Stats Chippac Malaysia Sdn. Bhd., et al. – ‘424B1’ on 1/22/02

On:  Tuesday, 1/22/02   ·   Accession #:  898430-2-213   ·   File #s:  333-69704, -01, -02, -03, -04, -05, -06, -07

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Prospectus   —   Rule 424(b)(1)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Final Prospectus                                      66    305K 

Document Table of Contents

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                                                FILED PURSUANT TO RULE 424(b)(1)
                                                      REGISTRATION NO. 333-69704

 [LOGO OF ChipPac]

$15,000,000 12 3/4% Senior Subordinated Notes Due 2009  

Unconditionally guaranteed on a senior subordinated basis by  

ChipPAC, Inc. 

ChipPAC Liquidity Management Hungary Limited Liability Company  

ChipPAC Luxembourg S.a.R.L. 

ChipPAC Korea Company Ltd.  

ChipPAC Limited 

ChipPAC (Barbados) Ltd. 
ChipPAC Malaysia Sdn. Bhd.  

  This prospectus covers $15,000,000 aggregate principal amount of our 12 3/4%
senior subordinated notes due 2009 which we issued on June 22, 2001 in a        
private placement and which may be offered and sold from time to time by the    
selling security holder, CVC Capital Funding, LLC. We will receive no part of   
the proceeds of the sales of the securities in this offering.                   

We will pay interest on the notes on each August and February 1. We may   
redeem the notes on and after August 1, 2004. There is no sinking fund for the  
notes. The notes are subordinated in right of payment to all existing and       
future senior indebtedness of ChipPAC, of which there was $147.0 million        
outstanding as of September 30, 2001.                                           

  The notes are eligible for trading in The PORTAL Market, a subsidiary of The
Nasdaq Stock Market, Inc.                                                       

 Investing in the notes involves risks. See "Risk Factors" beginning on page
4.                                                                              

The date of this prospectus is January 18, 2002.  

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                            Page
                                                            ----
                                                                
ABOUT THIS PROSPECTUS......................................   1 

OUR COMPANY................................................   1 

RECENT DEVELOPMENTS........................................   2 

RISK FACTORS...............................................   4 

FORWARD-LOOKING STATEMENTS.................................  15 

RATIO OF EARNINGS TO FIXED CHARGES.........................  16 

USE OF PROCEEDS............................................  16 

SELLING SECURITY HOLDER....................................  17 

PLAN OF DISTRIBUTION.......................................  18 

DESCRIPTION OF NOTES.......................................  20 

LEGAL MATTERS..............................................  62 

EXPERTS....................................................  62 

INCORPORATION BY REFERENCE.................................  63 

WHERE YOU CAN FIND MORE INFORMATION........................  63 

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ABOUT THIS PROSPECTUS 

This prospectus is a part of the registration statement that we filed with
the Securities and Exchange Commission, or SEC. The selling security holders    
named in this prospectus may from time to time sell the securities described in 
this prospectus. You should read this prospectus together with additional       
information described below under the next headings "Where You Can Find More    
Information" and "Incorporation by Reference."                                  

You should rely only on the information contained in this prospectus. We  
have not authorized anyone to provide you with information different from that  
contained in this prospectus. This prospectus is not an offer to sell these     
securities and it is not soliciting an offer to buy these securities in any     
state where the offer of sale is not permitted. The information contained in    
this prospectus is accurate only as of the date of this prospectus, regardless  
of the time of delivery of this prospectus or any sale of the securities. In    
this prospectus, the "company," "ChipPAC," "we," "us" and "our" refer to        
ChipPAC, Inc. Our principal executive offices are located at 47400 Kato Road,   
Fremont, California, 94538, and our telephone number is (510) 979-8000.         

OUR COMPANY 

 ChipPAC is one of the world's largest providers of semiconductor packaging,
test, and distribution services. We offer a full portfolio of leaded integrated 
circuit, or IC, laminate and power packaging to leading semiconductor companies 
that service the computing, communications and multi-application end markets.   
We are a leader in providing high end packaging solutions, including ball grid  
array packages, or BGA packages, the most advanced type of mass produced        
package. We are the largest semiconductor packaging and test service provider   
in mainland China. As consumers demand smaller form factors with more           
functionality, there is a greater requirement for power regulation and          
generation, which should drive demand for our power devices. We also provide    
advanced packaging products that address the needs of semiconductors used in    
wireless communications applications, including flip-chip, chip-scale and       
stacked die technologies.                                                       

Outsourcing of packaging and test services to independent packagers like  
ChipPAC continues to expand due to several factors, including time-to-market    
pressures, cost reduction, resource allocation, equipment utilization, the      
increased technological complexity of packaging, and the growth of fabless      
semiconductor manufacturers. Historically, outsourced semiconductor             
manufacturing services have grown faster than the semiconductor market.         
According to Electronic Trend Publications, outsourcing for high-end package    
solutions such as BGA and chip-scale packages or CSP, is forecasted to grow at  
a compounded annual rate of 38.8% from 2000 to 2005.                            

Our headquarters are located in Fremont, California and our manufacturing 
facilities are strategically located in South Korea, China and Malaysia to      
address the needs of our customers. We also have design centers in Arizona and  
South Korea to provide 24-hour support to our customers.                        

