TAIPEI, Taiwan, Aug. 5 /Xinhua-EMWNews/ -- Advanced

Semiconductor Engineering, Inc. (TAIEX: 2311; NYSE: ASX) ("We", "ASE", or

the "Company"), the world's largest independent provider of IC packaging

and testing services, today reported unaudited net revenues (Note 1) of

NT$25,610 million for the second quarter of 2008 (2Q08), up 10%

year-over-year and up 4% sequentially. Net income for the quarter totaled

NT$2,412 million, down from NT$2,575 million in 2Q07 and up from NT$2,337

million in 1Q08. Diluted earnings per share for the quarter was NT$0.44 (or

US$0.072 per ADS), compared to NT$0.48 for 2Q07 and NT$0.43 for 1Q08.



    Note 1:



    All financial information presented in this press release is unaudited,

consolidated and prepared in accordance with accounting principles

generally accepted in the Republic of China, or ROC GAAP. Such financial

information is generated internally by us, and has not been subjected to

the same review and scrutiny, including internal auditing procedures and

review by our independent auditors, to which we subject our audited

consolidated financial statements, and may vary materially from the audited

consolidated financial information for the same period. Any evaluation of

the financial information presented in this press release should also take

into account our published audited consolidated financial statements and

the notes to those statements. In addition, the financial information

presented is not necessarily indicative of our results for any future

period.






    RESULTS OF OPERATIONS



    2Q08 Results Highlights



    -- Net revenue contribution from IC packaging operations (including module

       assembly), testing operations, and substrates sold to third parties was

       NT$20,033 million, NT$5,102 million and NT$475 million, respectively,

       and each represented approximately 78%, 20% and 2% respectively, of

       total net revenues for the quarter.

    -- Cost of revenues was NT$19,098 million, up 13% year-over-year and up 3%

       sequentially.

       -- As a percentage of total net revenues, cost of revenues was 75% in

          2Q08, up from 73% in 2Q07 and relatively unchanged compared to 1Q08.

       -- Raw material cost totaled NT$7,695 million during the quarter,

          representing 30% of total net revenues, compared with NT$7,301

          million and 30% of net revenues in the previous quarter.

       -- Depreciation, amortization and rental expenses totaled NT$3,972

          million during the quarter, down 4% year-over-year and up 1%

          sequentially.



    -- Total operating expenses during 2Q08 were NT$2,928 million, including

       NT$980 million in R&D and NT$1,948 million in SG&A.  Compared with

       operating expenses of NT$2,836 million in 1Q08, the sequential increase

       was primarily attributable to bonuses paid to employees and

       compensation to directors and supervisors of one of our subsidiaries in

       2Q08.  Total operating expenses as a percentage of net revenues for the

       current quarter were 11%, relatively unchanged compared with 2Q07 and

       1Q08.

    -- Operating profit for the quarter totaled NT$3,584 million, up from

       NT$3,352 million in the previous quarter.  Operating margin was 14% in

       2Q08 and remained unchanged compared with the previous quarter.

    -- In terms of non-operating items:



       -- Net interest expense was NT$268 million, down from NT$275 million a

          quarter ago.

       -- Net exchange gain of NT$294 million was primarily attributable to

          exchange gains from the appreciation of the Renminbi against the U.S.

          dollar.

       -- Gain on long-term investment of NT$28 million was primarily

          attributable to investment income of NT$32 million from USI and

          investment loss of NT$3 million from Hung Ching Construction.

       -- Other non-operating expenses of NT$76 million were primarily related

          to loss from inventory provision adjustment and other miscellaneous

          expenses.  Together with other non-operating expenses, total non-

          operating expenses for the quarter were NT$22 million, compared to

          NT$292 million for 2Q07 and NT$69 million for 1Q08.



    -- Income before tax was NT$3,562 million for 2Q08, compared with NT$3,283

       million in the previous quarter.  We recorded an income tax expense of

       NT$779 million during the quarter, compared with an income tax expense

       of NT$411 million in 1Q08.  The sequential increase of the income tax

       expense was primarily due to the undistributed earnings tax of one of

       our subsidiaries in 2Q08.  Minority interest was NT$371 million for

       2Q08, down from NT$535 million in the previous quarter, primarily due

       to the completion of the ASE Test privatization transaction at the end

       of May.

    -- In 2Q08, net income was NT$2,412 million, compared to net income of

       NT$2,575 million for 2Q07 and NT$2,337 million for 1Q08.

