Document:

<PAGE>

                                                                   EXHIBIT 10.13
Intel/ChipPAC Confidential

                     CHIPPAC LIMITED and INTEL CORPORATION

                              MATERIALS AGREEMENT

This Agreement (the "Agreement") is entered into as of July 1, 1999 (the
"Effective Date) by and between ChipPAC Limited, a British Virgin Islands
company, having a place of business at Craigmuir Chambers, Road Town, Tortola,
British Virgin Islands and its subsidiaries (hereinafter "Company"), and Intel
Corporation, a Delaware corporation, having its principal place of business at
2200 Mission College Blvd., Santa Clara CA 95052 and its subsidiaries
(hereinafter "Intel"). Company and Intel are sometimes referred to as a "Party"
and collectively referred to as the "Parties".

RECITALS

WHEREAS, Intel has agreed to purchase, and ChipPAC, Inc., the parent company of
the Company, has agreed to sell, certain ChipPAC, Inc. securities (the
"Investment") subject to the terms and conditions set forth in that certain
Stock Purchase Agreement dated as of July __, 1999 (the "Stock Purchase
Agreement"); and

     WHEREAS, the Parties have previously entered into an Assembly Services
Agreement/Corporate Purchase Agreement No. 0995ELR001, dated 199_, between
Hyundai Electronics America, Hyundai Electronics Industries Co., Ltd. and
ChipPAC, Inc. and the Parties are in the process of novation of such agreement
and replacement with a comparable agreement between ChipPAC Limited and Intel
(the "CPA"), and this Agreement is intended to be an addendum to the CPA and to
amend, modify and supplement such CPA;

     NOW, THEREFORE, for good and valuable consideration, including the
investment by Intel pursuant to the Stock Purchase Agreement, the receipt and
sufficiency of which is acknowledged, the Parties agree as follows:

AGREEMENT

     1. CONSTRUCTION AND DEFINITIONS

1.1        Construction. All references in this Agreement to "Sections" refer to
           ------------                                       --------
the sections of this Agreement. As used in this Agreement, neutral pronouns and
any variations thereof shall be deemed to include the feminine and masculine and
all terms used in the singular shall be deemed to include the plural, and vice
versa, as the context may require. The words "hereof," "herein" and "hereunder"
                                              ------    ------       ---------
and other words of similar import refer to this Agreement as a whole, as the
same may from time to time be amended or supplemented, and not to any
subdivision contained in this Agreement. The word "including" when used herein
                                                   ---------
is not intended to be exclusive and means "including, without limitation." This
                                           -----------------------------
Agreement shall be construed without regard to any presumption or other rule
requiring construction hereof against the Party causing this Agreement to be
drafted.

1.2        Definitions. As used in this Agreement, the following capitalized
           -----------
terms have the meanings provided below:

(a)        Upside Capacity means the right as set forth in this Agreement to
direct a portion of the Capacity for purchase by Intel.

(b)        Capacity means that Company will establish and maintain manufacturing
facilities capable of producing Products in sufficient quantity to meet the
current and forecasted acquisition needs of Intel. Any forecasts of future
requirements which may be provided by Intel to Company are estimates only and
shall be non-binding upon Intel.
<PAGE>

(c)        Intellectual Property Rights shall mean any or all of the following
and all rights in, arising out of, or associated therewith: (i) all United
States and foreign patents and utility models and applications therefor and all
reissues, divisions, renewals, reexaminations, extensions, provisionals,
continuations and continuations-in-part thereof, and equivalent or similar
rights anywhere in the world in inventions and discoveries ("Patents"); (ii) all
trade secrets, know how and proprietary information; (iii) all copyrights,
copyrights registrations and applications therefor and all other rights
corresponding thereto throughout the world ("Copyrights"); (iv) all mask works,
mask work registrations and applications therefor, and any equivalent or similar
rights in semiconductor masks, layouts, architectures or topology ("Maskworks");
(v) all industrial designs and any registrations and applications therefor
throughout the world; (vi) all trade names, logos, trade dress, domain names,
common law trademarks and service marks, trademark and service mark
registrations and applications therefor and all goodwill associated therewith
throughout the world ("Trademarks"); and (vii) any similar, corresponding or
equivalent rights to any of the foregoing anywhere in the world, including but
not limited to Computer Program Rights and Registrations and applications
therefor.

(d)        Product(s) means those products or services described in the CPA or
any related Purchase Order Release issued under the CPA by Intel to Company,
including any referenced drawing or specification for such product or service.

(e)        Technology shall mean any or all of the following (i) works of
authorship including, without limitation, computer programs, source code and
executable code, whether embodied in software, firmware or otherwise,
documentation, designs, flow charts, specifications, logic diagrams, programmer
notes, protocols, files, records, data and mask works, (ii) inventions (whether
or not patentable), improvements, and technology, (iii) proprietary and
confidential information, including technical data and customer and supplier
lists, trade secrets and know how, (iv) databases, data compilations and
collections and technical data, (v) tools, methods and processes, and all
instantiations of the foregoing in any form and embodied in any media.

(f)        Term shall have the meaning set forth in Section 11.2.

     2.  PRODUCT PRICING

     2.1   Price Negotiation. The Parties agree to enter into periodic price
           -----------------
negotiations with the intent of achieving the most competitive pricing of the
Products supplied by Company to Intel, [redacted*].

     2.2   [redacted*]

*    Confidential treatment requested.
                                                                             -2-
<PAGE>

     2.3    [redacted*]

     2.4    [redacted*]

3.     PRODUCTION CAPACITY

     3.1    [redacted*]

     3.2    [redacted*]

     3.3    Priority Product Re-Qualification.  In the event Company changes its
            ---------------------------------
components or component vendors based upon cost considerations and such change
necessitates re-qualification of Products, Intel agrees to prioritize the re-
qualification process of such Products, unless the Parties agree that there is
insufficient payback for such re-qualification effort.

4.     TECHNOLOGY TRANSFERS

*    Confidential treatment requested.

                                                                           -3-
<PAGE>

     4.1    [redacted*]

     (a) Copyright License. A non-exclusive, world-wide, irrevocable, non-
         -----------------
     transferable, fully paid up, royalty free, perpetual license (without the
     right to transfer or sublicense except as set forth in "c" below) to
     reproduce and, prepare derivative works of, publicly perform, publicly
     display and distribute the Technology and derivative works thereof to third
     parties through incorporation in an Intel product manufactured using, or
     derived from the Technology;

     (b) Other Intellectual Property Licenses. A non-exclusive, world-wide,
         ------------------------------------
     irrevocable, nontransferable, fully paid up, royalty free, perpetual
     license (without the right to transfer or sublicense except as set forth in
     "c" below) under all Intellectual Property Rights now or later owned or
     controlled by Company to make, use, sell, distribute, offer for sale, and
     import the Technology and derivative works thereof pursuant to Intel's
     exercise of the rights granted to it in the copyright licenses under
     Section 4(a) of this Agreement;

     (c) [redacted*]

     4.2   [redacted*]

5.   ROADMAP REVIEWS

The parties shall conduct quarterly roadmap reviews to evaluate Company
technology roadmaps against the requirements of Intel business groups. Session
will also be used to address cost reduction opportunities or programs, and
qualification of any new Company sites, including Shanghai. Synergy activities
toward mutually used technologies will also be addressed in this forum.

6.   [redacted*]

*Confidential treatment requested.

                                                                             -4-
<PAGE>

 7.    AUDIT

 7.1   Audit Rights of Intel. For purposes of this Agreement only, and not
       ---------------------
 in derogation of any other audit provision which may exist between the Parties,
 during the Term, Company will maintain complete and accurate records required
 by its performance under this Agreement, including Product pricing. Upon thirty
 (30) days written notice and not more often than twice per calendar year, Intel
 may audit Company's books and records to ensure Company's compliance with the
 terms and conditions of this Agreement. At Intel's option or upon Company's
 written demand, such audit will be performed by an independent third party at
 Intel's expense; provided, however, if any audit reveals that Company is not
 materially complying with the terms of this Agreement, Company shall pay the
 costs of such audit. The auditor shall keep the results of such audit
 confidential, and, if conducted by a third party, any failure by Company to
 abide by the obligations of this Agreement shall be reported to Intel. At the
 end of the Term, Intel shall have the option of conducting a final end-of-term
 audit; if Intel does not avail itself of this option within thirty (30) days of
 the end of the Term, such option shall expire.

     7.2    Certification of Intel Provided Information. Intel shall provide
            -------------------------------------------
 Company's independent third party auditors such information as will reasonably
 substantiate the [redacted*] required by Section 3.2. Such information shall be
 retained as confidential and such auditors may inform Company of its
 professional opinion regarding Intel's compliance or non-compliance with the
 provisions of Section 3.2. No other use of the information may be made by such
 auditors. Additionally, Intel agrees that, prior to submission of a request for
 quotation by Intel, the Intel Finance Department will certify the accuracy of
 representations regarding Product pricing quotations from competitors which are
 made by Intel pursuant to Section 2.3.

 8.    OWNERSHIP

 8.1   Company Technology. Company shall own all right, title and interest in
       ------------------
 and to any Technology it solely develops in the course of performance of this
 Agreement not using Confidential Information of Intel (other than residuals) or
 develops independent of this Agreement, including all Intellectual Property
 Rights therein.

