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Components | February 01, 2012

STATS ChipPAC stops assembly operations in Thailand plant

STATS ChipPAC Ltd. will not resume assembly operations in its Thailand plant due to extensive equipment and facility damages beyond economic restoration.
This comes after an in-depth assessment of the Thailand Plant situated in the Navanakorn Industrial Estate, Pathum Thani, which has been suspended due to the flooding in Thailand during the fourth quarter of 2011.

Partial operations in test and Wafer Level Chip Scale Packaging ("WLCSP") will be supported from the Thailand Plant until the third quarter of 2012. The company will continue to shift production to its other manufacturing locations in Singapore, Korea and China to support demand from the customers affected by the disruption of the Thailand Plant.

"The decision to not resume full operations in Thailand was painful but unavoidable given the significant damage to our Thailand assembly operational environment that severely affected our ability to support the ongoing demand from our customers. While the Thailand Plant was suspended, we shifted production to other manufacturing locations in order to support ongoing customer demand. The extensive equipment and facility damages and the continuing shift of production to the Company's other manufacturing locations in Singapore, Korea and China have resulted in substantially reduced capability and scale of the Thailand Plant," said Tan Lay Koon, Chief Executive Officer, STATS ChipPAC. "The facility restoration period and the extensive requirements of resuming full production in the Thailand Plant make it uneconomical for the Company to return to full manufacturing operation."

As the Company focuses on shifting production to other manufacturing locations in Singapore, Korea and China to support demand from affected customers, it expect that approximately 1,250 employees, representing 12% of its global workforce, will be affected by the plan to not resume assembly operations and to maintain partial operations in test and WLCSP in the Thailand Plant until the third quarter of 2012.

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