligations of the
Company with that counterparty. The Companys hedging practices are further described in Note 13.(g) Cash EquivalentsCash equivalents consist of highly liquid investments that are readily convertible into cash
and have original maturities of three months or less.(h) Accounts ReceivableThe Company reviews its accounts receivable on a periodic basis and makes specific allowances
when there is doubt as to the collectibility of individual receivable balances. In evaluating the
collectibility of individual receivable balances, the Company considers the age of the balance, the
customers historical payment history, their current credit-worthiness and current economic trends.(i) InventoriesInventories consist of work in progress, raw materials and consumable supplies and spares and
are stated at the lower of cost or market (net realizable value). Cost is determined using
standard cost and an allocation of the cost variances arising in the period of production, which
approximates actual costs determined on the weighted average basis. Standard cost is based on
estimates of materials, labor and other costs incurred in each process step associated with the
manufacture of the Companys products. Labor and overhead costs are allocated to each step in the
wafer production process based on normal fab capacity utilization, with costs arising from abnormal
under-utilization of capacity expensed when incurred.
 FS9
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 (j) Derivative Instruments and Hedging ActivitiesThe Company records derivatives on the balance sheet as assets or liabilities measured at fair
value in accordance with Statement of Financial Accounting Standards (SFAS) No. 133, Accounting
for Derivative Instruments and Certain Hedging Activities, as amended. On the date a derivative
contract is entered into, the Company will consider if the derivative instrument is part of a
hedging relationship. Once a hedging relationship is established, the Company designates the
derivative as either a hedge of the fair value of a recognized asset or liability or of an
unrecognized firm commitment (fair-value hedge), a hedge of a forecasted transaction or of the
variability of cash flows to be received or paid related to a recognized asset or liability
(cash-flow hedge), or a foreign-currency fair-value or cash-flow hedge (foreign-currency
hedge). The Company formally documents all relationships between hedging instruments and hedged
items, as well as its risk-management objective and strategy for undertaking various hedge
transactions, at the hedges inception. This process includes linking all derivatives that are
designated as fair-value, cash-flow, or foreign-currency hedges to specific assets and liabilities
on the balance sheet or to specific firm commitments or forecasted transactions. The Company also
formally assesses, both at the hedges inception and on an ongoing basis, whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes in fair values or
cash flows of hedged items.Changes in the fair value of derivatives that are highly effective and that are designated and
qualify as fair-value hedges are recorded in earnings, along with the loss or gain on the hedged
assets or liabilities or unrecognized firm commitment of the hedged item that are attributable to
the hedged risks. Changes in the fair value of derivatives that are highly effective and that are
designated and qualify as cash-flow hedges are recorded in other comprehensive income until
earnings are affected by the variability in cash flows of the designated hedged items. Changes in
the fair value of derivatives that are highly effective as hedges and that are designated and
qualify as foreign-currency hedges are recorded in either earnings or other comprehensive income,
depending on whether the hedge transaction is a fair-value hedge or a cash-flow hedge. Changes in
the fair value of derivative instruments that are not designated as part of a hedging relationship
are reported in current period earnings.The Company discontinues hedge accounting prospectively when it determines that a derivative is no
longer effective in offsetting changes in the fair value or cash flows of the hedged item, the
derivative expires or is sold, terminated, or exercised, the derivative is de-designated as a
hedging instrument because it is unlikely that a forecasted transaction will occur, a hedged firm
commitment no longer meets the definition of a firm commitment, or management determines that
designation of the derivative as a hedging instrument is no longer appropriate. When hedge
accounting is discontinued because it is determined that the derivative no longer qualifies as an
effective fair-value hedge, the Company no longer adjusts the hedged asset or liability for changes
in fair value. The adjustment of the carrying amount of the hedged asset or liability is accounted
for in the same manner as other components of the carrying amount of that asset or liability. When
hedge accounting is discontinued because the hedged item no longer meets the definition of a firm
commitment, the Company removes any asset or liability that was recorded pursuant to recognition of
the firm commitment from the balance sheet and recognizes any gain or loss in earnings. When hedge
accounting is discontinued because it is probable that a forecasted transaction will not occur,
gains and losses that were accumulated in other comprehensive income (loss) are recognized
immediately in earnings. In all situations in which hedge accounting is discontinued, the Company
continues to carry the derivative at its fair value on the balance sheet, and recognizes any
changes in its fair value in earnings.
 FS10
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 (k) Property, Plant and EquipmentProperty, plant and equipment are recorded at cost and depreciated to their estimated salvage
values using the straight-line method over their estimated useful lives as follows:
 Mechanical and electrical installations
    