    -- Our total number of shares outstanding at the end of the quarter was

       5,476,949,209, excluding treasury stock.  Our diluted EPS for 2Q08 was

       NT$0.44, or US$0.072 per ADS, based on 5,494,051,808 weighted average

       number of shares outstanding in 2Q08.



    LIQUIDITY AND CAPITAL RESOURCES

    -- As of June 30, 2008, our cash and other financial assets totaled

       NT$32,648 million, compared to NT$29,127 million on March 31, 2008.

    -- Capital expenditures in 2Q08 totaled US$130 million, of which US$71

       million was used for IC packaging, US$56 million was used for testing,

       and US$3 million was used for interconnect materials.

    -- As of June 30, 2008, we had total bank debts of NT$64,687 million,

       compared to NT$38,794 million as of March 31, 2008.  The increase in

       our bank debt was mainly attributable to the financing of the ASE Test

       privatization.  Total bank debts consisted of NT$12,456 million of

       revolving working capital loans, NT$6,162 million of the current

       portion of long-term debts, NT$1,375 million of current portion of

       bonds payable, NT$40,663 million of long-term debts and NT$4,031

       million of long-term bonds payable.  Total unused credit lines were

       NT$69,692 million.

    -- Current ratio as of June 30, 2008 was 1.24, compared to 1.57 as of

       March 31, 2008.  Net debt to equity ratio was 0.57 as of June 30, 2008.

    -- Total number of employees was approximately 30,363 as of June 30, 2008.



    Business Review

    IC Packaging Services (Note 2)

    -- Net revenues generated from our IC packaging operations were NT$20,033

       million during the quarter, up by NT$2,004 million or 11% year-over-

       year and up by NT$806 million or 4% sequentially.  On a sequential

       basis, the increase in packaging net revenue was primarily due to an

       increase in sales volume.

    -- Net revenues from advanced substrate and leadframe-based packaging

       accounted for 84% of total IC packaging net revenues during the quarter,

       which equaled the previous quarter.

    -- Gross margin for our IC packaging operations was 21%, down by 3% year-

       over-year and unchanged sequentially.

    -- Capital expenditures for our IC packaging operations amounted to US$71

       million during the quarter, of which US$61 million was used for

       wirebonding packaging capacity, and US$10 million was used for wafer

       bumping and flip chip packaging equipment.

    -- As of June 30, 2008, there were 8,426 wirebonders in operation. 358

       wirebonders were added, of which 119 wirebonders were obtained from the

       acquisition of ASE Weihai Inc. and 58 wirebonders were disposed of

       during the quarter.

    -- Net revenues from flip chip packages and wafer bumping services

       accounted for 10% of total packaging net revenues, up by 1 percentage

       point from the previous quarter.



    Note 2:

    IC packaging services include module assembly services.



    Testing Services

    -- Net revenues generated from our testing operations were NT$5,102

       million, up by NT$377 million or 8% year-over-year and up by NT$207

       million or 4% sequentially.

    -- Final testing contributed 77% to total testing net revenues, and stay

       unchanged versus previous quarter.  Wafer sort contributed 20% to total

       testing net revenues, up by 1 percentage points from the previous

       quarter.  Engineering testing contributed 3% to total testing net

       revenues, down by 1 percentage point from the previous quarter.

    -- Depreciation, amortization and rental expense associated with our

       testing operations amounted to NT$1,475 million, down from NT$1,574

       million in 2Q07 and up from NT$1,455 million in 1Q08.

    -- In 2Q08, gross margin for our testing operations was 38%, up by 3

       percentage points year-over-year and up by 1 percentage point

       sequentially.

    -- Capital spending on our testing operations amounted to US$56 million

       during the quarter.

    -- As of June 30, 2008, there were 1,622 testers in operations.  130

       testers were added, of which 52 testers were obtained from the

       acquisition of ASE Weihai Inc. and 63 testers were disposed of during

       the quarter.



    Substrate Operations

    -- PBGA substrate manufactured by ASE amounted to NT$2,161 million for the

       quarter, up by NT$114 million or 6% from a year-ago quarter, and up by

       NT$93 million or 5% from the previous quarter.  Of the total output of

       NT$2,161 million, NT$475 million was from sales to external customers.

    -- Gross margin for substrate operations was 15% during the quarter, down

       by 6 percentage points from a year ago quarter and unchanged from the

       previous quarter.

    -- In 2Q08, the Company's internal substrate manufacturing operations

       supplied 58% (by value) of our total substrate requirements.

    -- As of June 30, 2008, the Company's PBGA capacity was at 52 million

       units per month.