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RECENT DEVELOPMENTS 

 We expect revenue of approximately $76.5 million for the three months ended
December 31, 2001, which represents an increase from our revenue of $74.6       
million for the three months ended September 30, 2001. We expect to report an   
adjusted net loss for the three months ended December 31, 2001 of $(0.22) per   
share, as compared to an actual loss of $(0.24) per share for the three months  
ended September 30, 2001. The loss for the three months ended December 31, 2001 
excludes previously announced planned restructuring, one-time charges, and an   
asset write down. We expect the one-time charges and restructuring charges to   
be approximately $3.0 million and the asset write down to be between $30.0      
million and $35.0 million.                                                      

The asset write down relates primarily to our manufacturing assets in our 
assembly and test facilities in South Korea and Malaysia. We determined that    
due to excess capacity, the future expected cash flows related to equipment for 
certain package types will not be sufficient to recover the carrying value of   
the manufacturing equipment for those package types in those facilities. The    
carrying values of these assets were written down to our estimate of fair       
market value and will continue to be depreciated over their remaining useful    
lives.                                                                          
The weakness in demand for packaging and test services as a result of the 
current downturn in the semiconductor industry has and is expected to continue  
to adversely affect our cash flow from operations. We believe that our existing 
cash balances, cash flows from operations, available equipment lease financing  
and available borrowings under our senior credit facilities provide sufficient  
cash resources to meet our projected operating and other cash requirements for  
the next twelve months.                                                         

We have signed an amendment to our senior credit facilities pursuant to   
which, among other things, our senior lenders waived compliance with our        
financial covenants until December 31, 2002 and replaced those covenants with   
new covenants that apply for the year ended December 31, 2002 which better      
reflect current conditions in the semiconductor industry. However, the          
amendment stipulates that we raise at least $20.0 million of net proceeds of    
permitted junior capital and prepay the outstanding senior credit facilities on 
or prior to March 1, 2002 in an aggregate principal amount equal to the greater 
of (i) $20.0 million and (ii) 50% of those net proceeds. If we do not complete  
an offering and repayment on or prior to March 1, 2002, the waiver expires on   
that date and we believe we would be in violation of the covenants regarding    
the minimum interest coverage ratio we must maintain and the maximum leverage   
ratio and the maximum senior leverage ratio we are permitted. If the            
transaction providing us with the net proceeds is a registered offering of      
securities and if the SEC reviews that offering, then we have until March 31,   
2002 to apply those net proceeds and obtain the benefits of the waiver by our   
senior lenders.                                                                 

The amendment to our senior credit facilities defines permitted junior    
capital as (1) our capital stock or (2) subordinated, unsecured indebtedness.   
However, permitted junior capital cannot require any scheduled payment of       
principal or return of capital prior to the maturity date of our 8% convertible 
subordinated notes due 2011. Furthermore, in the case of indebtedness, the      
subordination provisions and other non-pricing terms and conditions of the      
indebtedness that is to qualify as permitted junior capital can be no less      
favorable to us, our subsidiaries and our lenders under the senior credit       
facilities than the analogous provisions of the notes we are offering through   
this prospectus.                                                                

Should we fail to meet the requirements of the waiver by the expiration   
date, we expect to enter into negotiations with our senior lenders. We cannot   
assure that we will be able to raise the net proceeds on or prior to March 1,   
2002 (or March 31, 2002 in the event of an SEC review) or, if we do not raise   
these proceeds, that we will be in compliance with the existing covenants.      
Failure to comply with any of our existing covenants would constitute a default 
under the senior credit facilities. A default could cause a cross default under 
the indenture governing these notes, which in turn could cause a substantial    
majority of our aggregate indebtedness to become due and payable immediately.   
An event of default under any debt instrument, if not cured or waived, could    
have a material adverse effect on us. We may require capital sooner than        
currently expected.                                                             

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  We currently intend to raise all of the permitted junior capital required by
our recent senior credit facility amendment through the issuance of             
approximately 8,000,000 shares of our Class A common stock pursuant to a        
registration statement filed with the SEC. We cannot assure you that the common 
stock offering will be successful or that additional financing will be          
available when we need it or, if available, that it will be available on        
satisfactory terms. In addition, the terms of our senior credit facilities and  
these notes significantly reduce our ability to incur additional debt. Failure  
to obtain any required additional financing could have a material adverse       
effect on our company.                                                          

See "If we have not raised at least $20.0 million of net proceeds from the
issuance of permitted junior capital and pre-paid the outstanding senior credit 
facilities with at least this amount, we will be in violation of our existing   
senior credit facilities" and "The senior revolving credit facility and the     
indenture governing the notes impose limitations on how we conduct our          
business; as a result, we may not be able to pursue strategies that could be in 
the best interest of holders of the notes" on pages 3, 4 and 5 of "Risk         
Factors."                                                                       

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RISK FACTORS  

  You should carefully consider the following factors in addition to the other
information set forth in this document in analyzing an investment in ChipPAC.   
We believe that the risks and uncertainties described below are the current     
material risks facing us. If any of the following risks actually occur, our     
business, financial condition or results of operations will likely suffer. In   
that case, the trading price of our publicly traded stock or notes could fall,  
and you may lose all or part of the money you invested.                         

If we have not raised at least $20.0 million of net proceeds from the issuance  
of permitted junior capital and prepaid the outstanding senior credit           
facilities with at least this amount, we will be in violation of our existing   
senior credit facilities.                                                       

The weakness in demand for packaging and test services as a result of the 
current downturn in the semiconductor industry has and is expected to continue  
to adversely affect our cash flow from operations. We believe that our existing 
cash balances, cash flows from operations, available equipment lease financing  
and available borrowings under our senior credit facilities provide sufficient  
cash resources to meet our projected operating and other cash requirements for  
the next twelve months.                                                         

We have signed an amendment to our senior credit facilities pursuant to   
which, among other things, our senior lenders waived compliance with our        
financial covenants until December 31, 2002 and replaced those covenants with   
new covenants that apply for the year ended December 31, 2002 which better      
reflect current conditions in the semiconductor industry. However, the          
amendment stipulates that we raise at least $20.0 million of net proceeds of    
permitted junior capital and prepay the outstanding senior credit facilities on 
or prior to March 1, 2002 in an aggregate principal amount equal to the greater 
of (i) $20.0 million and (ii) 50% of those net proceeds. If we do not complete  
an offering and repayment on or prior to March 1, 2002, the waiver expires on   
that date and we believe we would be in violation of the covenants regarding    
the minimum interest coverage ratio we must maintain and the maximum leverage   
ratio and the maximum senior leverage ratio we are permitted. If the            
transaction providing us with the net proceeds is a registered offering of      
securities and if the SEC reviews that offering, then we have until March 31,   
2002 to apply those net proceeds and obtain the benefits of the waiver by our   
senior lenders.                                                                 