    
    
    10 yearsEquipment and machinery
    
    
    
    3 to 8 yearsOffice and computer equipment
    
    
    
    2 to 5 years
 The Company capitalizes interest with respect to major assets under installation and construction
until such assets are ready for use. Interest capitalized is based on the average cost of the
Companys pooled borrowings. Repairs and replacements of a routine nature are expensed, while
those that extend the life of an asset are capitalized. Upon retirement or disposal of assets, the
cost and related accumulated depreciation are removed from the balance sheets and any gain or loss
is included in the statements of income.(l) Impairment of Long-Lived AssetsThe Company reviews long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. Recoverability of
long-lived asset groups to be held and used are measured by a comparison of the carrying amount to
the sum of the undiscounted cash flows expected to result from the use and eventual disposition of
the asset group. If an asset group is considered to be impaired, the impairment loss is measured
as the amount by which the carrying amounts of the long-lived assets exceed their fair value.Long-lived assets to be disposed of by sale are measured at the lower of their carrying amounts or
fair value less cost to sell, and depreciation is ceased. Long-lived assets to be abandoned are
considered held and used until they are disposed of, which is the point at which they cease to be
used.(m) Revenue RecognitionThe Company derives revenue primarily from fabricating semiconductor wafers and, to a lesser
extent, from providing associated subcontracted assembly and test services as well as
pre-fabricating services such as masks generation and engineering services. The Company enters
into arrangements with customers which typically include some or all of the above deliverables.When arrangements include multiple deliverables, the Company first determines whether each
deliverable meets the separation criteria in FASB Emerging Issues Task Force (EITF) Issue 00-21,
Accounting for Revenue Arrangements with Multiple Deliverables. In general, a deliverable (or a
group of deliverables) meets the separation criteria if the deliverable has standalone value to the
customer and if there is objective and reliable evidence of the fair value of the remaining
deliverables in the arrangement. Each deliverable that meets the separation criteria is considered
a separate unit of accounting. The total arrangement consideration is then allocated to each
unit of accounting based on their relative fair values. Substantially all of the Companys
arrangements for the sale of semiconductor wafers and related services consist of a single unit of
accounting.
 FS11
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 Revenue for each unit of accounting is recognized when the contractual obligations have been
performed and title and risk of loss has passed to the customer, there is evidence of a final
arrangement as to the specific terms of the agreed upon sales, selling prices to the customers are
fixed or determinable, collection of the revenue is reasonably assured and, where applicable,
delivery has occurred. Generally this results in revenue recognition upon shipment of wafers.
Revenue represents the invoiced value of goods and services supplied excluding goods and services
tax, less allowances for estimated sales credits and returns. The Company estimates allowances for
sales credits and returns based on historical experience and managements estimate of the level of
future claims. Additionally, the Company accrues for specific items at the time their existence is
known and amounts are estimable.(n) Government GrantsIncome-related government grants are subsidies of expenses incurred. Income-related grants
are credited to the related expenses when expenditures already incurred constitute qualifying
expenditures for purposes of reimbursement under the grants.(o) Product WarrantiesThe Company guarantees that products will meet the stated functionality as agreed to in each
sales arrangement. The Company provides for the estimated warranty costs under these guarantees
based upon historical experience and managements estimate of the level of future claims, and
accrues for specific items at the time their existence is known and the amounts are estimable.
Expenses for warranty costs were not significant in any of the years presented.(p) Operating LeasesThe Company leases its fab from its minority shareholder under a non-cancellable operating
lease, with an option to renew upon expiry of the lease term (the Operating Lease). Rentals
under the Operating Lease and other operating leases are expensed on a straight-line basis over the
term of the leases.
 FS12
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 (q) Income TaxesIncome taxes are accounted for under the asset and liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the
carrying amounts of existing assets and liabilities in the financial statements and their
respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. A valuation allowance is recorded for deferred tax assets where
it is more likely than not that they will not be realized.
 2
    
