TAIPEI, Taiwan, June 28 /Xinhua-PRNewswire-FirstCall/ -- ASE Test Limited (Nasdaq: ASTSF; TAIEX: 9101) (hereinafter "ASE Test", or the "Company") today announced that a final settlement amount has been reached between ASE Test, its parent, Advanced Semiconductor Engineering, Inc. (hereinafter "ASE, Inc. "), and the 9 insurers under its Fire Insurance Policy, who together acted as co-insurers, with regards to the fire damage incurred to ASE, Inc.'s Chung-Li plants on May 1, 2005, including damage incurred by ASE Test in connection with its operations at Chung-Li. The 9 co-insurers are Zurich Insurance (Taiwan) Ltd., Fubon Insurance Co., Ltd., Cathay Century Insurance Co., Ltd., Shinkong Insurance Co., Ltd., Mingtai Fire & Marine Insurance Co., Ltd., The First Insurance Co., Ltd., Taiwan Fire & Marine Insurance Co., Ltd., Chung Kuo Insurance Co., Ltd. and South China Insurance Co., Ltd. (hereinafter collectively, the "Co-Insurers"). The final settlement amount with respect to damages incurred by ASE Test as a result of the fire, after subtracting the deductible amount from the total insured loss as provided for under the Fire Insurance Policy, is NT$850 million (US$26 million). The Co-Insurers already paid an interim payment in the amount of NT$12 million (US$0.4 million) in mid-October 2005 with respect to damages incurred by ASE Test. This interim payment will be deducted from the final settlement amount and the Co-Insurers will pay a final payment of NT$838 million (US$25.6 million) with respect to damages incurred by ASE Test in accordance with the provisions of the Fire Insurance Policy. ASE Test, ASE, Inc. and the Co-Insurers executed a settlement agreement on June 27, 2006 pursuant to the Fire Insurance Policy. The final settlement amount and the final payment with respect to the damages incurred by ASE Test as a result of the fire represent a portion the total settlement reached by ASE, Inc. in connection with the fire. ASE Inc.'s total final settlement amount in connection with the fire accident in Chung-Li, after subtracting the deductible amount from the total insured loss as provided for under the Fire Insurance Policy, is NT$8,068 million (US$247 million). As the settlement amount is now finalized, the Company expects to recognize approximately NT$820 million (US$25 million) of non-operating income in the second quarter of 2006. The Company is still in the process of repairing certain assets damaged by the fire and determining how much of the losses originally recognized in connection with the fire will be reversed as a result of such repairs. The Company will announce the impact to its earnings when it reports its 2Q06 consolidated financial results, which is scheduled for August 2, 2006. Safe Harbor Notice This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, 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 annual report. 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 annual report. 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 testing and packaging services we offer and for such outsourced services generally; the highly competitive semiconductor industry; our ability to introduce new testing technologies in order to remain competitive; our ability to maintain a high capacity utilization rate relative to our fixed costs; international business activities; our business strategy; our future expansion plans and capital expenditures; the strained relationship between the ROC and the People's Republic of China, or the PRC; general economic and political conditions; possible disruptions in commercial activities caused by natural and 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 2005 Annual Report on Form 20-F filed on June 19, 2006. CONTACT: Freddie Liu, Chief Financial Officer Asia Tel: +886-2-8780-5489 Email: US IR Contact: Ken Hsiang, President, ISE Labs, Inc. Tel: +1-510-687-2475 Email: DATASOURCE: ASE Test Limited CONTACT: Freddie Liu of ASE Test Limited, +886-2-8780-5489, or ; or Ken Hsiang of ISE Labs, Inc., +1-510-687-2475, or

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