    Customers

    -- Our five largest customers together accounted for approximately 28% of

       our total net revenues in 2Q08, compared to 27% in 2Q07 and in 1Q08.

       No single customer accounted for more than 10% of our total net

       revenues.

    -- Our top 10 customers contributed 46% of our total net revenues during

       the quarter, compared to 44% in 2Q07 and 1Q08.

    -- Our customers that are integrated device manufacturers, or IDMs,

       accounted for 40% of our total net revenues during the quarter,

       compared to 39% in 2Q07 and 42% in 1Q08.

    About ASE, Inc.



    ASE, Inc. is the world's largest independent provider of IC packaging

services and, together with its subsidiary ASE Test Limited, the world's

largest independent provider of IC testing services, including front-end

engineering testing, wafer probing and final testing services. ASE, Inc.'s

international customer base of more than 200 customers includes such

leading names as ATI Technologies Inc., CSR plc, Freescale Semiconductor,

Inc., MediaTek Inc., NEC Corporation, NVIDIA Corporation, NXP

Semiconductors, Qualcomm Incorporated, RF Micro Devices Inc.,

STMicroelectronics N.V. and VIA Technologies, Inc. With advanced

technological capabilities and a global presence spanning Taiwan, Korea,

Japan, Singapore, Malaysia and the United States, ASE, Inc. has established

a reputation for reliable, high quality products and services. For more

information, visit our website at http://www.aseglobal.com .



    Safe Harbor Notice



    This press release contains "forward-looking statements" within the

meaning of Section 27A of the United States Securities Act of 1933, as

amended, and Section 21E of the United States Securities Exchange Act of

1934, as amended, including statements regarding our future results of

operations and business prospects. Although these forward-looking

statements, which may include statements regarding our future results of

operations, financial condition or business prospects, are based on our own

information and information from other sources we believe to be reliable,

you should not place undue reliance on these forward-looking statements,

which apply only as of the date of this press release. We were not involved

in the preparation of these projections. The words "anticipate", "believe",

"estimate", "expect", "intend", "plan" and similar expressions, as they

relate to us, are intended to identify these forward-looking statements in

this press release. Our actual results of operations, financial condition

or business prospects may differ materially from those expressed or implied

in these forward-looking statements for a variety of reasons, including

risks associated with cyclicality and market conditions in the

semiconductor industry; demand for the outsourced semiconductor packaging

and testing services we offer and for such outsourced services generally;

the highly competitive semiconductor industry; our ability to introduce new

packaging, interconnect materials and testing technologies in order to

remain competitive; international business activities; our business

strategy; our future expansion plans and capital expenditures; the strained

relationship between the ROC and the PRC; general economic and political

conditions; possible disruptions in commercial activities caused by natural

or human-induced disasters; fluctuations in foreign currency exchange

rates; and other factors. For a discussion of these risks and other

factors, please see the documents we file from time to time with the

Securities and Exchange Commission, including our 2007 Annual Report on

Form 20-F filed on June 30, 2008, as amended.






    -- Tables to Follow --







    Supplemental Financial Information



    Consolidated Operations



    Amounts in NT$ Millions             2Q/08         1Q/08          2Q/07



    Net Revenues                       25,610        24,695         23,362

    Revenues by End Application

    Communication                         45%           45%            46%

    Computer                              24%           25%            22%

    Automotive and Consumers              31%           30%            32%

    Others                                 0%            0%             0%



    Revenues by Region

    North America                         50%           50%            48%

    Europe                                 9%           11%            12%

    Taiwan                                21%           23%            23%

    Japan                                  9%            8%             9%

    Other Asia                            11%            8%             8%



    IC Packaging Services



    Amounts in NT$ Millions             2Q/08         1Q/08          2Q/07



    Net Revenues                       20,033        19,227         18,029

    Revenues by Packaging Type

    Advanced substrate &

    leadframe based                       84%           84%            85%

    Traditional leadframe based            4%            4%             5%

    Module assembly                        4%            5%             6%

    Others                                 8%            7%             4%



    Capacity

    CapEx (US$ Millions)*                  71            78             49

    Number of Wirebonders               8,426         8,126          7,040



    Testing Services



    Amounts in NT$ Millions             2Q/08         1Q/08          2Q/07



    Net Revenues                        5,102         4,895          4,724

    Revenues by Testing Type

    Final test                            77%           77%            76%

    Wafer sort                            20%           19%            20%

    Engineering test                       3%            4%             4%



    Capacity

    CapEx (US$ Millions)*                  56            44             20

    Number of Testers                   1,622         1,555          1,385



    * Capital expenditure amounts exclude building construction costs.