    Related Party TransactionsUnder the strategic alliance agreement of the Company with its two shareholders, the
shareholders do not share the Companys net results in the same ratio as their equity holdings.
Instead, each shareholder is entitled to the gross profits from sales to the customers that it
directs to the Company after deducting its share of the overhead costs of the Company.Under the assured supply and demand agreement that both shareholders signed with the Company, with
effect from January 1, 2001, each shareholder is billed for unutilised allocated wafer capacity if
the quantity of wafers started for production (wafer starts) based on their respective orders is
less than its allocated capacity. Such billed amounts represent the Companys unrecovered overhead
costs as a result of the allocated capacity not being taken up by one, or both, of the
shareholders. During the financial years ended December 31, 2005 and 2006, the shareholders
jointly agreed with the Company to waive the requirement for such billings even though their wafer
starts fell below their allocated capacities.In September 2004, the two shareholders of the Company entered into a supplementary agreement to
the strategic alliance agreement. Among other things, the supplementary agreement provides that
the Company can pay dividends out of the profits determined on a year-to-year basis rather than on a
cumulative basis, as previously was the case.Significant related party transactionsFor the purpose of these financial statements, parties are considered to be related to the Company
if the Company has the ability, directly or indirectly, to control the party or exercise
significant influence over the party in making financial and operating decisions, or vice versa, or
where the Company and the party are subject to common control or common significant influence.
Related parties may be individuals or other entities.An affiliated company is defined as one, other than a related company, which has common direct or
indirect shareholders or common directors with the Company.
 FS13
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 Other than those disclosed elsewhere in these financial statements, the following were
significant transactions with related parties on terms agreed between the parties:
 2004
    
    
    2005
    
    
    2006(Unaudited)Immediate Holding CompanyRecharge of employee related and other expenses to the Company
    
    $
    82
    
    
    $
    640
    
    
    $
    1,065Sale of processed wafers
    
    
    162,927
    
    
    
    96,800
    
    
    
    64,477Affiliates of Immediate Holding CompanyRecharge of employee related and other expenses to the Company
    
    
    3,882
    
    
    
    3,083
    
    
    
    2,190Sale of processed wafers
    
    
    12,773
    
    
    
    31,561
    
    
    
    51,025Purchase of processed wafers
    
    
    
    
    
    
    856
    
    
    
    Purchase of property, plant and equipment
    
    
    
    
    
    
    976
    
    
    
    Minority ShareholderPurchase of property, plant and equipment
    
    
    462
    
    
    
    
    
    
    
    Rental expense
    
    
    15,307
    
    
    
    15,662
    
    
    
    15,958Recharge of employee related and other expenses to the Company
    
    
    33,199
    
    
    
    36,435
    
    
    
    36,490Sale of processed wafers
    
    
    1,371
    
    
    
    149
    
    
    
    52Sale of property, plant and equipment
    
    
    
    
    
    
    11
    
    
    
    Recharge of other expenses from the Company
    
    
    499
    
    
    
    302
    
    
    
    1,071Affiliates of Minority ShareholderPurchase of property, plant and equipment
    
    
    43
    
    
    
    53
    
    
    
    Purchase of processed wafers
    
    
    180
    
    
    
    155
    
    
    
    151Recharge of other expenses to the Company
    
    
    217
    
    
    