Should we fail to meet the requirements of the waiver by the expiration   
date, we expect to enter into negotiations with our senior lenders. We cannot   
assure that we will be able to raise the net proceeds on or prior to March 1,   
2002 (or March 31, 2002 in the event of an SEC review) or, if we do not raise   
these proceeds, that we will be in compliance with the existing covenants.      
Failure to comply with any of our existing covenants would constitute a default 
under the senior credit facilities. A default could cause a cross default under 
the indenture governing these notes, which in turn could cause a substantial    
majority of our aggregate indebtedness to become due and payable immediately.   
An event of default under any debt instrument, if not cured or waived, could    
have a material adverse effect on us. We may require capital sooner than        
currently expected.                                                             

We cannot assure you that additional financing will be available when we  
need it or, if available, that it will be available on satisfactory terms. In   
addition, the terms of our senior credit facilities and these notes             
significantly reduce our ability to incur additional debt. Failure to obtain    
any required additional financing could have a material adverse effect on our   
company.                                                                        

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Risks to Noteholders  

Our substantial indebtedness could adversely affect our financial health, make  
us vulnerable to adverse economic and industry conditions and prevent us from   
fulfilling our obligations under our outstanding, publicly-traded notes.        

As of September 30, 2001, our total indebtedness was $362.0 million,      
including $165.0 million aggregate principal amount of the notes (which         
includes $15.0 million of the notes being offered). Our substantial             
indebtedness could have important consequences to you. For example, it could:   

.  make it more difficult for us to satisfy our obligations relating to the 
notes;                                                                

.  increase our vulnerability to general adverse economic and industry      
 conditions by limiting our flexibility in planning for, or reacting to,
changes in our business and the industry in which we operate;         

.  require us to dedicate a substantial portion of our cash flow from       
    operations to payments on our indebtedness, thus reducing the availability
  of our cash flow to fund working capital, capital expenditures, research
and development efforts and other general corporate purposes;         

.  place us at a competitive disadvantage relative to our competitors that  
have less debt; and                                                   

.  limit, along with the financial and other restrictive covenants in our   
    indebtedness, our ability to borrow additional funds. Furthermore, failing
   to comply with those covenants could result in an event of default which,
if not cured or waived, could have a material adverse effect on our   
ability to increase our revenues and profitability and meet our growth
objectives.                                                           

Despite our current levels of indebtedness, we still may be able to incur       
substantially more debt which could increase the risks created by our           
substantial indebtedness.                                                       

We may be able to incur substantial additional indebtedness in the future.
For example, we have the ability to increase our revolving line of credit by    
$25.0 million without further consent from our existing lenders. Our senior     
credit provides for revolving loans up to $50.0 million, including letters of   
credit. Additionally, the indenture for these notes permits us to incur         
additional indebtedness if we meet a test measuring our cash flow relative to   
our required interest payments. This indenture also allows us to incur debt     
under our senior credit facility. The indenture for our convertible             
subordinated notes does not limit our ability to incur additional indebtedness. 
All of the borrowings under our senior credit facility are secured by all of    
our assets and those of our subsidiaries, except those of our Chinese operating 
subsidiary. The addition of new debt to our current debt levels could intensify 
the debt-related risks that we now face that are described above.               

 ChipPAC International Company Limited or ChipPAC International will rely on
intercompany loans through its direct and indirect subsidiaries to satisfy      
obligations of its indebtedness; as a result, if these subsidiaries are not     
able to make payments on these intercompany loans, we may not be able to pay    
our noteholders interest on the notes when due.                                 

The only source of cash for ChipPAC International to pay principal and    
interest on the notes will be through payments of interest and principal on     
intercompany notes, capital contributions from the parent company or dividends  
or distributions from ChipPAC International's subsidiaries, which dividends or  
distributions would be funded through payments on intercompany notes. We will   
rely principally on funds generated by ChipPAC International's operating        
subsidiaries to fund payments on the notes and other indebtedness. If these     
subsidiaries are unable to make payments on their intercompany loans, we may    
not be able to satisfy obligations under our debt instruments, including        
payment of interest on the senior revolving credit facility and the notes.      

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Our ability to pay our obligations under the notes may be reduced because       
ChipPAC International's Chinese operating subsidiaries, which hold 26.0% of our 
consolidated assets and generated 17.5% of our consolidated revenues for the    
nine months ended September 30, 2001, are not guarantors of the notes.          

Our Chinese subsidiaries are not guarantors of the notes. For the nine    
months ended September 30, 2001, the total revenues for our Chinese             
subsidiaries were $44.1 million, representing approximately 17.5% of our        
consolidated revenues. The combined fixed assets for our Chinese subsidiaries   
at September 30, 2001 were approximately $158.3 million, representing           
approximately 26.0% of our consolidated assets.                                 

Claims of creditors of our Chinese operating subsidiaries, including trade
creditors, secured creditors and creditors holding indebtedness or guaranties   
issued by these subsidiaries, will generally have priority on the assets and    
earnings of these subsidiaries, over the claims of creditors of our company,    
including holders of our notes, even if the obligations of our Chinese          
operating subsidiaries do not constitute senior indebtedness. Since the         
company's Chinese subsidiaries will not guarantee the notes, holders of the     
notes will have to rely solely on dividends or distributions from the company's 
Korean, Malaysian and British Virgin Islands subsidiaries to satisfy their      
respective obligations under the notes should the company's Chinese             
subsidiaries be unable to make dividends or distributions.                      