 8.2   Intel Technology. Intel shall own all right, title and interest in
       ----------------
 and to any Technology that it solely develops in the course of performance of
 this Agreement not using Confidential Information of Company (other than
 residuals) or develops independent of this Agreement, including all
 Intellectual Property Rights therein.

 9.    CONFIDENTIALITY

 9.1   Confidentiality Information. Confidential Information is any information
       ---------------------------
disclosed by one Party to the other in connection with this Agreement, which the
disclosing Party believes to include confidential information, is designated
with an appropriate legend such as "CONFIDENTIAL" (or other label indicating its
confidential nature or status) at the time of disclosure if in documentary or
other tangible form, and if such disclosure is initially oral or visual and not
reduced to written or documentary form at the time of disclosure, is identified
as confidential at the time of disclosure, summarized or identified in a written
document that is marked with an appropriate legend indicating its confidential
status, and provided to the other Party within twenty (20) days following such
oral or visual disclosure. For each item of Confidential Information, the Party
disclosing the item shall be called the "Disclosing Party," and the Party
receiving the item shall be called the "Receiving Party."

     9.2    Confidentiality Obligation. The Receiving Party shall hold all
            --------------------------
 Confidential Information of the Disclosing Party in trust and confidence, and
 protect it as the Receiving Party would protect its own confidential
 information (which, in any event, shall not be less than reasonable protection)
 and shall not use such Confidential Information for any purpose other than that
 contemplated by this Agreement. Unless agreed by the Disclosing Party in
 writing, the Receiving Party shall not disclose any Confidential Information of
 the Disclosing Party, by publication or otherwise, to any person other than
 employees, officers or directors who (i) are bound to written confidentiality
 obligations consistent with and at least as restrictive as those set forth
 herein and (ii) have a need to know such Confidential Information for purposes
 of enabling a Party to exercise its rights and perform

*Confidential treatment requested.

                                                                             -5-
<PAGE>

its obligations pursuant to this Agreement Confidential Information shall remain
confidential information until such time as it qualifies for non-confidential
treatment pursuant to any exception in Section 9.3. Exceptions

9.3         Exception. The obligations specified in Section 9.2 shall not
            ---------
apply to any Confidential Information to the extent that the Receiving Party can
demonstrate that such Confidential Information: (a) it is already known to the
Receiving Party without restriction prior to the time of disclosure by the
Disclosing Party; (b) it is acquired by the Receiving Party from a third party
without confidentiality restriction and does not originate with the Disclosing
Party; (c) it is independently developed or acquired by the Receiving Party by
employees or contractors without access to such Confidential Information; (d) it
is approved for release by written authorization of the Disclosing Party; (e) it
is in the public domain at the time it is disclosed or subsequently falls within
the public domain through no wrongful action of the Receiving Party; or (f) it
is furnished to a third party by the Disclosing Party without a similar
restriction on that third party's right of disclosure. In addition, the
obligations specified in Section 9.2 shall not prohibit Company from disclosing
the general existence of this Agreement (i.e. describing that Company has a TAM
agreement with Intel) and a general description of its primary provisions to a
potential investor in a private placement memorandum or prospectus seeking debt
or equity financing or if required by applicable statute. Such disclosure, in
any event, is subject to and conditional upon Intel's right, in its reasonable
discretion, to review and edit the private placement memorandum or prospectus or
statutorily required disclosure, including deletions of text, prior to any such
disclosure.

     9.4    Compelled Disclosure. Notwithstanding the foregoing, a Receiving
            --------------------
Party may disclose Confidential Information if it is disclosed pursuant to the
requirement of a governmental agency or disclosure is permitted or required by
operation of law, provided that the Receiving Party use its best efforts to
notify the Disclosing Party in advance of such disclosure and seeks confidential
treatment for such Confidential Information.

9.5         Residual Information. The restrictions regarding Confidential
            --------------------
Information shall not apply to one Party's use of the Residuals from the other
Party's Confidenfial Information. The term "Residuals" as used in this paragraph
                                            ---------
shall mean the Confidential Information in intangible form (i.e., not in written
or other documentary form, including tape or diskette) which may be retained by
those employees of Company or Intel who have had access to the other's
Confidential Information, including ideas, concepts, know-how, or techniques
contained therein. Neither Party shall have any obligation to limit or restrict
the assignment of such employees or to pay royalties for any work resulting from
the use of such Residuals.

10.         WARRANTIES AND DISCLAIMERS

10.1        General Warranty. Each Party hereby represents and warrants to the
            ----------------
other that: (i) all corporate action on the part of such Party, its officers,
directors and shareholders necessary for the authorization of this Agreement and
the performance of all obligations of such Party hereunder has been taken; and
(ii) this Agreement, when executed and delivered, will be a valid and binding
obligation of such Party enforceable in accordance with its terms.

10.2        No Conflict. Each Party hereby represents and warrants to the other
            -----------
that such Party's making of this Agreement and performance hereunder does not
and will not violate any agreement existing between such Party and any third
party.

11.         EFFECTIVE DATE, TERM, TERMINATION AND CANCELLATION.

11.1        Effective Date. Notwithstanding the Effective Date of July 1, 1999,
            --------------
this Agreement shall not become effective unless and until Company has 1)
executed the Stock Purchase Agreement and ancillary agreements, and 2) Company
has consummated the transactions contemplated in the Stock Purchase Agreement
and ancillary agreements. Upon the occurrence of these conditions, this
Agreement shall be in full force and effect retroactive to the Effective Date.

                                                                             -6-
<PAGE>

11.2        Agreement Term. This Agreement shall commence on the Effective Date
            --------------
and shall terminate [redacted*] thereafter (the "Term"), unless earlier
terminated as provided below or extended by mutual agreement of the Parties. The
Term of the CPA is hereby extended to be coterminous with this Agreement.

11.3        Termination by Either Party. Either Party shall have the right to
            ---------------------------
terminate this Agreement under the following conditions: (a) mutual agreement
between the Parties; and (b) upon sixty (60) days notice for any material breach
of this Agreement by the other Party which breach is not cured within such sixty
(60) day period.

11.4        Termination of CPA. In the event the CPA is terminated pursuant to
            ------------------
its terms, this Agreement shall likewise terminate concurrent with the CPA
termination date.

11.5        Survival. Each Party's obligations to pay any amount due and owing
            --------
and to deliver and accept any Product(s) ordered prior to the CPA and Sections
1, 4, 7, 8, 9 and 12.3 of this Agreement shall survive the expiration or
termination of this Agreement.

12.         MISCELLANEOUS

12.1        Merger, Modification, Waiver. Except for the other applicable
            ----------------------------
documents mentioned below and the CPA, this Agreement contains the entire
understanding between Intel and Company with respect to the subject matter
hereof, and merges, and supersedes all prior and contemporaneous agreements,
dealings and negotiations. No modification, alteration or amendment shall be
effective unless made in writing, dated and signed by duly authorized
representatives of both parties. No waiver of any breach hereof shall be held to
be a waiver of any other or subsequent breach.

12.2        Other Applicable Documents. This Agreement shall incorporate by
            --------------------------
reference the following additional terms: Attachment A, [redacted*] and any
amendments or additions thereto.

     12.3   [redacted*]

     12.4   Jurisdiction and Choice of Law Any claim arising under or relating
            ------------------------------
to this Agreement shall be governed by the internal substantive laws of the
State of Delaware or federal courts located in Delaware, without regard to
principles of conflict of laws. Each party hereby agrees to jurisdiction and
venue in the courts of the State of Delaware for all disputes and litigation
arising under or relating to this Agreement. Company represents that it is
undergoing a corporate recapitalization with the ultimate goal of it being the
parent of both its Korean and Chinese subsidiaries. Company agrees to submit
itself and its subsidiaries to the jurisdiction of the State or Federal Courts
of Delaware pursuant to this Section 12.4, including receipt of service of
process.

12.5        Relationship of the Parties. This Agreement is not intended to be,
            ---------------------------
nor shall it be construed as, a joint venture, association, partnership,
franchise or other form of business relationship. Neither Party shall have nor
hold itself out as having any right or power or authority to assume, create, or
incur any expense, liability or obligation, expressed or implied, on behalf of
the other Party, except as expressly provided herein. Except as expressly
agreed, each Party shall bear its own costs and expenses incurred under or in
conjunction with its performance of its obligation contained in this Agreement.

12.6        Existing Agreement and Relationship to this Agreement. All terms and
            -----------------------------------------------------
conditions set forth in the CPA shall remain in effect and control the purchase
of Company's Products except in the event of a direct

*Confidential treatment requested.

                                                                             -7-
<PAGE>

conflict or inconsistency. This Agreement is intended to supplement the CPA. In
the event of any direct conflict or inconsistency between the CPA and this
Agreement, the terms and conditions of this Agreement shall control. Upon any
change of control, this Agreement will survive and the new owners would be
required to honor all obligations set forth therein.

12.7        Assignment. Except for assignment to a wholly owned subsidiary, for
            ----------
a period five (5) years from the Effective Date, the obligations of the Company
under this Agreement may not be assigned, whether by operation of law or
otherwise, without the prior written consent of the Intel, which consent may not
be unreasonably withheld. Intel reserves the right to withhold such consent if
in its good faith reasonable judgement, such proposed assignee is not capable of
meeting Company's obligations under the Agreement. Subject to the foregoing,
this Agreement shall inure to and benefit and bind the successors and permitted
assigns of the Parties.