    161
    
    
    
    190Sale of processed wafers
    
    
    270
    
    
    
    69
    
    
    
    23Recharge of other expenses from the Company
    
    
    
    
    
    
    24
    
    
    
    58
 The amounts due from related parties are:
 December 312005
    
    
    2006(Unaudited)Amount due from immediate holding company
    
    $
    15,234
    
    
    $
    5,270Amount due from affiliates of immediate holding company
    
    
    7,304
    
    
    
    13,509Amount due from minority shareholder
    
    
    65
    
    
    
    815Amount due from affiliates of minority shareholder
    
    
    30
    
    
    
    4$
    22,633
    
    
    $
    19,598
 FS14
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 The amounts due to related parties are:
 December 312005
    
    
    2006(Unaudited)Amount due to immediate holding company
    
    $
    4,528
    
    
    $
    7,892Amount due to affiliates of immediate holding company
    
    
    336
    
    
    
    270Amount due to minority shareholder
    
    
    11,729
    
    
    
    16,009Amount due to affiliates of minority shareholder
    
    
    98
    
    
    
    65$
    16,691
    
    
    $
    24,236
 The amounts due to related parties above include unpaid obligation relating to the return of
capital that is further described in Note 9.The balances with related parties are unsecured, interest free and repayable within 12 months.3
    
    Cash and Cash Equivalents
 December 312005
    
    
    2006(Unaudited)Cash at banks and on hand
    
    $
    5,283
    
    
    $
    18,572Short-term deposits with banks
    
    
    15,505
    
    
    
    8,154$
    20,788
    
    
    $
    26,726
 Short-term deposits with banks consist of fixed deposits with original maturities of 90 days or
less.4
    
    Receivables, net
 December 312005
    
    
    2006(Unaudited)Trade receivables
    
    $
    7,897
    
    
    $
    6,781Allowance for sales credits and returns
    
    
    (1,537
    )
    
    
    (568
    )Trade receivables, net of allowance
    
    
    6,360
    
    
    
    6,213Other receivables
    
    
    87
    
    
    
    55$
    6,447
    
    
    $
    6,268
 FS15
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 Movement in the allowance for sales credits and returns is as follows:
 December 312005
    
    
    2006(Unaudited)Beginning
    
    $
    1,505
    
    
    $
    1,537Utilized in year
    
    
    (2,410
    )
    
    
    (1,752
    )Reversed during the year
    
    
    (474
    )
    
    
    (992
    )Charge for the year
    
    
    2,916
    
    
    
    1,775Ending
    
    $
    1,537
    
    
    $
    568
 5
    
    Inventories
 December 312005
    

    
    2006(Unaudited)Raw materials
    
    $
    967
    
    
    $
    2,706Work-in-progress
    
    
    17,996
    
    
    
    14,609Consumable supplies and spares
    
    
    40
    
    
    
    31$
    19,003
    
    
    $
    17,346
 6
    
    Property, Plant and Equipment
 December 312005
    

    
    2006(Unaudited)CostMechanical and electrical installations
    
    $
    4,814
    
    
    $
    4,846Equipment and machinery
    
    
    801,946
    
    
    
    805,043Office and computer equipment
    
    
    10,130
    
    
    
    10,125Assets under installation and construction
    
    
    834
    
    
    
    621Total cost
    
    $
    817,724
    
    
    $
    820,635Accumulated depreciation
    
    $
    761,966
    
    
    $
    798,663Property, plant and equipment, net
    
    $
    55,758
    
    
    $
    21,972
 Depreciation amounted to $137,415, $84,105 (unaudited) and $36,702 for the years ended December 31,
2004, 2005 and 2006, respectively.
 FS16
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 7
    
    Other Current Liabilities
 December 312005
    
    
    2006(Unaudited)Accrued employee bonuses and related expenses
    
    $
    3,380
    
    
    $
    3,927Other accrued expenses
    
    
    542
    
    
    