The senior revolving credit facility and the indenture governing the notes      
impose limitations on how we conduct our business; as a result, we may not be   
able to pursue strategies that could be in the best interests of holders of the 
notes.                                                                          

The senior revolving credit facility and the indenture governing the notes
contain restrictions on us that could increase our vulnerability to general     
adverse economic and industry conditions by limiting our flexibility in         
planning for and reacting to changes in our business and industry.              
Specifically, these restrictions limit our ability to:                          

.  incur additional debt;                                                   

.  pay dividends and make other distributions;                              

.  prepay subordinated debt;                                                

.  make investments and other restricted payments;                          

.  enter into sale and leaseback transactions;                              

.  create liens;                                                            

.  sell assets;                                                             

.  enter into transactions with affiliates; and                             

.  consolidate or merge.                                                    

Our senior credit facility contains financial covenants that require us to
meet specified financial tests, including, without limitation, a minimum        
interest coverage ratio, a maximum leverage ratio, a maximum consolidated       
capital expenditure amount, a minimum fixed charge coverage ratio, a maximum    
senior leverage ratio and a minimum consolidated adjusted EBITDA amount. As a   
result of these restrictions, we may not be able to pursue business strategies  
that could be in the best interests of holders of our notes. In our most recent 
bank amendment, our senior lenders have waived compliance with the minimum      
interest coverage ratio, the maximum leverage ratio and the maximum senior      
leverage ratio from December 31, 2001 to and including December 31, 2002 and    
replaced those covenants with new covenants that apply for the year ended       
December 31, 2002 which better reflect current conditions in the semiconductor  
industry. In a prior bank amendment, our senior lenders have also waived        
compliance with the minimum fixed charge coverage ratio for the calculation     
periods ending during the period commencing on and including September 30, 2001 
and ending on and including December 31, 2002.                                  

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 The covenants waived for 2002 under the most recent bank amendment include:
(1) the minimum interest coverage ratio of 1.6 to 1.0 through March 31, 2002,   
1.75 to 1.0 through June 30, 2002 and 1.85 to 1.0 through December 31, 2002;    
(2) the maximum leverage ratio of 5.0 to 1.0 through June 30, 2002 and 4.5 to   
1.0 through December 31, 2002; and (3) the maximum senior leverage ratio of 2.5 
to 1.0 through December 31, 2002. These three covenants were waived under the   
current amendment and replaced for 2002 with (1) a minimum consolidated         
adjustable EBITDA amount of $30.0 million, $26.0 million, $32.0 million and     
$40.0 million for the twelve months ended March 31, June 30, September 30 and   
December 31, 2002, respectively, and (2) a new maximum capital expenditure      
amount of $30.0 million. Pursuant to a prior amendment, the minimum fixed       
charge coverage ratio of 1.05 to 1.0 was waived through December 31,2002.       

At September 30, 2001, we were in compliance with all of our financial    
covenants, except the minimum fixed charge coverage ratio whose compliance was  
waived. In addition, at September 30, 2001, our interest coverage ratio was     
1.83 to 1.0; our leverage ratio was 4.83 to 1.0; and our senior leverage ratio  
was 2.28 to 1.0. For the nine months ended September 30, 2001, our consolidated 
capital expenditures were approximately $33.7 million. While we were not        
required to maintain consolidated adjusted EBITDA for any periods ending on or  
prior to December 31, 2001, our consolidated adjusted EBITDA for the twelve     
months ended September 30, 2001 was $64.5 million.                              

 If we fail to comply with the restrictions in the senior credit facilities,
a default may also occur under the indenture governing these notes and any      
other financing agreements. This default may allow some creditors, if their     
respective agreements so provide, to accelerate payments owed on such debt as   
well as any other indebtedness as to which a cross-acceleration or              
cross-default provision applies. The creditors who may be entitled to           
accelerated payments in the event of a default are: (1) the holders of our      
12 3/4% senior subordinated notes issued in the aggregate principal amount of   
$165.0 million (which includes these notes being offered), under an indenture   
dated July 29, 1999 by and among us, ChipPAC International Company Limited, and 
Firstar Bank, N.A. as trustee; and (2) the senior credit facility lenders,      
including Credit Suisse First Boston, New York branch, BankBoston N.A.,         
State Street Bank and Trust Company, Balanced High-Yield Fund II Limited, CIBC  
Inc., First Source Financial LLP, Heller Financial, Inc., The First National    
Bank of Chicago and IBM Credit Corporation (the "senior facility lenders"),     
under our senior credit facility, dated as of August 5, 1999 by and among the   
us, ChipPAC International Company Limited, and Credit Suisse First Boston, New  
York branch, as the administrative agent, collateral agent and sole lead        
arranger for the Senior Facility Lenders. As of September 30, 2001, the         
aggregate principal amount of the senior credit facility was $168.6 million of  
which approximately $147.0 million was outstanding. In addition, our lenders    
may be able to terminate any commitments they had made to supply us with        
further funds. See "Description of Notes."                                      

We may not have the ability to raise the funds necessary to finance the change  
of control offer required by the indenture governing the notes.                 

If the company undergoes a change of control (as defined in the indenture 
governing the notes) we may need to refinance large amounts of our debt,        
including the notes and borrowings under the senior revolving credit facility.  
If a change of control occurs, we must offer to buy back the notes for a price  
equal to 100.0% of the principal amount of the notes, plus any accrued and      
unpaid interest. We cannot assure you that there will be sufficient funds       
available for us to make any required repurchases of the notes upon a change of 
control. In addition, our senior revolving credit facility will prohibit us     
from repurchasing the notes until we first repay the senior revolving credit    
facility in full. If we fail to repurchase the notes in that circumstance, we   
will go into default under both the indenture governing the notes and the       
senior revolving credit facility. Any future debt which we incur may also       
contain restrictions on repayment upon a change of control. If any change of    
control occurs, we cannot assure you that we will have sufficient funds to      
satisfy all of the company's debt obligations. These buyback requirements may   
also delay or make it harder for others to effect a change of control. However, 
certain other corporate events, such as leveraged recapitalizations that would  
increase our level of indebtedness, would not constitute a change of control    
under the indenture governing the notes.                                        

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Risks Related to Our Business 