12.8        Notices. All notices, demands or consents required or permitted
            -------
hereunder shall be in writing and shall be delivered, sent by facsimile (with
confirmation copy by mail) or telex, or mailed to the respective Parties at the
addresses first set forth in the first paragraph of this Agreement or at such
other address as shall have been given to the other Party in writing for the
purposes of this clause. Such notices and other communications shall be deemed
effective upon the earliest to occur of (i) actual delivery, (ii) five (5) days
after mailing, addressed and postage prepaid, returned receipt requested, as
aforesaid, or (iii) one (1) business day after transmission by telex, telegram
or facsimile where receipt has been confirmed by the same type of transmission
or in writing received by the sender.

12.9        Severability. The provisions of this Agreement are severable and if
            ------------
any one or more such provisions shall be determined to be invalid, illegal or
unenforceable, in whole or in part, the validity, legality and enforceability of
any of the remaining provisions or portions thereof shall not in any way be
affected or impaired thereby and shall nonetheless be binding between the
Parties hereto.

12.10       Titles and Headings. Titles and headings to Sections herein are
            -------------------
inserted for convenience of reference only and are not intended to affect the
meaning or interpretation of this Agreement.

12.11       Counterparts. This Agreement may be executed in multiple
            ------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

  IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
duly authorized officers or representatives to be effective as of the date first
above written.

Intel Corporation                           ChipPAC Limited

By: /s/ Craig C. Brown                      By: /s/ Richard Parsons
   ---------------------------                 ---------------------------------
Name: Craig C. Brown                        Name: Richard Parsons
     -------------------------                   -------------------------------
Title: Director, Assembly/Test               Title: DIRECTOR
       Materials Group                             -----------------------------
      ------------------------

                                                                             -8-
<PAGE>

                                  Appendix A

[redacted*]
*Confidential Treatment requested.

                                                                             -9-<PAGE>

                                                                   EXHIBIT 10.14

                                                              INTEL CONFIDENTIAL
                                                              ------------------

                             INTEL/CHIPPAC LIMITED
                          ASSEMBLY SERVICES AGREEMENT

           (Replacement Agreement for Intel Agreement No. 0995ELR001)

This Agreement ("Agreement") is entered into this 5th day of August, 1999 and
shall become effective upon the Effective Date, by and between Intel Corporation
("Intel"), a Delaware corporation with its principal offices located at 2200
Mission College Boulevard, Santa Clara, California 95052, and ChipPAC Limited, a
British Virgin Islands corporation with principal offices located at Craigmuir
Chambers, Road Town, Tortola, British Virgin Islands ("ChipPAC").  Intel and
ChipPAC are sometimes collectively referred to as the "Parties" or singularly as
a "Party". "Effective Date" means the date of consummation of the transactions
contemplated by that certain Agreement and Plan of Recapitalization and Merger
dated as of March 13, 1999, as amended, by and among Hyundai Electronics
Industries Company, Ltd., Hyundai Electronics America, ChipPAC, Inc. and ChipPAC
Merger Corp.

RECITALS:
--------

WHEREAS, Intel desires to enter into a contract assembly and test arrangement
with ChipPAC as more specifically described herein.

WHEREAS, ChipPAC is in the business of doing contract assembly and test work for
integrated circuit manufacturers and desires to perform such services for Intel.

WHEREAS, the Parties desire to set forth below the conditions and covenants
under which such work shall be performed.

NOW THEREFORE, in consideration of the mutual covenants herein contained, the
Parties agree as follows:

1.   DEFINITIONS
     -----------

     1.1  "[redacted*]" shall mean Intel's chipset products utilizing the
          [redacted*] packaging process.

     1.2  "[redacted*]" shall mean Intel's chipset products utilizing the
           [redacted*] packaging process.

     1.3  "[redacted*]" shall mean the chipset products utilizing the
          [redacted] packaging process.

*Confidential treatment requested.

                                      -1-
<PAGE>

     1.4  "Die Product" shall mean an Intel Product in an unassembled form,
          without packaging, specified in Exhibit D, and provided by Intel to
                                          ---------
          ChipPAC under this Agreement in order for ChipPAC to perform the
          Services.

     1.5  "Die Product Specification" shall mean the technical information for
          each Intel Product which ChipPAC is authorized to handle under this
          Agreement.

     1.6  "Facility" shall mean the Intel work area in the factory provided by
          ChipPAC to perform the Services as defined below.

     1.7  "Intel Product" shall mean the finished product which is sold by Intel
          in a packaged form and which contains the die of the related Die
          Product, and which ChipPAC processes or manufactures on behalf of
          Intel which complies with the Specifications/ Performance Standards
          specified in Exhibit B.
                       ---------

     1.8  "Intel Product Data Sheet" shall mean the technical information for
          each Intel Product supplied by Intel to purchasers of Intel Products.

     1.9  "Leadframes" shall mean the leadframes that ChipPAC shall order as
          Piece Parts in anticipation of fulfilling Intel's orders for
          [redacted*] and [redacted*].

     1.10 "Leadtime" shall mean TPT plus transit time to Intel.

     1.11 "Leadtime Procurement Period" shall mean the procurement of Piece
          Parts during the Leadtime period.

     1.12 "LIPAS" (Line Item Performance Against Schedule) shall mean the number
          of Line Items that shipped in a given week divided by the number of
          Line Items scheduled by ChipPAC to be shipped during the same week per
          Intel's forecast.

     1.13 "Non Data Sheet Functionality" shall mean (a) features, instructions,
          operating modes, and other functions which may be contained in the
          Intel Product and the Die Product but which Intel does not document
          and which are not required for the Intel Product and the Die Product
          to comply with the related Intel Product Data Sheet, and (b) internal
          nodes and signals which are not accessible at the bond pads of the Die
          Product.

*Confidential treatment requested.

                                      -2-
<PAGE>

     1.14 "Piece Parts" shall mean all materials procured and furnished by
          ChipPAC in order to perform the Services under this Agreement.

     1.15 "Rejects" shall mean the product produced by ChipPAC which do not
          comply with the Specifications and Performance Standards specified in
          Exhibit B, are damaged or are otherwise returned to ChipPAC or
          ---------
          rejected by Intel.

     1.16 "Release" shall mean Intel's purchase order or change order accepting
          ChipPAC's offer to ship a definite quantity of Intel Products or to
          provide Services to a specified schedule and pricing.

     1.17 "Service(s)" shall mean the work to be performed as specified in
          Exhibit A in compliance with the Specifications/Performance Standards
          ---------
          specified in Exhibit B.
                       ---------

     1.18 "Substrates" shall mean the substrate materials that ChipPAC shall
          order as Piece Parts in anticipation of fulfilling Intel's orders for
          [redacted*] Products.

     1.19 "Through Put Time" (TPT) shall mean the number of calendar days
          required to manufacture the Intel Product, starting when the Wafers or
          Die Product are released from inventory at ChipPAC and ending when the
          Intel Products are shipped out of ChipPAC.

     1.20 "Wafer" shall mean Intel's substrate material that contains unscribed
          Die Product that have been sorted by Intel as Die Product which has
          passed the sort criteria for the Intel Product ("non-inked") and Die
          Product which has failed the sort criteria for the Intel Product
          ("inked").

     1.21 "Work in Process" referred to hereinafter as "WIP".

2.   STATEMENT OF WORK
     -----------------

     2.1  ChipPAC will provide all facilities, equipment, material, manpower and
          expertise necessary to perform the Services according to Intel
          requirements and specifications as referenced in Exhibits A and B.
                                                           ----------------

     2.2  Intel shall supply ChipPAC with all Wafers and Die Product.

     2.3  ChipPAC shall provide at ChipPAC's expense all Piece Parts, supplies
          and peripheral products, including leadframes, required for ChipPAC to
          perform the Services.

*Confidential treatment requested.

                                      -3-
<PAGE>

     2.4  ChipPAC shall perform the Services in accordance with Intel's
          requirements and specifications as specified in Exhibits A and B.
                                                          ----------------

     2.5  ChipPAC shall at least meet the minimum yields and maximum TPT
          specified in Exhibit C, with a goal of continually improving both
                       ---------
          yield and TPT.

     2.6  ChipPAC shall adhere to Intel's procedures with respect to security,
          traceability and accountability as specified herein.

3.   PRE-PRODUCTION
     --------------

     3.1  In the event that Intel determines a need to have certain Intel
          Products produced by ChipPAC on a limited scale or as prototypes in
          order to qualify those Intel Products or the process involved or to
          produce samples of the Intel Products ("Pre-Production Parts"), prior
          to beginning full production, Intel and ChipPAC shall agree on the
          quantity, specifications, pricing, Leadtime and other requirements for
          each such Pre-Production Part.  All orders for Pre-Production Parts
          must first be authorized in writing by Intel.  Once Intel has
          qualified and accepted the Pre-Production Parts, these may be ordered
          as Intel Products under the Agreement.