    1,051Other current liabilities
    
    
    168
    
    
    
    226Income taxes payable
    
    
    272
    
    
    
    110$
    4,362
    
    
    $
    5,314
 8
    
    Income TaxesSubstantially all of the Companys pre-tax income and income tax expense is sourced from
Singapore. The Company has been granted pioneer status under the Economic Expansion Incentives
(Relief from Income Tax) Act (Chapter 86) of Singapore for the wafer fabrication of integrated
circuits for a ten-year period beginning May 1, 2000. During the period in which pioneer status is
effective, subject to compliance with certain conditions, income arising from the pioneer trade is
exempt from Singapore income tax. Income arising from activities not covered under the pioneer
incentive (hereinafter referred to as non-qualifying income) is taxed at the normal Singapore
corporate tax rate, which was 20% for the years ended December 31, 2004, 2005 and 2006. Thus, the
income tax expenses for the years ended December 31, 2004, 2005 and 2006 are primarily on
non-qualifying income, such as the interest income.Income tax expense consists of the following:
 2004
    
    
    2005
    
    
    2006(Unaudited)Current expense
    
    $
    165
    
    
    $
    304
    
    
    $
    237Deferred expense (benefit)
    
    
    (100
    )
    
    
    48
    
    
    
    (21
    )$
    65
    
    
    $
    352
    
    
    $
    216
 A reconciliation of the expected tax expense computed by applying the Singapore statutory tax rate
of 20% for 2004, 2005 and 2006 to income before income taxes to the income tax expense is as
follows:
 2004
    
    
    2005
    
    
    2006(Unaudited)Income tax expense computed at the Singapore statutory tax rate
    
    $
    4,154
    
    
    $
    367
    
    
    $
    7,251Permanent non-deductible expenses
    
    
    767
    
    
    
    53
    
    
    
    25Effect of pioneer status, including wear and tear allowances not recognized as deferred tax benefit
    
    
    (4,856
    )
    
    
    (118
    )
    
    
    (7,054
    )All other items, net
    
    
    
    
    
    
    50
    
    
    
    (6
    )Income tax expense
    
    $
    65
    
    
    $
    352
    
    
    $
    216
 FS17
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 Deferred tax assets which are non-current and relate to Singapore, consist of the following:
 December 312005
    
    
    2006(Unaudited)Property, plant and equipment
    
    $
    34
    
    
    $
    55
 Under Singapore tax law, loss carryforwards and tax depreciation of property, plant and equipment
(hereinafter referred to as wear and tear allowances) are deductible to the extent of income before
loss carryforwards and wear and tear allowances. Unutilised losses and wear and tear allowances
can be carried forward indefinitely to set off against income in future tax years, subject to
compliance with certain conditions. As of December 31, 2006, the
Company estimates that it will not have any wear and tear allowance
carryforwards. In addition, the Company does not have any tax losses
carryforwards as of December 31, 2006.In assessing the realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent on the availability of future taxable
income during the periods in which those assets will be reversed. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment. The valuation allowance is established for deferred tax
assets that cannot be objectively supported as more likely than not to be realized by the Company.Based on historical level of taxable income, management believes that it is more likely than not
that the Company will generate sufficient future taxable income from the wafer fabrication
activities subsequent to the pioneer status period to realize the benefits of these deductible
differences.9
    
    Ordinary Share CapitalIn October 2005, the Company reorganized its paid-up share capital by the extinguishment of
accumulated losses of $108,349 against paid-up share capital and the return of a portion to its
shareholders in the form of cash amounting to $60,000 in a return of capital sanctioned by the High
Court of Singapore (unaudited). During the year ended December 31, 2005, the Company paid cash of
$51,500 (unaudited) to its shareholders and the balance of $8,500 was paid in January 2006. The
return of capital through the extinguishment of accumulated losses does not qualify as a
quasi-reorganization under US GAAP and accordingly no adjustments for this reorganization to the
carrying values of the assets and liabilities of the Company and its accumulated losses have been
reflected in these financial statements.In October 2006, the board of directors of the Company approved a second return of capital which
was subsequently approved by the High Court of Singapore and filed with the Accounting and
Corporate Regulatory Authority of Singapore in November. This second return of capital will be
effected by paying cash of $40,000 to the shareholders. During the year ended December, 2006, the
Company paid cash of $25,000 to its shareholders.The equity has been reduced for the full return of capital upon board of directors approval and the
unpaid portion has been recognised as liabilities as at December 31, 2005 and 2006.
 FS18
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 10
    