Our operating results for the quarters ended September 30, 2001, June 30, 2001  
and March 31, 2001 declined significantly from the quarters ended September 30, 
2000, June 30, 2000 and March 31, 2000.                                         

Our gross margins, net income and operating income for the quarters ended 
September 30, 2001, June 30, 2001 and March 31, 2001 decreased as compared to   
our results in the quarters ended September 30, 2000, June 30, 2000 and         
March 31, 2000 as a result of a decline in our revenues. Our revenues for the   
quarters ended September 30, 2001, June 30, 2001 and March 31, 2001 were $74.7  
million, $87.4 million and $89.9 million, respectively, compared to $155.8      
million, $109.0 million and $97.5 million, respectively, in the same periods    
for 2000. The decline is attributable to the continued semiconductor industry   
demand slowdown and resulting inventory buildup caused by ongoing end market    
demand weakness. Our net loss has increased from $9.7 million and $9.4 million  
in the quarters ended March 31, 2001 and June 30, 2001, respectively, to $16.4  
million in the quarter ended September 30, 2001. In addition to the effect of   
the decline in operating income, net income was further reduced in the third    
quarter of 2001 compared to the other quarters by the change in the effective   
tax rate from 20.0% to 0%. We cannot assure you that our business will not      
continue to decline or that our performance will improve.                       

We may not be able to continue to implement our cost saving strategy. Even if   
we do, it may not reduce our operating expenses by as much as we anticipated    
and could even compromise the development of our business.                      

In response to the recent weakness in demand for semiconductors, we       
implemented cost saving measures, including significant reduction in our        
workforce, furloughs, reduced work shift schedules, reductions in discretionary 
spending, reduced materials cost and lower capital expenditures and redesign of 
our manufacturing processes to improve productivity.                            

As a result of these cost saving measures, we have incurred approximately 
$3.0 million in restructuring charges during the nine months ended September    
30, 2001. Additionally, we expect there to be approximately $3.0 million in     
charges in the three months ended December 31, 2001. However, we cannot assure  
you that these cost saving measures will increase productivity nor that the     
expected net savings will occur during this period or at any other time in the  
expected amounts, if at all. In fact, our cost saving measures could adversely  
affect our revenue, as it could create inefficiencies in our business           
operations, result in labor disruptions and limit our ability to expand and     
grow our business.                                                              

The cyclicality of the semiconductor industry could adversely affect our        
operating results.                                                              

Our operations are substantially affected by market conditions in the     
semiconductor industry, which is highly cyclical and, at various times, has     
experienced significant economic downturns characterized by reduced product     
demand and production overcapacity which can result in rapid erosion of average 
selling prices. At the end of 2000, we experienced a general slowdown in the    
semiconductor industry. Beginning in 1997 and continuing through the beginning  
of 1999, we experienced particularly intense competition and a general slowdown 
in the semiconductor industry.                                                  

In addition, we increase our level of operating expenses and investment in
packaging services capacity based on customer demand forecast(s) and            
anticipated revenue growth. If our revenues do not grow as anticipated or the   
forecasts upon which we rely are inaccurate, and we are unable to decrease      
these expenses, our operating income would decrease.                            

Our profitability is affected by average selling prices which tend to decline.  

Decreases in the average selling prices of our packaging and test services
can have a material adverse effect on our profitability. The average selling    
prices of packaging and test services have declined historically, with          

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packaging services in particular experiencing severe pricing pressure. This     
pricing pressure for packaging and test services is likely to continue. Our     
ability to maintain or increase our profitability will continue to be           
dependent, in large part, upon our ability to offset decreases in average       
selling prices by improving production efficiency, increasing unit volumes      
packaged or tested, or by shifting to higher margin packaging and test          
services. If we are unable to do so, our business, financial condition and      
results of operations could be materially and adversely affected.               

If we are unable to develop and market new technologies, we may not remain      
competitive within the semiconductor packaging industry.                        

The semiconductor packaging and test industry is characterized by rapid   
increases in the diversity and complexity of packaging services. As a result,   
we expect that we will need to continually introduce more advanced package      
designs in order to respond to competitive industry conditions and customer     
requirements. The requirement to develop, license and maintain advanced         
packaging capabilities and equipment could require significant research and     
development and capital expenditures in future years. Any failure by us to      
achieve advances in package design or to obtain access to advanced package      
designs developed by others could reduce our growth prospects and operating     
income.                                                                         

The intensity of competition in our industry could result in the loss of our    
customers, which could adversely affect our revenues and profits.               

We face substantial competition from a number of established independent  
packaging companies and with the internal capabilities of many of our largest   
customers. Amkor Technology is our dominant competitor, and Advanced            
Semiconductor Engineering Group and Siliconware Precision Industries Co., Ltd.  
are the other companies that offer a broad range of packages and services that  
compete with ours. Other than Amkor, the listed companies only compete in some  
package types or for some test services. We compete based on breadth of         
service, quality, and price. We offer a broad portfolio of assembly and test    
services compared to all but the largest of our competitors. We offer           
approximately the same types of services as our largest competitors and our     
service offerings in power packaging is not shared with our largest             
competitors. Prices are set by the market and the ability to deliver profitable 
service at market prices is key. Each of our primary competitors has            
significant operational capacity, financial resources, research and development 
operations, and established relationships with many large semiconductor         
companies, which are current or potential customers of ours. Furthermore, our   
competitors may in the future capture our existing or potential customers       
through superior responsiveness, service quality, product design, technical     
competence or other factors, which we view as principal elements of competition 
in our industry. In addition, our primary customers may, in the future, shift   
more of their packaging and test service demand internally. As a result, we may 
have reduced revenues and profits.                                              

Our research and development efforts may not yield profitable and commercially  
viable services; thus, we may have significant short-term research and          
development expenses, which will not necessarily result in increases in revenue.

Our research and development efforts may not yield commercially viable    
packages or test services. The qualification process for new customers is       
conducted in various stages which may take one or more years to complete, and   
during each stage there is a substantial risk that we will have to abandon a    
potential package or test service which is no longer marketable and in which we 
have invested significant resources. In the event we are able to qualify new    
packages, a significant amount of time will have elapsed between our investment 
in new packages and the receipt of any related revenues.                        

