STATS ChipPAC is expected to report tomorrow morning

SINGAPORE (XFN-ASIA) - Chip testing and packaging company STATS
ChipPAC is
expected to report tomorrow morning its first quarterly net profit in
six
quarters in the three months to December, as burgeoning demand for
consumer electronics products has helped boost orders for chips,
analysts
said.

STATS ChipPAC also likely benefited from improved margins given
tight
industry capacity, they added.

Analysts polled by XFN-Asia said STATS ChipPAC is likely to post
net
profit of 8.77-10.5 mln usd in the fourth quarter to December.

For the full year, the company will likely post a net loss of
between
32. 69-34.42 mln usd, compared to the net loss of 467.72 mln loss it
posted a year ago, which included a 453 mln usd goodwill writedown
related
to the merger of STATS and ChipPAC.

The company posted a net loss of 43.19 mln usd in the nine months
to
September.

In October, STATS ChipPAC said sales should improve by another
14-18
pct in the fourth quarter compared to the third, allowing the company
to
return to profit.

Kim Eng Securities analyst Dharmo Soejanto forecasts STATS
ChipPAC's
fourth-quarter net profit at 10.50 mln usd on sales of 356 mln, driven
by
strong demand for chips used in consumer electronics and communication
products.

"Capacity tightness in the outsourced test and assembly sector
has
likely provided a further lift," Soejanto said.

Merrill Lynch, which sees STATS ChipPAC's fourth quarter net
profit
at 8. 77 mln usd, said the firm's operating margin is likely to have
increased in the last quarter compared to Q3 as uitilization rates
improved.

"We estimate assembly (packaging) and test utilization rates
(percentage) will reach 82 pct and 75 pct, respectively, in the fourth
quarter 2005, from 79 pct and 66 pct in the third quarter of 2005,
respectively," Merrill Lynch said.

"Therefore the operating margin may improve slightly to 6.3 pct
in
the fourth quarter 2005 from 3.5 pct in third quarter of 2005," it
said.

Morgan Stanley, which pegs the firm's full-year loss at 33 mln
usd,
translating to a fourth-quarter net profit of 10.19 mln, said it
expects
STATS ChipPAC to enjoy strong sales growth ahead given its exposure to
the
"high-growth consumer and communications segment and potential
overflow
business due to extremely tight capacity utilization at its Taiwanese
peers".

Additionally, margins should also improve as it benefits from
"stable
to firm" average selling prices, Morgan Stanley said.

Credit Suisse First Boston analyst Lim Keng Hock forecasts STATS
ChipPAC fourth quarter net profit at 9.6 mln usd and a full-year net
loss
of 33.59 mln, while Daiwa Institute of Research analyst Pranab Sarmah
forecasts STATS ChipPAC fourth quarter net profit at 9.2 mln usd, with
a
full-year net loss seen at 34 mln.

While Kim Eng's Soejanto also sees further earnings growth for
STATS
ChipPAC this year, earnings in the current quarter to March are
expected
to slow due to fewer working days.

Merrill Lynch said it expects the company to guide a "mid
single-digit sales decline" in the first quarter.

"Our channel checks suggest 3G handset chips could remain strong
during the first quarterof 2006 while PC, wireline and consumer could
experience a seasonal correction," Merrill Lynch said.

Three brokerages forecasts STATS ChipPAC to report a net profit
of
between 38-71 mln usd this year.