    Accumulated DeficitSingapore law allows dividends to be paid only out of net profits for the year or retained
earnings. Shareholders of ordinary shares are not liable for Singapore income tax on dividends
paid by the Company out of its tax exempt profits from pioneer activities. As the Company is under
the one-tier corporate tax system, tax payable by the Company on its non-pioneer chargeable income
constitutes a final tax, and dividends are exempt from tax in the hands of its shareholders.11
    
    Accumulated Other Comprehensive LossAccumulated other comprehensive loss consists of the following:
 December 312005
    
    
    2006(Unaudited)Net unrealized cash flow hedging losses
    
    $
    (18
    )
    
    $
    (1
    )
 The net unrealized cash flow hedging losses are not adjusted for income taxes because such losses
are capital in nature.12
    
    Commitments and ContingenciesThe Company has the following capital commitments:
 December 312005
    
    
    2006(Unaudited)Contracts for capital expenditure
    
    $
    2,036
    
    
    $
    157
 Operating lease commitmentsThe Company leases its fab from its minority shareholder under a lease agreement which expires in
2008. Minimum future lease payments on non-cancellable operating leases from the minority
shareholder and other operating leases as of December 31, 2006 are as follows:
 Payable in the year ending December 31,2007
    
    $
    16,7102008
    
    
    3,8282009
    
    
    5$
    20,543
 FS19
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 ContingenciesThe Company may from time to time be a party to claims that arise in the normal course of business.
These claims include allegations of infringement of intellectual property rights of others as well
as other claims of liability. The Company accrues costs associated with these matters when they
become probable and reasonably estimable. The Company does not have
any outstanding litigation or claim as at December 31, 2006.The Company submits tax returns and claims with government tax authorities which are subject to
agreement and audit by those tax authorities. Actual taxes to be paid could vary due to the
outcome of audits by the tax authorities. The Company records tax contingencies as tax payable for
certain positions which may be challenged by the tax authorities and which the Company may not
ultimately prevail in defending. As of December 31, 2005 and 2006, the income tax contingencies
recorded as tax payable amounted to $60 (unaudited) and $62 respectively and relate to deduction
claims which may not be allowable. The amounts recorded are determined based upon the Companys
best estimate of possible assessments by the tax authorities and are adjusted, from time to time,
based upon changing facts and circumstances.13
    
    Derivative InstrumentsTo protect against volatility of future cash flows caused by changes in exchange rates, the
Company may use forward exchange contracts, currency options and currency swap instruments for
forecasted transactions such as operating expenses and capital purchases. To manage interest rate
risk, the Company may utilize interest rate derivative instruments to modify the interest
characteristics of its outstanding debts.Most of the Companys derivatives are formally designated as foreign currency cash
flow and fair value hedges except for certain foreign currency forward contracts. These certain
foreign currency forward contracts relate to groups of forecasted foreign currency denominated
payments. While the Company expects these derivatives to be effective in hedging the variability
in cash flows resulting from changes in foreign exchange rates, it does not believe it is
practicable to formally document the hedging relationship and link the derivatives to specific
forecasted transactions. Consequently, gains and losses on these instruments are included in the
statements of income in the line item foreign exchange gain (loss).The Company uses derivative instruments to manage identified foreign currency risks resulting
from foreign currency denominated debt and its foreign currency denominated purchase commitments
which are denominated principally in Japanese Yen and Euro. The maximum tenure for these
transactions is 18 months. The Company uses foreign currency forward contracts to manage these
risks and designates them as foreign currency cash-flow hedges. The Company uses foreign currency
forward contracts, which match the terms of the individual foreign currency exposures, and as a
result, any ineffectiveness of the Companys hedges is negligible. Amounts included in other
comprehensive income (loss) related to hedges of foreign currency purchase commitments are
reclassified into earnings (foreign exchange gain (loss)) when depreciation commences for the asset
related to the purchase commitment.The estimated net amount of existing losses from cash flow hedges expected to be reclassified
into earnings within the next year is $1. Net realized losses recognized from cash flow hedges was
$37 (unaudited) and $17 for the years ended December 31, 2005 and 2006, respectively.
 FS20
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 The components of other comprehensive loss related to derivative and hedging activities
consist of the following:
 December 31,2005
    