We could lose customers, and thus revenue, if we cannot maintain the quality of 
our services.                                                                   

The semiconductor packaging process is complex and involves a number of   
precise steps. Defective packaging can result from a number of factors,         
including the level of contaminants in the operational                          

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environment, human error, equipment malfunction, use of defective materials and 
plating services and inadequate sample testing. From time to time, we expect to 
experience lower than anticipated yields as a result of these factors,          
particularly in connection with any expansion of capacity or change in          
processing steps. In addition, our yield on new packaging could be lower during 
the period necessary for us to develop the requisite expertise and experience   
with these processes. Any failure by us to maintain high quality standards or   
acceptable yields, if significant and sustained, could result in the loss of    
customers, delays in shipments, increased costs and cancellation of orders.     

 Our business may be adversely affected by the loss of, or reduced purchases
by, Atmel Corporation, Fairchild Semiconductor International, Inc., Intel       
Corporation, Intersil Corporation, LSI Logic Corporation, nVIDIA Corporation or 
any other large customer. Additionally, we may encounter difficulties in        
soliciting new customers.                                                       

For the nine months ended September 30, 2001, sales to our top five       
customers in the aggregate accounted for approximately 73.2% of total net       
revenues. During this same period, our three largest customers, Intersil,       
Intel, and LSI Logic, respectively, produced 21.2%, 18.8% and 14.5% of our      
sales revenues. If any of our main customers were to purchase significantly     
less of our services in the future, these decreased levels of purchases could,  
ultimately, harm our operating results.                                         

Semiconductor packaging companies must pass a lengthy and rigorous        
qualification process that can take up to six months at a cost to the customer  
of approximately $250,000 to $300,000. If we fail to qualify packages with      
potential customers or customers with which we have recently become qualified   
do not use our services, then our customer base could become more concentrated  
with a limited number of customers accounting for a significant portion of our  
revenues. Moreover, we believe that once a semiconductor company has selected a 
particular packaging and test foundry company's services, the semiconductor     
company generally relies on that vendor's packages for specific applications    
and, to the extent possible, subsequent generations of that vendor's packages.  
Accordingly, it may be difficult to achieve significant sales to a particular   
or potential customer once it selects another vendor's packaging services.      

Economic crisis in Asia where most of our suppliers are located could prevent   
us from securing adequate supplies of materials, which could, in turn, prevent  
us from meeting the requirements of our customers and result in a decrease in   
our revenues.                                                                   

  Most of our materials suppliers are located in Asia. Historically, over half
of our substrate costs were incurred from the purchase of materials from        
Japanese suppliers. In the future, we expect that a growing portion of these    
materials will be supplied by sources in South Korea and Taiwan. Several        
countries in this region have experienced currency devaluation and/or           
difficulties in financing short-term obligations. We cannot assure you that the 
effect of an economic crisis on our suppliers will not impact operations, or    
that the effect on our customers in that region will not adversely affect both  
the demand for our services and the collectibility of receivables.              

The failure of our vendors to supply sufficient quantities of materials on a    
timely basis could prevent us from fulfilling our customers' orders. In         
addition, we may not be able to pass on any unexpected increase in the cost of  
these materials to our customers.                                               

We obtain materials to fill orders for our packaging and test services    
directly from vendors. To maintain competitive packaging operations, we must    
obtain from our vendors, in a timely manner, sufficient quantities of           
acceptable materials at expected prices. We source most of our materials,       
including critical materials like laminate substrates, lead frames, mold        
compounds and gold wires, from a limited group of suppliers. We purchase all of 
our materials on a purchase order basis and have no long-term contracts with    
any suppliers. From time to time, vendors have extended lead times or limited   
the supply of required materials to us because of vendor capacity constraints   
and, consequently, we have experienced difficulty in obtaining acceptable       
materials                                                                       

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on a timely basis. Our business and results could be negatively impacted if our 
ability to obtain sufficient quantities of materials and other supplies in a    
timely manner were substantially diminished or if there were significant        
increases in the cost of materials that we could not pass on to our customers.  

If we are unable to obtain capital equipment in a timely manner, we may be      
unable to meet the increased demands of our customers which could result in a   
decrease in our revenues.                                                       

Our facilities currently have sufficient packaging and test services      
capacity to meet the current and expected demands of our customers.             
Nonetheless, in the event there are significant increases in overall            
semiconductor demand or demand for some of our products and services, we may    
not be able to meet those increased demands of our customers. Moreover, because 
the semiconductor packaging and test services business requires investment in   
expensive capital equipment and is characterized, from time to time, by intense 
demand, limited supply and long delivery cycles, we may not be able to readily  
increase our operating capacity. This would lead to a loss of sales of our      
packaging and test services, could ultimately lead to a loss in market share    
and have a negative impact on our results of operations.                        

We depend upon intellectual property and license critical technology from Hynix 
Semiconductor, Inc., Motorola, Inc., Tessera, Inc., LSI Logic and Intersil. To  
the extent these licenses are not perpetual and irrevocable, our net revenues   
could be materially adversely affected if our rights under these licenses       
expire or are terminated.                                                       

 We seek to protect our proprietary information and know-how through the use
of trade secrets, confidentiality agreements and other security measures. We    
may not obtain patent protection for the patent applications that we file, or   
if we are granted patents, those patents may not offer meaningful protection.   
Additionally, we cannot assure you that our competitors will not develop,       
patent or gain access to similar know-how and technology, or reverse engineer   
our packaging services, or that any confidentiality agreements upon which we    
rely to protect our trade secrets and other proprietary information will be     
adequate to protect our proprietary technology.                                 