     3.2  [redacted*]

     3.3  Intel recognizes that yields for Pre-Production Parts may be difficult
          to control. If ChipPAC's build amount does not provide sufficient
          quantities to provide the quantity ordered by Intel, and the
          outstanding amount is less than [redacted*] of the ordered quantity,
          Intel may either cancel the balance of the order without penalty, or
          allow ChipPAC to provide the balance of the order at a later date, not
          to exceed [redacted*] from the date Intel provides replacement Die
          Product.

     3.4  ChipPAC warrants that Pre-Production Parts shall meet design test
          vectors and be free of manufacturing defects, but otherwise are
          provided "AS IS".

4.   OWNERSHIP
     ---------

     4.1  All Wafers and Die Product shall be held by ChipPAC for the sole
          benefit of Intel. Ownership of Wafers and Die Product shall remain
          with Intel.  ChipPAC acknowledges that Intel retains an ownership
          interest in the Wafers and Die Product and agrees to assist Intel in
          perfecting said security interest under the Uniform
                                                      -------

*Confidential Treatment requested.

                                      -4-
<PAGE>

          Commercial Code and other relevant laws, at Intel's request. Ownership
          ---------------
          of all Rejects shall remain with Intel.

5.   CONFIDENTIALITY AND PUBLICITY
     -----------------------------

     5.1  Any confidential information to be exchanged between the Parties shall
          be governed by the terms of the Corporate Non-Disclosure Agreement
          (CNDA) number 0875665, which ChipPAC agrees to be bound by.  At a
          minimum, ChipPAC agrees to maintain such information in confidence,
          pursuant to the terms of the above-referenced CNDA, to take all
          reasonable precautions to prevent unauthorized disclosure and to use
          such information only within the scope of this Agreement until the
          information becomes publicly available through no fault of ChipPAC.
          Examples of confidential information include, but are not limited to,
          Wafers, Die Product, Die Product Specifications, yield, probe
          characteristics, number of Wafers, and number of Die Product.

     5.2  ChipPAC is responsible for (i) secure storage in a segregated
          Facility, handling, processing and return of Intel Product
          incorporating Die Product, and (ii) the return (or certified
          destruction) of all scrap/Rejects to Intel.  ChipPAC will be liable
          for any loss, including, but not limited to, theft, destruction, and
          deterioration.

     5.3  ChipPAC's Facility, manufacturing and wafer processing areas must be
          secure and accessed only by ChipPAC's employees or contractors on a
          need-to-know basis.  Any third party, including contract employees,
          involved in any aspect of Wafer or Die Product shipping, storage,
          security, processing, assembly, or handling must sign a Non-Disclosure
          Agreement with Intel.

     5.4  ChipPAC's employees who access Intel's premises may be required to
          sign a separate non-disclosure agreement prior to admittance to
          Intel's premises.

     5.5  ChipPAC warrants that no information disclosed by ChipPAC to Intel, in
          any form whatsoever, is the confidential information of any other
          party without written authorization from that Party.

     5.6  Neither Party may use the other Party's name in advertisements, news
          releases, publicity statements, on the internet, or otherwise disclose
          the existence or content of this Agreement, without the other's prior
          written consent.

6.   DELIVERY, RELEASES AND SCHEDULING
     ---------------------------------

                                      -5-
<PAGE>

     6.1  Intel shall provide ChipPAC with a rolling [redacted*] operating
          forecast of its requirements every week.  An Intel Work Week Calendar
          sample is attached as Exhibit G.
                                ---------

     6.2  Response:  ChipPAC shall provide a written response to Intel's
          [redacted*] requirements forecast letter within [redacted*] after
          receipt. If no response is received by Intel in this time period, then
          the forecast is deemed to be approved by ChipPAC.

     6.3  ChipPAC shall use the forecast only as a guide to adequately prepare
          for Intel's anticipated requirements.  Intel is not obligated to
          purchase any specific business under this Agreement.  Intel's
          forecasts are subject to change and are not commitments.  ChipPAC
          understands that Intel's demand is dependent on market and other
          factors beyond Intel's control and this may result in demand being
          reduced, increased or eliminated.

     6.4  ChipPAC shall meet the Intel unit requirements as set forth in the
          shipping Release for the applicable purchase order as acknowledged by
          ChipPAC as specified in paragraph 6.2 above.

     6.5  Intel shall place with ChipPAC a Release for each Intel Product by the
          minimum Leadtime required, specifying quantity, delivery date and
          delivery place.  ChipPAC agrees to acknowledge in writing each Release
          within [redacted*]. ChipPAC shall make weekly delivery
          commitments by Line Item for the weekly Intel requests and monthly
          delivery commitments by Line Item for the remaining months of the
          forecast period.  ChipPAC's delivery commitment shall be firm for the
          Leadtime Procurement Period.  Intel may make changes to its Releases
          at any time in the form of "Demand Exceptions".  Such Demand Exception
          changes shall be sent immediately to ChipPAC in writing by fax or
          other electronic means.  ChipPAC must provide to Intel a written
          response to Intel's Demand Exceptions via fax or e-mail within twenty-
          four (24) hours after receipt of the Demand Exception changes. At such
          time as Intel receives ChipPAC's committed response to the Demand
          Exceptions, Intel shall update the Release accordingly. [redacted*]

     6.6  ChipPAC agrees that all orders for Intel Products will ship on the
          exact date specified. In the event that an order shipment is going to
          be late, Intel must be notified as soon as ChipPAC is aware that the
          Intel Product will not meet its committed ship date. Partial shipments
          must be authorized by Intel and are counted as late shipments and will
          only be considered complete when all Intel Products for

     *Confidential treatment requested.

                                      -6-
<PAGE>

          that order have been received. If shipments are late by more than
          [redacted*], at no fault of Intel, at Intel's option, Intel can
          cancel the order with no charge. ChipPAC will be responsible for any
          costs incurred by Intel in obtaining cover in the event of such order
          cancellation. Intel shall have no obligation for orders shipped more
          than [redacted*] late.

     6.7  ChipPAC shall promptly notify Intel if ChipPAC is unable to perform
          Services or deliver orders as scheduled and shall state the reasons
          for such non-delivery or non  performance.  Such notification by
          ChipPAC shall not affect Intel's termination rights.

     6.8  Delivery Performance.  ChipPAC's LIPAS performance shall be 100%.  If
          --------------------
          ChipPAC's LIPAS performance falls below 100% for any reason, at no
          fault of Intel, then ChipPAC shall promptly implement a corrective
          action plan approved by Intel to bring LIPAS back into 100%
          compliance.  [redacted*]

     6.9  Intel may place any portion of a Release on hold by notice which shall
          take effect immediately upon receipt.  Releases placed on hold will be
          rescheduled or canceled within a reasonable time (to be mutually
          agreed upon by Intel and ChipPAC).

     6.10 [redacted*]

     6.11 Intel-requested or Intel-approved changes that result in ship date
          changes will be reflected on a written change order to the Release
          showing the revised ship and delivery dates.

     6.12 ChipPAC shall maintain a safety stock of Piece Parts including
          Leadframes and Substrates in sufficient quantity to maintain
          production in accordance with the then-current Intel forecasts of
          [redacted*] ("Safety Stock Level"), in addition to the quantity
          specified on the then current Release, unless otherwise requested by
          Intel in writing. [redacted*]

     *Confidential treatment requested.

                                      -7-
<PAGE>

          [redacted*]. All other Piece Part liability is covered by paragraph
          6.13 below.

     6.13 Cancellation.  If Intel cancels all or part of any order for Intel
          ------------
          Products, Intel shall pay for the related WIP for the canceled order,
          as outlined in Exhibit E, Cancellation Liability.
                         ---------

     6.14 Rescheduling.  Intel may at any time, not later than [redacted*]
          ------------
          before the scheduled delivery date, reschedule any Release line item
          from such scheduled delivery date to another date.  Intel will be
          liable only for the Piece Parts ordered relating to the specific
          Release line item as outlined in Exhibit E, Cancellation Liability.
                                           ---------
          Intel may also place all or any part of an order on hold, which shall
          take place immediately upon receipt of notice by ChipPAC.  Orders
          placed on hold shall be canceled or rescheduled within a reasonable
          time.

     6.15 ChipPAC Notice.  ChipPAC shall promptly notify Intel if ChipPAC is
          --------------
          unable to make any scheduled delivery, and shall state the reasons.

7.   REPORTING
     ---------

     7.1  ChipPAC shall provide Intel with a weekly report of all inventories
          (including Die Product inventory), production schedule status, WIP
          inventory, shipment, and any and all engineering and quality data
          required for yield loss analysis to a designated Intel Representative
          at Intel ISSL.  This report must be in Intel's possession by 12:00
          noon each Monday (Korean time) for the previous week.  Intel may at
          any time, upon one (1) business day's notice to ChipPAC, conduct a
          physical inventory of all such Wafer, Die Product, Intel Products, WIP
          and/or Rejects in the possession of ChipPAC.

     7.2  At Intel's option, ChipPAC shall provide the Intel Program Manager,
          with a soft copy or hard copy of monthly reports to a designated Intel
          representative of all shipouts, ending-on-hand inventories (including
          Wafer and Die Product inventory), Rejects, and units in-transit out of
          production Facility to Intel.  This report must be in Intel's
          possession on the Intel month-end Friday by the end of the business
          day (U.S. Pacific Time).  Intel may at any time, upon one (1) business
          day's notice to ChipPAC, cycle count and/or audit inventory all such
          Wafers and Die Product, Intel Product and/or Rejects in the possession
          of ChipPAC.