    
    December 31,2006(Unaudited)Beginning
    
    $
    (55
    )
    
    $
    (18
    )Reclassification of cash flow hedging losses into earnings
    
    
    37
    
    
    
    17Ending
    
    $
    (18
    )
    
    $
    (1
    )
 The Company is exposed to credit risk and market risk by using derivative instruments to hedge
exposures of changes in foreign currency rates. Credit risk is the failure of the counterparty to
perform under the terms of the derivative contract. When the fair value of a derivative contract
is positive, the counterparty owes the Company, which creates credit risk for the Company. When
the fair value of a derivative contract is negative, the Company owes the counterparty and,
therefore, it does not possess credit risk. The Company anticipates, however, that counterparties
will be able to fully satisfy their obligations under the contracts. The Company does not obtain
collateral or other security to support financial instruments subject to credit risk but monitors
the credit standing of counterparties.Market risk is the adverse effect on the value of a financial instrument that results from a change
in interest rates or currency exchange rates. The Company assesses currency exchange cash flow
risk by identifying and monitoring changes in interest rate or currency exchange rate exposures
that may adversely impact expected future cash flows and by evaluating hedging opportunities.14
    
    Fair Values of Financial Instruments
 December 31,2005
    
    2006(Unaudited)Carrying
    
    Estimated
    
    Carrying
    
    Estimatedamount
    
    fair value
    
    amount
    
    fair valueEmbedded foreign currency derivatives in purchase contracts
    
    $
    
    
    
    $
    
    
    
    $
    11
    
    
    $
    11
 Cash and cash equivalents, amounts owing from and to immediate holding company, other related
companies and affiliated companies, accounts receivable and accounts payable.The carrying amounts
approximate fair value in view of the short-term nature of these balances.Forward foreign exchange contracts.The fair value is estimated by reference to market quotations
for forward contracts with similar terms, adjusted where necessary for maturity differences.Embedded foreign currency derivatives in purchase contracts.The fair value is estimated by
reference to movements in exchange rates between contract date and balance sheet date.
 FS21
    Table of Contents  SILICON MANUFACTURING PARTNERS PTE LTD
NOTES TO THE FINANCIAL STATEMENTS  in US Dollars
In thousands (except per share data)
 Limitations.Fair value estimates are made at a specific point in time, and are based
on relevant market information and information about the financial instruments. These
estimates are subjective in nature and involve uncertainties and matters of significant
judgment and therefore cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.15
    
    Subsequent EventsSubsequent to the year end, the immediate holding company, Agere Systems (Singapore) Pte Ltd
changed its name to LSI Technology (Singapore) Pte Ltd.Subsequent to the Companys original issuance of its
financial statements for the three months period ended
December 31, 2006, in March and May 2007, the Singapore tax authorities completed the examination
of the Companys prior years income tax returns and
allowed the deduction claims as mentioned in Note 12. As a
result, the Company received total tax refund of $1,660 pertaining
to tax contingencies which had already been paid to the tax
authorities prior to December 31, 2005. Accordingly,
the Company has in 2007 reversed the income tax contingencies recorded as tax payable.
 FS22