Any patents and utility model, design right and computer program right    
registrations obtained relating to technology that we developed prior to our    
recapitalization are owned by Hynix Semiconductor, formerly Hyundai Electronics 
Inc. In connection with our recapitalization, we entered into a patent and      
technology license agreement by which Hynix Semiconductor granted us license to 
use specific intellectual property rights in our semiconductor packaging and    
test activities. We expect to seek patents and utility model, design right and  
computer program right registrations, as applicable, on new packaging process   
and package design technologies that we develop as a means of protecting        
technology and market position.                                                 

 We have a non-exclusive sublicense from Hynix Semiconductor to use patented
BGA technologies owned by Motorola, which expires on December 31, 2002.         
Motorola licenses these patents to others, including our competitors. After     
giving pro forma effect to the acquisition of the Malaysian business as if it   
had occurred at the beginning of 2000, these BGA technologies contributed 41.1% 
of our net revenues in 2000.                                                    

 We have a worldwide, royalty-bearing, non-exclusive license under specified
Tessera patents, technical information and trademarks relating to Tessera's     
proprietary IC packages. This license will expire sometime after February 2018. 

We also have two separate license agreements with LSI Logic under which we
have worldwide, royalty-bearing, non-exclusive licenses to use LSI packaging    
technology and technical information to manufacture, use and sell flip-chip     
semiconductor devices having at least 200 solder balls and semiconductor device 
assemblies having an overall height of less than 1.2 millimeters, respectively. 
The LSI Logic license relating to flip-chip semiconductor devices becomes       
perpetual and irrevocable upon our payment of fees or January 1, 2004,          
whichever occurs first. The other LSI Logic license is perpetual but may be     
terminated by LSI Logic in the event of our uncured breach or bankruptcy.       

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 In addition, we have a worldwide, royalty-free, non-exclusive license under
Intersil patents, copyrights and technical information which are used in or     
related to the operation of the Malaysian business. This Intersil license is    
perpetual and irrevocable. Any intellectual property rights in the bonding      
diagrams, test programs, maskworks and test boards uniquely related to the      
Intersil products for which we provide packaging and test services are licensed 
to us only for use in providing those services.                                 

To the extent these licenses are not perpetual and irrevocable, we may be 
unable to utilize the technologies under these licenses if they are not         
extended or otherwise renewed or if any of these licenses are terminated by the 
licensor due to our uncured breach or bankruptcy. Alternatively, if we are able 
to renew these arrangements, we cannot assure you that they will be on the same 
terms as currently exist. Any failure to extend or renew these license          
arrangements could cause us to incur substantial liabilities and to suspend the 
packaging services and processes that utilized these technologies.              

The loss of our skilled technical, marketing and sales personnel or our key     
executive officers could have a material adverse effect on our research and     
development, marketing and sales efforts.                                       

Our competitiveness will depend in large part upon whether we can attract 
and retain skilled technical, marketing and sales personnel and can retain      
members of our executive team. Competition for skilled personnel is intense,    
and we may not be successful in attracting and retaining the technical          
personnel or executive managers we require to develop new and enhanced          
packaging and test services and to continue to grow and operate profitably. If  
we cannot attract or retain skilled personnel, we may not be able to operate    
successfully in the future.                                                     

If we encounter future labor problems, we may fail to deliver our products in a 
timely manner which could adversely affect our revenues and profitability.      

 Our employees at our Ichon, South Korea facility are represented by ChipPAC
Korea Labor Union and are covered by collective bargaining and wage agreements. 
The collective bargaining agreement, which covers basic union activities,       
working conditions and welfare programs, among other things, is effective to    
May 1, 2003 and the wage agreement is effective to May 1, 2002. As of December  
31, 2001, approximately 78% of our employees were represented by the ChipPAC    
Korea Labor Union. In addition, one of our Chinese subsidiaries experienced     
labor protests and a two-day work stoppage in July 1998 in connection with      
proposed work force reductions. We cannot assure you that issues with the labor 
union or other employees will be resolved favorably for us in the future, that  
we will not experience significant work stoppages in future years or that we    
will not record significant charges related to those work stoppages. In         
addition, potential efficiency enhancement efforts, including personnel         
reductions, following our recent acquisition of the Malaysian business may      
create the risk of labor problems in Malaysia or at other facilities.           

New laws and regulations, currency devaluation and political instability in     
foreign countries, particularly in South Korea, China and Malaysia, could make  
it more difficult for us to operate successfully.                               

For the nine months ended September 30, 2001 and the years ended December 
31, 2000, 1999 and 1998, we generated approximately 10.7%, 16.7%, 11.3%, and    
7.2% of total revenues, respectively, from international markets, primarily     
from customers in Southeast Asia and Europe. In addition, all of the facilities 
currently used to provide our packaging services are located in South Korea,    
China and Malaysia. Moreover, many of our customers' operations are located in  
countries outside of the United States. We cannot determine if our future       
operations and earnings will be affected by new laws, new regulations, a        
volatile political climate, changes in or new interpretations of existing laws  
or regulations or other consequences of doing business outside the U.S.,        
particularly in South Korea, China and Malaysia. If future operations are       
negatively affected by these changes, our sales or profits may suffer.          

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Fluctuations in the exchange rate of the U.S. dollar and foreign currencies     
could have a material adverse effect on our financial performance and           
profitability.                                                                  

  A portion of our costs are denominated in foreign currencies, like the South
Korean Won, the Chinese Renminbi or RMB and the Malaysian Ringgit. As a result, 
changes in the exchange rates of these currencies or any other applicable       
currencies to the U.S. dollar will affect our costs of goods sold and operating 
margins and could result in exchange losses. We cannot fully predict the impact 
of future exchange rate fluctuations on our profitability. From time to time,   
we may engage in exchange rate hedging activities in an effort to mitigate the  
impact of exchange rate fluctuations. However, we cannot assure you that any    
hedging technique we may implement will be effective. If it is not effective,   
we may experience reduced operating margins.                                    

We could suffer adverse tax and other financial consequences if U.S. or foreign 
taxing authorities do not agree with our interpretation of applicable tax laws. 