     *Confidential treatment requested.

                                      -8-
<PAGE>

8.   PRICE AND PAYMENT
     -----------------

     8.1  [redacted*]

     8.2  Prices charged by Hyundai, ChipPAC's predecessor, for the Services
          during the one-year period from September 16, 1996 are specified in

          Exhibit E.  The pricing schedule specified in Exhibit E shall remain
          ---------                                     ---------
          firm or decline for the one-year period from September 16, 1996 unless
          process changes are made by Intel, in which case a revised pricing
          schedule shall be mutually agreed to by both Parties. Notwithstanding
          the above, in extraordinary circumstances wherein Intel requests
          changes to the Intel Product that substantially affect the price or if
          market factors have changed which substantially affect the price, the
          Parties will negotiate a revised pricing schedule which shall be
          mutually agreed to by both Parties.

     8.3  [redacted*]

     8.4  Invoices shall include: purchase order number, description of and
          dates of Services provided, prices and extended totals.  Payment shall
          not constitute acceptance of Intel Products.  Applicable taxes and
          other charges such as duties, customs, tariffs, imposts and government
          imposed surcharges shall be stated separately on ChipPAC's invoice.

     8.5  Additional costs, beyond those described on Exhibit E, shall not be
                                                      ---------
          reimbursed without Intel's prior written approval.

     8.6  ChipPAC shall provide invoices with each shipment to Intel.  All such
          invoices shall be paid by Intel in U.S. dollars, net [redacted*] days
          from the receipt of an acceptable invoice.  The invoice amounts shall
          be calculated based on the pricing set forth in Exhibit E or such
                                                          ---------
          other pricing mutually agreed upon by Intel and ChipPAC.

     *Confidential treatment requested.

                                      -9-
<PAGE>

9.   QUALITY AND RELIABILITY
     -----------------------

     9.1  Qualification Requirements.  ChipPAC is responsible for meeting and
          --------------------------
          maintaining Intel's Quality and Reliability (Q&R) requirements as
          listed in the Specifications referenced in Exhibit B.
                                                     ---------

     9.2  Qualification Stresses and Testing.  ChipPAC is responsible for
          ----------------------------------
          performing all qualification stresses and testing as per the
          Specifications referenced in Exhibit B, except for those stresses and
                                       ---------
          tests which Intel and ChipPAC mutually agree will be performed by
          Intel.  These exceptions will be documented on any new product and/or
          package introduction by Intel to ChipPAC.

     9.3  Traceability.  ChipPAC shall demonstrate to Intel that ChipPAC's
          ------------
          traceability system tracks each Intel Product box and unit to a
          specific fab, assembly and test lot traveler, and is capable of
          tracing to where each Intel Product lot was shipped and on which day.
          Traceability records shall be maintained for five (5) years.

     9.4  Manufacturing and Monitoring.  ChipPAC shall properly manufacture,
          ----------------------------
          monitor, test, and inspect all Intel Product and Rejects resulting
          from the performance of the Services in accordance with the
          specifications in Exhibits A and B.  ChipPAC shall manufacture Intel
                            ----------------
          Product only at the Facilities qualified by Intel and documented in
          the specifications referenced in Exhibits A and B.  ChipPAC may not
                                           ----------------
          move any portion of the manufacturing process to any other facility
          except with the prior written approval of Intel.

     9.5  Change Control.  Requirements and specifications listed in Exhibits A
          --------------                                             ----------
          and B define the change control baseline.  ChipPAC shall notify Intel
          -----
          of any proposed changes from the change control baseline at least
          [redacted*] prior to the receipt of affected Intel
          Product at Intel, per the requirements in Change Control
          Specifications listed in Exhibit B.  ChipPAC shall provide Intel with
                                   ---------
          Q&R data supporting the proposed change and Intel Product samples at
          least [redacted*] prior to the proposed implementation date
          of the change.  ChipPAC shall not make the proposed change without
          Intel's prior written approval.  ChipPAC is responsible for ensuring
          that the Leadtime of affected Intel Products to Intel is met. In the
          event Intel's customers, or Intel, reasonably determine not to accept
          the proposed changes, ChipPAC shall not make such change(s).

     9.6  Failure Analysis Correlation Request.  When potentially defective
          ------------------------------------
          Intel Product is returned to ChipPAC by Intel or Intel's customers,
          ChipPAC shall promptly perform correlation and failure analysis
          against the specifications referenced in Exhibit B,
                                                   ---------

* Confidential treatment requested.

                                      -10-
<PAGE>

          stop processing questionable Intel Product and implement corrective
          action on the Intel Product and WIP. ChipPAC commits to resolve issues
          in accordance with the following timing following receipt of initial
          failure report:

          (a)  Initial Correlation: Go/No-Go electrical or mechanical tests
               shall be performed within [redacted*] of receipt. A telephone
               report to Intel will be the timing end point. ChipPAC shall
               follow-up with a summary of the testing and results. In the event
               of Intel customers' going "lines-down" or approaching a near
               "lines down" situation, Intel shall request initial correlation
               testing reports to be completed within [redacted*] of ChipPAC's
               receipt.

          (b)  Unless otherwise requested, ChipPAC shall complete, implement and
               document failure analysis and/or stop processing questionable
               Intel Product within [redacted*] of receipt.

          (c)  Unless otherwise requested, ChipPAC shall implement a root cause
               corrective action plan within [redacted*] to receipt.

          ChipPAC agrees to provide failure analysis correlation request support
          for up to [redacted*] after last delivery of an Intel Product to
          Intel.

     9.7  Continuous Improvement.  During the production life of each Intel
          ----------------------
          Product, ChipPAC shall seek to continuously improve performance in the
          areas of Q&R pursuant to the requirements and specifications listed in

          Exhibits A and B.  Both Parties shall meet regularly to review
          ----------------
          progress and define improvement actions and objectives.  The meeting
          frequency shall be as agreed by the Parties.  During the production
          period, ChipPAC shall adequately staff to sustain and manage the Intel
          program including supporting programs of continuous improvement.

     9.8  Corrective Action.
          -----------------

          (a)  Intel may periodically sample Intel Product and use the data
               obtained to determine if the Q&R requirements and/or other
               specifications are being met. If Intel determines that
               requirements are not being met, Intel shall notify ChipPAC and
               Intel may reject any affected Intel Product and the affected lots
               and return it to ChipPAC.  If ChipPAC is responsible for the
               failure and is unable to correct the problem after a reasonable
               period of time, Intel may cancel, at no cost or obligation to
               Intel, Releases for Intel Products affected by the problem and
               Intel shall have no liability for WIP.

*Confidential treatment requested.

                                      -11-
<PAGE>

          (b)  If Intel Product fails to consistently meet the Q&R requirements,
               or if in Intel's reasonable opinion, any failure or recurring
               failure by ChipPAC to maintain the specifications referenced in

               Exhibit B could lead to damage to the reputation of Intel or
               ---------
               Intel products, the Parties agree that the senior management of
               the Parties, within two (2) working days after receipt of a
               written notice from Intel of such situation, will commence
               discussions regarding the problem.  The Parties will cooperate
               fully and share all relevant information in attempting to resolve
               the situation.  If the Parties do not mutually agree after such
               discussion that the problems have been resolved, ChipPAC will, at
               Intel's written request, cease manufacturing any Intel Products
               which, in Intel's opinion, may be affected by such reliability,
               quality or process control problems until such time as Intel
               agrees that the problem or problems have been resolved.  Further,
               if ChipPAC is responsible for the failure or recurring failure,
               then Intel may cancel Intel Product orders at no cost or
               obligation to Intel, including for WIP.

     9.9  Audit.  Intel representatives and key customer representatives, upon
          -----
          Intel's request, shall be allowed to visit ChipPAC's assembly and test
          facilities during normal working hours upon reasonable notice to
          ChipPAC for the purpose of monitoring production processes and
          compliance with any requirements set forth in this Agreement.  Upon
          completion of the audit, ChipPAC and Intel will mutually agree to an
          audit closure plan, to be documented in the audit report issued by
          Intel. ChipPAC agrees to execute the audit closure plan within
          [redacted*] of receipt of the audit report.

10.  PACKING AND SHIPMENT
     --------------------

     10.1 ChipPAC shall mark and pack all Intel Product in accordance with the
          specifications referenced in Exhibit B.
                                       ---------

     10.2 Transportation charges and insurance for all returned Intel Products
          and Rejects are to be paid by ChipPAC.  Risk of loss for Intel
          Products and all returned Rejects in transit shall remain with
          ChipPAC.  This paragraph shall not apply in cases where Intel uses a
          designated freight forwarder for Intel Products and Rejects.

     10.3 F.O.B. point for Intel Product is point of origin unless otherwise
          specified by Intel and agreed to by both Parties.   All items shall be
          prepared for shipment in a manner which (i) follows good commercial
          practice, (ii) is acceptable to common carriers for shipment at the
          lowest rate, and (iii) is adequate to ensure safe arrival.  ChipPAC

     *Confidential treatment requested.