                   Advanced Semiconductor Engineering, Inc.

                Summary of Consolidated Income Statements Data

                   (In NT$ millions, except per share data)

                                 (Unaudited)





                          For the three months ended      For the period ended



                           Jun. 30    Mar. 31    Jun. 30    Jun. 30    Jun. 30

                             2008      2008       2007       2008        2007

    Net revenues:

     IC Packaging            20,033    19,227     18,029    39,260     34,312

     Testing                  5,102     4,895      4,724     9,997      9,049

     Others                     475       573        609     1,048      1,094

    Total net revenues       25,610    24,695     23,362    50,305     44,455



    Cost of revenues         19,098    18,507     16,958    37,605     33,055

    Gross profit              6,512     6,188      6,404    12,700     11,400



    Operating expenses:

     Research and

      development               980     1,096        720     2,076      1,409

     Selling, general and

      administrative          1,948     1,740      1,795     3,688      3,332

     Total operating

      expenses                2,928     2,836      2,515     5,764      4,741

    Operating income          3,584     3,352      3,889     6,936      6,659



    Net non-operating

     (income) expenses:

     Interest expenses --

      net                       268       275        306       543        659

     Foreign exchange gain     (294)     (301)      (147)     (595)      (165)

     Gain on long-term

      investment                (28)     (104)       (65)     (133)      (141)

     Others                      76       199        198       276        439

     Total non-operating

      expenses                   22        69        292        91        792

    Income before tax         3,562     3,283      3,597     6,845      5,867



    Income tax expense          779       411        866     1,191      1,185

    Income from continuing

     operations and before

     minor interest           2,783     2,872      2,731     5,654      4,682



    Minority interest           371       535        156       906        446



    Net income                2,412     2,337      2,575     4,748      4,236



    Per share data:

    Earnings (loss) per

     share

     --Basic                NT$0.46   NT$0.44    NT$0.50   NT$0.90    NT$0.82



     --Diluted              NT$0.44   NT$0.43    NT$0.48   NT$0.86    NT$0.79





    Earnings (loss) per

     equivalent ADS

     --Basic               US$0.075  US$0.070   US$0.075   US$0.146  US$0.125



     --Diluted             US$0.072  US$0.067   US$0.073   US$0.138  US$0.120





    Number of weighted

     average shares used

     in diluted EPS

     calculation

     (in thousands)       5,494,052 5,460,822  5,433,905  5,479,984 5,463,437



    Exchange rate

     (NT$ per US$1)           30.36     31.74      33.11      31.05     32.94







                   Advanced Semiconductor Engineering, Inc.

                  Summary of Consolidated Balance Sheet Data

                              (In NT$ millions)

                                 (Unaudited)





                                            As of Jun. 30,    As of Mar. 31,

                                                    2008              2008



    Current assets:

     Cash and cash equivalents                     23,305            16,589

     Financial assets -- current                    9,343            12,538

     Notes and accounts receivable                 17,633            16,994

     Inventories                                    5,598             5,439

     Others                                         3,232             4,312

     Total current assets                          59,111            55,872



    Financial assets -- non current                 4,568             4,818

    Properties -- net                              83,209            81,297

    Others                                         17,432             9,118

    Total assets                                  164,320           151,105



    Current liabilities:

     Short-term debts -- revolving credit          12,456            10,573

     Short-term debts -- current portion of

      long-term debts                               6,162             6,060



     Short-term debts -- current portion of

      bonds payable                                 1,375             1,375

     Notes and accounts payable                     8,339             7,762

     Others                                        19,492             9,785

     Total current liabilities                     47,824            35,555



    Long-term debts                                40,663            16,602

    Long-term bonds payable                         4,031             4,184

    Other liabilities                               2,808             2,949

    Total liabilities                              95,326            59,290



    Minority interest                               2,980            14,958



    Shareholders' equity                           66,014            76,857

    Total liabilities & shareholders' equity      164,320           151,105





    Current Ratio                                    1.24              1.57

    Net Debt to Equity                               0.57              0.11







    Contact:



     ASE, Inc.

     Joseph Tung, CFO or Vice President

     Freddie Liu, Vice President

     Allen Kan, Manager

     Tel:     +886-2-8780-5489

     Fax:     +886-2-2757-6121

     Email:   [email protected]

     Website: http://www.aseglobal.com



     US contact:



     Clare Lin, Director

     Tel:   +1-408-986-6524

     Email: [email protected]