STATS ChipPAC shutters Thailand semiconductor packaging plant after floods

January 31, 2012 — STATS ChipPAC Ltd. (SGX-ST:STATSChP), semiconductor test and advanced packaging service provider, decided not to resume semiconductor assembly operations in its Thailand plant, owing to extensive equipment and facility damages sustained during the disastrous floods in Q4 2011.

The plant was located in the Navanakorn Industrial Estate, Pathum Thani, Thailand. Approximately 1,250 employees, about 12% of STATS ChipPAC’s global workforce, will be affected by the plan, and will receive fair severance benefits and other support. STATS ChipPAC found the initial flood restoration effort taking longer than expected, and said in early December that it would try to be on-line in January.  

Partial wafer-level chip-scale packaging (WLCSP) and test operations will continue until Q3 2012. STATS ChipPAC is shifting production to its other manufacturing locations in Singapore, Korea, and China. The packaging company recently held the groundbreaking ceremony for a new factory in Singapore.

The "significant damage" to STATS ChipPAC’s Thailand operations made the decision "painful but unavoidable," said Tan Lay Koon, president and CEO, STATS ChipPAC. "The facility restoration period and the extensive requirements of resuming full production in the Thailand Plant make it uneconomical … to return to full manufacturing operation."

STATS ChipPAC incurred flood-related charges totalling $55.5 million comprising goodwill impairment ($24.5 million), plant and equipment impairment ($16.3 million), and other related charges ($14.7 million) in Q4 2011. The Company expects to file a property damage and business interruption claim with its insurers during Q1 2012.

The suspension of operations at the Thailand Plant due to flood accounted for a 7.6% reduction in revenue for Q4 2011 compared to Q3 2011. "Despite a revenue reduction of 7.6% for the fourth quarter of 2011 compared to the prior quarter resulting from the suspension of our Thailand operation due to flood, our revenue for the fourth quarter of 2011 only decreased by 3.8% over prior quarter as we benefited from strong demand for our services in the communications market," said Koon.

STATS ChipPAC Ltd. provides semiconductor packaging design, assembly, test and distribution solutions in diverse end market applications including communications, digital consumer and computing. STATS ChipPAC is listed on the SGX-ST. Further information is available at

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