                                     -12-
<PAGE>

           shall mark all containers with necessary lifting, handling and
           shipping information, purchase order number, and the date of
           shipment. ChipPAC shall select the most cost effective carrier, given
           the time constraints known to ChipPAC. This paragraph shall not apply
           in cases where Intel uses a designated freight forwarder or provides
           ChipPAC with other written instructions for Intel Products and
           Rejects.

     10.4  ChipPAC may use any freight forwarder of its own designation for
           Rejects being returned under warranty as specified in Section 11
           below, in which case, ChipPAC shall make all transportation
           arrangements and prepay charges of transportation between Intel and
           ChipPAC.

11.  WARRANTY
     --------

     11.1  ChipPAC warrants that the Services for Intel Products performed by
           ChipPAC shall be free from defects in material and workmanship, shall
           not affect the merchantability of Intel Products for so long as such
           Intel Products are used by any means fit for ordinary purposes, and
           shall meet all agreed upon specifications and requirements as stated
           in Section 2, Exhibits A and B. Intel may reject and immediately stop
                         ----------------
           shipment of Intel Product which fails to meet the foregoing warranty.
           If ChipPAC is unable to correct such failure within a reasonable
           time, Intel may cancel, at no cost or obligation to Intel, Releases
           subject to the failure, and Intel shall have no obligation for WIP.
           If such failure continues or affects a significant amount of Product,
           Intel may terminate this Agreement.

     11.2  Claims. Intel Product subject to warranty claims shall be returned to
           ------
           ChipPAC together with an explanation of claim. Intel shall not make a
           claim under this warranty no more than [redacted*] after Intel
           Product delivery. ChipPAC shall replace any Rejects covered by the
           warranty with replacement Intel Products in equivalent number and
           within the appropriate Leadtime as specified on Exhibit F, without
                                                           ---------
           charge to Intel and with ChipPAC paying Intel the amount listed in

           Exhibit F (liquidated damages assessment) for each replacement Die
           ---------
           Product.  Intel has the option to trade the current package
           replacement with a different Intel Product as Intel demand indicates.

     11.3  Intel may, at its option, perform an incoming Intel Product
           inspection within [redacted*] of Intel's receipt of Intel
           Product. Intel shall notify ChipPAC in writing that it will be
           returning Rejects to ChipPAC for verification. ChipPAC shall verify
           that the Intel rejection was appropriate within [redacted*] after
           receipt. If Intel does not send notification to ChipPAC that Rejects
           will be returned, then it is agreed

     *Confidential treatment requested.

                                      -13-
<PAGE>

           that the Intel Products subject to the then current shipment is
           deemed to have passed quality inspection and the warranty period
           begins to run.

     11.4  Rejection Criteria
           ------------------

           (a)  If any full or partial shipment of Intel Product delivered to
                Intel fail to comply with this warranty, then at its option,
                Intel may: i) reject defective Intel Product and return them to
                ChipPAC for rework, or ii) in the event rework is not possible,
                Intel may within [redacted*] from date of rejection, furnish to
                ChipPAC sufficient additional Wafers or Die Product to permit
                ChipPAC to provide replacement of Intel Product at no cost to
                Intel, or iii) reject the work on any or all Rejects and not pay
                for such work.

          (b)   All labor and shipping for reworked and replacement Intel
                Products shall be provided by ChipPAC at no additional charge to
                Intel so long as the assembly requirements for the Intel Product
                being reworked or replaced have not changed since the original
                labor was provided.

          (c)   All rework and replacement Intel Product shall be completed and
                returned to Intel within the maximum TPT (as specified in
                Exhibit C) from the date of receipt by ChipPAC, unless otherwise
                ---------
                agreed to in writing by both Parties.

     11.5  CHIPPAC'S EXPRESS WARRANTIES INCLUDING THE WARRANTY OF
           MERCHANTABILITY SET FORTH IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER
           WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT
           LIMITATION, WARRANTIES AS TO CONDITION, DESCRIPTION, FITNESS FOR A
           PARTICULAR PURPOSE, INFRINGEMENT, OR AS TO ANY OTHER MATTER.

     11.6  Return of Wafers and Die Product; Liquidated Damages; and Accounting
           --------------------------------------------------------------------

           (a)  Return of Wafers and Die Product.  Unless otherwise agreed,
                --------------------------------
                ChipPAC hereby acknowledges and agrees it is responsible to
                Intel for the return of all Wafers and Die Product delivered to
                ChipPAC by Intel; the Wafers and Die Product may be returned as
                Intel Product or otherwise. Any Intel Product not meeting the
                specifications contained in Exhibit A shall be returned to Intel
                                            ---------
                as Rejects (separated and labeled accordingly).

     *Confidential treatment requested.

                                      -14-
<PAGE>

          (b)  [redacted*]

          (c)  Accounting.  Wafers and Die Product shall be reconciled with any
               ----------
               variances dispositioned on a monthly basis, on a report provided
               by ChipPAC within one (1) week following each Intel month end as
               shown by the calendar in Exhibit G. ChipPAC shall also provide a
                                        ---------
               detailed explanation of the reason(s) for any failure or
               inability to return delivered Wafers and Die Product.  This
               accounting is supplemental to the reports specified in Section
               7.2 and subject to Intel's audit rights specified in Section 9.9.

     11.7 RMA Procedures.  All Rejects or Finished Products returned to ChipPAC
          --------------
          by Intel, under this Section 11, shall be in accordance with ChipPAC's
          Return Material Authorization ("RMA") set forth in Exhibit H.  ChipPAC
                                                             ---------
          shall pay all freight charges on returned materials.

12.  INSURANCE
     ---------

     12.1 ChipPAC shall bear all risk of loss for all Intel Product, WIP, Pre-
          Production Parts, Rejects, Wafer and Die Product while at its
          Facility, including providing at its own expense, adequate Commercial
          Property Insurance or Inland Marine Insurance against loss of or
          damage to the Wafer and Die Product which shall cover, as a minimum,
          the replacement cost of all the Wafer and Die Product provided by
          Intel, with Intel named as a Loss Payee.  ChipPAC shall bear the cost
          of any deductible or co-insurance.  In the event of loss or damage,
          ChipPAC shall promptly reimburse Intel for all replacement costs,
          including all such deductible or co-insurance costs.

     12.2 Without limiting or qualifying ChipPAC's liabilities, obligations, or
          indemnities otherwise assumed by ChipPAC pursuant to this Agreement,
          ChipPAC shall maintain, at its sole cost and expense with companies
          acceptable to Intel, Commercial General Liability and Automotive
          Liability Insurance with limits of liability not less than $1,000,000
          per occurrence and including liability coverage for

     *Confidential treatment requested.

                                      -15-
<PAGE>

          bodily injury or property damage (i) assumed in a contract or
          agreement pertaining to ChipPAC's business, and (ii) arising out of
          ChipPAC's Services. ChipPAC's insurance shall be primary and any
          applicable insurance maintained by Intel shall be excess and non-
          contributing. The above coverage shall name Intel as an additional
          insured, and shall contain a severability of interest clause.

     12.3 ChipPAC shall also maintain Statutory Workers' Compensation coverage,
          including a Broad Form All States endorsement in the amount required
          by law, and Employer's Liability insurance coverage with liability
          limits of not less than $1,000,000 per occurrence.  Such insurance
          shall include an insurer's waiver of subrogation in favor of Intel.

     12.4 ChipPAC shall provide Intel with properly executed Certificates of
          Insurance prior to furnishing any Intel Product or Services hereunder
          and shall notify Intel, no less than thirty (30) days in advance of
          any reduction or cancellation of the above coverage.

     12.5 Notwithstanding the insurance requirements of this Agreement, ChipPAC
          shall be given the option to self insure for so long as ChipPAC's net
          worth as a corporate entity remains above one billion dollars
          ($1,000,000,000).  Coverage shall apply to any loss which but for the
          existence of a deductible or self-insured retention would be covered
          under the insurance requirements described herein.

13.  LIMITATION OF LIABILITY
     -----------------------

     13.1 [redacted*]

14.  INDEMNIFICATION
     ---------------

     14.1 ChipPAC agrees to defend, indemnify and hold Intel harmless from and
          against any and all claims, liability, demands, suits, forfeitures,
          penalties, judgment, and the associated costs and expenses (including
          attorney's fees), which it may hereafter

     *Confidential treatment requested.

                                      -16-
<PAGE>

          incur, become responsible for or payout as a result of death or
          personal injury (including bodily injury) to any person, destruction
          or damage to any property, contamination of or adverse affects on the
          environment and any clean-up costs in connection therewith, or any
          violation of law, governmental regulation or orders, caused in whole
          or in part by i) ChipPAC's breach of any term or provision of this
          Agreement, or ii) any acts, errors or omissions by ChipPAC, its
          employees, officers, agents, representatives, or sub-contractors of
          any terms or provision of this Agreement, or iii) Services or Piece
          Parts provided by ChipPAC.

     14.2 Intellectual Property Indemnification.  ChipPAC shall defend,
          -------------------------------------
          indemnify, and hold Intel and its customers harmless from any costs,
          expenses (including attorney's fees), losses, damages or liability
          incurred because of actual or alleged infringement of any patent,
          copyright, trade secret, trademark, maskwork or other proprietary
          right arising out of the use or sale by Intel or use by Intel's
          customers of Intel Product.  Intel shall notify ChipPAC of such claim
          or demand and shall permit ChipPAC to participate in the defense
          hereof.  If an injunction issues as a result of any such claim,
          ChipPAC agrees at its expense and Intel's option to either (i) procure
          for Intel the right to continue using Intel Product, (ii) replace them
          with non-infringing Intel Product, (iii) modify them so they become
          non-infringing, or (iv) refund to Intel the amount paid. Such
          indemnification shall not apply where items are manufactured to
          Intel's detailed design.

15.  TERM AND TERMINATION
     --------------------

     15.1 This Agreement shall become effective only upon the consummation of
          the recapitalization transactions contemplated by that certain
          Agreement and Plan of Recapitalization and Merger dated as of March
          13, 1999, as amended, by and among Hyundai Electronics Industries Co.,
          Ltd., Hyundai Electronics America, ChipPAC, Inc. and ChipPAC Merger
          Corp., and shall be of no force or effect prior to such time. This
          Agreement shall have prospective effect from the consummation of such
          recapitalization transactions only and shall have no retroactive
          effect to any time prior to the consummation of such recapitalization
          transactions. This Agreement shall forthwith lapse if the
          Recapitalization Agreement is terminated. This Agreement shall remain
          in effect [redacted*] after July 1, 1999, unless extended by mutual
          agreement of the parties.

     15.2 Termination by Intel for Cause.  Notwithstanding anything in Paragraph
          ------------------------------
          15.1 to the contrary, if ChipPAC fails to meet Intel's quality
          standards, specifications, rejection rates or yield rates as specified
          in Exhibits B and C, or any other material breach of this Agreement,
             ----------------
          then Intel may give ChipPAC [redacted*] written notice of

     *Confidential treatment requested.

                                      -17-
<PAGE>

          intention to terminate this Agreement.  If ChipPAC has not corrected
          such deficiencies as specified by Intel within said [redacted*]
          period, then Intel may terminate this Agreement by written notice at
          the end of said [redacted*] period.

     15.3 Termination by ChipPAC for Cause.  Notwithstanding anything in
          --------------------------------
          Paragraph 15.1 to the contrary, if Intel has committed a material
          breach of this Agreement, then ChipPAC may give Intel [redacted*]
          written notice of intention to terminate this Agreement.  If Intel has
          not corrected such deficiencies as specified by ChipPAC within said
          [redacted*] period, then ChipPAC may terminate this Agreement by
          written notice at the end of said [redacted*] period.

     15.4 Termination by Mutual Agreement.  In addition to the parties'
          -------------------------------
          respective rights above, this Agreement may be terminated by mutual
          written agreement by and between ChipPAC and Intel.

     15.5 [redacted*]

     15.6 Obligations Upon Termination
          ----------------------------

          (a)  In the event of termination by mutual agreement or termination by
               either party for cause, ChipPAC shall, within thirty (30) days
               from date of termination, provide a certified accounting for and
               return to Intel at Intel's cost and expense all Wafers, Die
               Product, Intel Product, Pre-Production Parts, WIP, Rejects,
               specifications, documentation, Intel developed software, and any
               other materials provided to ChipPAC by Intel during the term of
               this Agreement.

          (b)  If ChipPAC does not return said Wafers, Die Product, Intel
               Product, Pre-Production Parts, WIP, or other materials provided
               by Intel within such thirty (30) day period, Intel shall invoice
               ChipPAC and ChipPAC shall pay Intel an

     *Confidential treatment requested.

                                      -18-
<PAGE>

               amount equal to Intel's list price or purchase price or, if
               neither is available, the replacement costs for all non-returned
               materials.

          (c)  Intel shall have no obligations upon termination except to pay
               any outstanding invoices for Intel Product ordered by Intel and
               produced by ChipPAC or for WIP based upon the agreed upon
               cancellation charges for each Intel Product, as a result of Intel
               orders placed prior to the termination notice.

          (d)  Intel's rights and remedies herein are in addition to any other
               rights and remedies provided by law or in equity.

          (e)  There shall be no charges for termination of orders for Services
               not yet provided.  Intel shall be responsible for payment of
               authorized Services already provided by ChipPAC but not yet
               invoiced.

          (f)  Before assuming any payment obligation under this Section, Intel
               may inspect ChipPAC's work and audit all relevant documents.

     15.7 Continuing Rights and Obligations.  The respective rights and
          ---------------------------------
          obligations of ChipPAC and Intel under the provisions of Section 4
          OWNERSHIP, Section 5 CONFIDENTIALITY AND PUBLICITY, Section 11
          WARRANTY, Section 13 LIMITATION OF LIABILITY, Section 14
          INDEMNIFICATION, Paragraph 18.1 Controlling Law, and Section 19
          Dispute Resolution shall survive termination of this Agreement.

16.  HAZARDOUS MATERIALS
     -------------------

     16.1 If Intel Product, Rejects or Services include hazardous materials as
          defined by relevant local, state and national law, ChipPAC represents
          and warrants that ChipPAC and its personnel providing Services and
          Piece Parts to Intel understand the nature of and hazards associated
          with the design and/or service of items including handling,
          transportation, and use of such hazardous materials, as applicable to
          ChipPAC.  Prior to causing hazardous materials to be on Intel's
          property, ChipPAC shall obtain written approval from Intel's site
          Environmental/Health/Safety organization.  ChipPAC shall be fully
          responsible for indemnification to Intel for any liability resulting
          from ChipPAC's actions in connection with (i) providing such hazardous
          materials to Intel, or (ii) the use of such hazardous materials in
          providing Intel Product, Rejects, Piece Parts or Services to Intel.
          The foregoing indemnification and liability shall not be applied to
          the actions or measures taken by

                                      -19-
<PAGE>

          ChipPAC pursuant to the express written instructions of Intel where
          ChipPAC has stated reasonable objection.

     16.2 As they become available, ChipPAC shall provide Intel with material
          safety data sheets and any other documentation reasonably necessary to
          enable Intel to comply with applicable laws and regulations.

     16.3 ChipPAC hereby certifies that Intel Product or Piece Parts supplied to
          Intel do not contain and are not manufactured with any ozone depleting
          substances, as those terms are defined by law.

17.  NEW DEVELOPMENTS
     ----------------

     17.1 All inventions and discoveries, whether or not patentable, made by
          Intel employee(s) in the course of performance of this Agreement not
          using the confidential information of ChipPAC shall be the sole and
          exclusive property of Intel, and Intel shall retain any and all rights
          to file at its sole discretion any patent application thereon.

     17.2 All inventions and discoveries, whether or not patentable, made by
          ChipPAC employee(s) in the course of performance of this Agreement not
          using the Confidential Information of Intel shall be the sole and
          exclusive property of ChipPAC, and ChipPAC shall retain any and all
          rights to file at its sole discretion any patent application thereon.

     17.3 If Intel and ChipPAC jointly made inventions or discoveries, whether
          or not patentable, not using the confidential information of either
          Intel or ChipPAC, in the course of performance of this Agreement, then
          unless provided herein, such joint invention shall be jointly owned by
          Intel and ChipPAC with each party having the right to exploit and
          grant licenses in respect to such inventions and any patents arising
          therefrom, without the consent of or accounting to the other Party.
          In the event of a joint invention, the Parties shall mutually agree
          which Party shall have the responsibility for preparing and filing any
          patent application on the invention and the Parties agree to execute
          documents required for and equitably share in the expenses associated
          with obtaining and maintaining such patents.

     17.4 In the event one Party elects not to seek or maintain patent
          protection for any joint invention in any particular country or not to
          share equitably in the expenses thereof with the other Party, that
          other Party shall have the right to apply for or maintain such patent
          protection at its own expense in such country, and shall have full
          control over

                                      -20-
<PAGE>

          the protection and maintenance therefor, even though title and rights
          to any patent resulting therefrom shall be jointly owned.

18.  GENERAL
     -------

     18.1 Controlling Law.  Any claim arising under or relating to this
          ---------------
          Agreement shall be governed by the internal substantive laws of the
          State of Delaware without regard to principles of conflict of laws.
          Each party hereby agrees to jurisdiction and venue in the State of
          Delaware or federal courts located in Delaware for all disputes and
          litigation arising under or relating to this Agreement.  This
          provision is meant to comply with 6 Del. C. Section 2708(a).

     18.2 Compliance With Laws.  ChipPAC shall comply with all applicable
          --------------------
          federal, state and local laws and regulations governing the
          maintenance and operation of the Facility and performance of Services
          covered by this Agreement, including, but not limited to, Department
          of Commerce, Environmental Protection Agency and Department of
          Transportation regulations applicable to hazardous materials and all
          employment and labor laws governing ChipPAC's personnel providing
          Services to Intel.

     18.3 Export Control.  ChipPAC shall not export, either directly or
          --------------
          indirectly, any Wafers, Die Product or Intel Product without first
          obtaining any required license or other approval from the U.S.
          Department of Commerce or any other agency or department of the United
          States Government.

     18.4 Force Majeure.  The Parties hereto shall not be liable for any failure
          -------------
          to perform due to unforeseen circumstances or causes beyond that
          Party's reasonable control. Examples of such causes include, but are
          not limited to, acts of God, war, riot, embargoes, acts of civil or
          military authority, fire, flood, accidents, labor disputes (but no
          more than one (1) labor dispute occurrence per year) earthquakes or
          shortages of transportation facilities, fuel or materials which cannot
          be reasonably replaced from other sources.  If the Services are to be
          delayed by such contingencies, ChipPAC shall immediately notify Intel
          in writing and Intel may either i) extend time of performance, or ii)
          terminate the uncompleted portion of the order at no cost to Intel, or
          iii) terminate this Agreement under the provisions of Paragraph 15.3.
          In cases of a labor dispute ChipPAC shall be responsible to return all
          Intel Products, Wafers, Die Product, Rejects, documentation and
          related materials to Intel in accordance with Paragraph 15.5 if so
          requested by Intel.

     18.5 No Partnership/Joint Venture.  Performance by the Parties under this
          ----------------------------
          Agreement shall be as independent contractors.  Nothing contained
          herein or performed under the

                                      -21-
<PAGE>

          terms of this Agreement shall constitute the Parties entering upon a
          joint venture or partnership, or shall constitute either Party as the
          agent of the other Party for any purpose.

     18.6 Assignment.  Intel may assign this Agreement to its subsidiaries or
          ----------
          affiliates, authorized distributors, or any successor by merger
          without ChipPAC's consent; and ChipPAC may assign this Agreement to
          its subsidiaries or affiliates without Intel's consent.  Otherwise,
          this Agreement may not be assigned or otherwise transferred, in whole
          or in part by either Party without the other's prior written consent.
          No attempt to assign or to transfer in violation of this provision by
          either Party shall be binding upon the other.

     18.7 Trademarks.  Neither Party has any right to use any trademark, logo,
          ----------
          trade name or other identifying mark of the other Party.

     18.8 Waiver.  Failure by either Party to insist in any instance upon strict
          ------
          conformance to any term or condition herein, or failure by either
          Party to act in the event of a breach or default, shall not be
          construed as a consent to or a waiver of that breach or default or any
          subsequent breach or default of the same or of any other term or
          condition contained herein.

     18.9 Notices.  Any notice required under this Agreement shall be given in
          -------
          writing and delivered in person or by certified or first-class United
          States mail, properly addressed and stamped with the required postage,
          to the intended recipient as follows:

                    For ChipPAC Limited:            For Intel:

                    ChipPAC Limited                 Intel Corporation
                    Craigmuir Chambers              M/S C6-404
                    Road Town, Tortola              5000 West Chandler Boulevard
                    British Virgin Islands          Chandler, AZ 85226
                    Attention:  Resident Director   Attention:  Legal Department

                                      -22-
<PAGE>

               cc:                                   cc:
               ChipPAC, Inc.                         Intel Corporation
               3151 Coronado Drive                   M/S   SC4-203
               Santa Clara, CA 95054, USA            2200 Mission College Blvd.
              Attention:  Chief Executive Officer    Santa Clara, CA 95052
                                                     Attention: Legal Department

     Either party may change its address as listed above by providing advance
     written notice to the other Party.

     18.10  Severability.  If any provision of this Agreement shall be held to
            ------------
            be invalid, illegal or unenforceable, the validity, legality and
            enforceability of the remaining provisions shall not in any way be
            affected or impaired thereby.

     18.11  Order of Precedence.
            -------------------

            (a)  Orders placed hereunder during the term of this Agreement shall
                 be governed by and subject to only the terms and conditions of
                 this Agreement and applicable Releases. If any inconsistency or
                 conflict should arise between this Agreement and the applicable
                 Releases, the order of precedence in resolving such
                 inconsistency or conflict shall be:

                 (1)  Release Instructions;

                 (2)  Amendments to this Agreement;

                 (3)  This Agreement;

                 (4)  Product Specifications; and

                 (5)  Exhibits to this Agreement.

            (b)  Notwithstanding the foregoing, the Parties agree that the terms
                 and conditions preprinted on the Releases and/or ChipPAC's
                 order acknowledgment forms, shall not apply.

            (c)  It is expressly agreed that any lack of reference to this
                 Agreement on any Purchase Order issued by Intel shall not
                 affect the applicability of this Agreement to such order.

                                      -23-
<PAGE>

     18.12  Entire Agreement.  This Agreement, including the recitals and the
            ----------------
            referenced Exhibits, set forth the entire Agreement of the Parties
            with respect to the subject matter hereof, and supersedes all prior
            and contemporaneous negotiations, correspondence and agreements
            pertaining thereto. No modification or waiver of any provision of
            this Agreement or consent to any departure therefrom shall be
            effective unless made in writing by authorized representatives of
            the Parties hereto.

     18.13  Ownership and Bailment Responsibilities.  Any specifications,
            ---------------------------------------
            drawings, schematics, technical information, data, tools, dies,
            patterns, masks, samples, gauges, test equipment and other materials
            furnished to ChipPAC or paid for by Intel shall (i) be kept
            confidential, (ii) remain or become Intel's property, (iii) be used
            by ChipPAC exclusively for Intel's orders, (iv) be clearly marked as
            Intel's property, (v) be segregated when not in use, (vi) be kept in
            good working condition at ChipPAC's expense, and (vii) be shipped to
            Intel promptly on Intel's demand or upon termination or expiration
            of this Agreement, whichever occurs first.

            ChipPAC shall adequately insure Intel's property. ChipPAC shall be
            liable for loss or damage to Intel's property while in ChipPAC's
            possession or control.

19.  DISPUTE RESOLUTION
     ------------------

     19.1   All disputes arising directly under the express terms of this
            Agreement or the grounds for termination thereof shall be resolved
            as follows:

            The senior management of both Parties shall meet to attempt to
            resolve such disputes. If the disputes cannot be resolved by the
            senior management, either Party may make a written demand for formal
            dispute resolution and specify therein the scope of the dispute.
            Within thirty (30) days after such written notification, the Parties
            agree to meet for one day with an impartial mediator and consider
            dispute resolution alternatives other than litigation. If an
            alternative method of dispute resolution is not agreed upon within
            thirty (30) days after the one (1) day mediation, either Party may
            begin litigation proceedings.

20.  EXHIBITS
     --------

     The following Exhibits are included as part of this Agreement:

     Exhibit A - Services Requirements
     Exhibit B - Specifications/Performance Standards

                                      -24-
<PAGE>

     Exhibit C - Yields/TPT/LIPAS
     Exhibit D - Intel Wafer and Die Product Provided to ChipPAC
     Exhibit E - Contract Pricing/Cancellation Liability
     Exhibit F - Liquidated Damages/Replacement Product Leadtime
     Exhibit G - Intel Work Week Calendar
     Exhibit H - ChipPAC's RMA Procedures

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
indicated by their respective signatures.

CHIPPAC LIMITED                              INTEL CORPORATION

By: /s/ Richard Parsons                      By: /s/ Craig C. Brown
    ---------------------------------            -------------------------------
    Signature                                    Signature

Richard Parsons for Westlaw Limited          Craig C. Brown
-------------------------------------        -----------------------------------
Name                                         Name

Director                                     Director
-------------------------------------        -----------------------------------
Title                                        Title

July 20, 1999                                July 30, 1999
-------------------------------------        -----------------------------------
Date                                         Date

                                      -25-
<PAGE>

                                   EXHIBIT A

                             SERVICES REQUIREMENTS
                             ---------------------

     [redacted*]

     *Confidential treatment requested.

                                      A-1

<PAGE>

                                                              INTEL CONFIDENTIAL
                                                              ------------------

                                  EXHIBIT "B"

                     SPECIFICATIONS/PERFORMANCE STANDARDS
                     ------------------------------------

     [redacted*]

     *Confidential treatment requested.

<PAGE>

                                                              INTEL CONFIDENTIAL
                                                              ------------------

               SPECIFICATIONS/PERFORMANCE STANDARDS (Continued)
               ------------------------------------------------
<PAGE>

                                                              INTEL CONFIDENTIAL
                                                              ------------------

               SPECIFICATIONS/PERFORMANCE STANDARDS (Continued)
               ------------------------------------------------
<PAGE>

                                   EXHIBIT C

                                YIELD/TPT/LIPAS
                                ---------------

                                  [Redacted*]

*Confidential treatment requested.

                                      C-1
<PAGE>

                                   EXHIBIT D

                INTEL WAFERS AND DIE PRODUCT PROVIDED TO CHIPPAC
                ------------------------------------------------

                                  [Redacted*]

*Confidential treatment requested.

                                      D-1
<PAGE>

                                   EXHIBIT E

                 CONTRACT PRICING REV. 1/CANCELLATION LIABILITY
                 ----------------------------------------------

CONTRACT PRICING
----------------

                                  [REDACTED*]

*Confidential treatment requested.

                                      E-1

<PAGE>

                                   EXHIBIT F

               LIQUIDATED DAMAGES & REPLACEMENT PRODUCT LEADTIME
               -------------------------------------------------

                                  [REDACTED*]

*Confidential treatment requested.

                                      F-1
<PAGE>

                                                              INTEL CONFIDENTIAL

                                  EXHIBIT "G"
                        INTEL WORK WEEK CALENDAR - 1995
                        -------------------------------

                                  [REDACTED*]

*Confidential treatment requested.

<PAGE>

                                   EXHIBIT H

                           CHIPPAC'S RMA PROCEDURES
                           -------------------------

                                  [REDACTED*]

*Confidential treatment requested.

                                      H-1

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