 Our corporate structure is based, in part, on assumptions about the various
tax laws, including withholding tax, and other relevant laws of applicable      
non-U.S. jurisdictions. We cannot assure you that foreign taxing authorities    
will agree with our interpretations or that they will reach the same            
conclusions. Our interpretations are not binding on any taxing authority and,   
if these foreign jurisdictions were to change or to modify the relevant laws,   
we could suffer adverse tax and other financial consequences or have the        
anticipated benefits of our corporate structure materially impaired.            

Because the Malaysian business previously operated as a subsidiary of Intersil, 
our future financial results may be significantly different from those          
experienced historically.                                                       

 Prior to our acquisition of our Malaysian business in 2000, it was operated
as a subsidiary of Intersil. All the historical revenues of the Malaysian       
business represent intercompany sales to Intersil on terms determined by        
Intersil. Although we expect to retain this business pursuant to a five-year    
supply agreement with Intersil, volume, product mix and pricing may change in   
the future, and we cannot assure you that Intersil will perform under our       
supply agreement.                                                               

We entered into supply contracts with Intersil in connection with our           
acquisition of our Malaysian business and with Fairchild Semiconductor          
following Fairchild's acquisition of Intersil's discrete power business, and    
any decrease in the purchase requirements of Intersil or Fairchild or the       
inability of Intersil or Fairchild to meet its contractual obligations could    
substantially reduce the financial performance of our Malaysian subsidiary.     

 Historically, the Malaysian business generated all of its revenues from the
sale of products and services to affiliated Intersil companies. The revenue of  
the Malaysian business for the first six months of 2000 prior to our            
acquisition of it and for all of 1999 was $41.9 million and $101.9 million,     
respectively. As a result of our acquisition of the Malaysian business, we have 
numerous arrangements with Intersil, including arrangements relating to         
packaging and test services as a vendor to affiliated Intersil companies and    
other services. Any material adverse change in the purchase requirements of     
Intersil or in its ability to fulfill its other contractual obligations could   
have a material adverse effect on our Malaysian subsidiary. Moreover, we may be 
unable to sell any products and services to affiliated Intersil companies       
beyond the term of our five-year supply agreement with Intersil. In connection  
with Fairchild Semiconductor's acquisition of Intersil's discrete power         
business, we entered into an assignment agreement that assigned Intersil's      
portion of the supply agreement relating to this business to Fairchild. We have 
also entered into a three-year IT services agreement with Intersil under which  
the Malaysian business will continue to obtain a number of these services from  
Intersil. We cannot assure you that Fairchild will perform under the supply     
agreement or that Intersil will perform under the supply and services           
agreements or that upon termination of these agreements we will be able to      
obtain similar services on comparable terms.                                    

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We may not be able to consummate future acquisitions, and consequences of those 
acquisitions which we do complete may adversely affect us.                      

  We plan to continue to pursue additional acquisitions of related businesses.
The expense incurred in consummating the future acquisition of related          
businesses, or our failure to integrate those businesses successfully into our  
existing business, could result in our incurring unanticipated expenses and     
losses. We plan to continue to pursue additional acquisitions of related        
businesses in the future. We may be unable to identify or finance additional    
acquisitions or realize any anticipated benefits from those acquisitions.       

 Should we successfully acquire another business, the process of integrating
acquired operations into our existing operations may result in unforeseen       
operating difficulties and may require significant financial resources that     
would otherwise be available for the ongoing development or expansion of our    
existing operations. Possible future acquisitions could result in the           
incurrence of contingent liabilities and amortization expenses related to       
goodwill and other intangible assets, all of which could have a material        
adverse effect on our financial condition and operating results.                

In addition, we may finance future acquisitions with additional           
indebtedness. We have a substantial amount of outstanding indebtedness and      
will, subject to compliance with our debt instruments, have the ability to      
incur additional indebtedness. We will be required to generate cash flow from   
operations to service that indebtedness and there can be no assurance that we   
will generate sufficient cash flow to service that indebtedness. We may be      
required to refinance our indebtedness upon its maturity, and we cannot assure  
you that we will be able to refinance our indebtedness at all or on terms       
acceptable to us.                                                               

Terrorist attacks, such as the attacks that occurred in New York and            
Washington, D.C. on September 11, 2001, and other acts of violence or war may   
affect the markets on which the notes trade, the markets in which we operate,   
our operations and our profitability.                                           

 Terrorist attacks may negatively effect our operations and your investment.
There can be no assurance that there will not be further terrorist attacks      
against the United States or United States businesses. These attacks or armed   
conflicts may directly impact our physical facilities or those of our suppliers 
or customers. Our current facilities include administrative, sales, and R&D     
facilities in the United States of America and manufacturing facilities in      
South Korea, Malaysia and China. Furthermore, these attacks may make travel and 
the transportation of our supplies and products more difficult and more         
expensive and ultimately affect the sales of our products in the United States  
and overseas.                                                                   

Also as a result of terrorism, the United States may enter into an armed  
conflict which could have a further impact on our domestic and international    
sales, our supply chain, our production capability and our ability to deliver   
product to our customers. Political and economic instability in some regions of 
the world may also result and could negatively impact our business. The         
consequences of any of these armed conflicts are unpredictable, and we may not  
be able to foresee events that could have an adverse effect on our business or  
your investment.                                                                

A limited number of persons indirectly control us and may exercise their        
control in a manner adverse to your interests.                                  

At December 31, 2001, Citicorp Venture Capital, Ltd. and its affiliates   
owned or had the right to acquire 23,849,399 shares or approximately 34.4% of   
our outstanding common stock. At December 31, 2000, funds affiliated with Bain  
Capital, Inc. owned 16,303,749 shares or approximately 23.5%, of our            
outstanding common stock. By virtue of this stock ownership, these entities     
collectively have the power to direct our affairs and will be able to determine 
the outcome of all matters required to be submitted to stockholders for         
approval, including the election of a majority of our directors, any merger,    
consolidation or sale of all or substantially all of our assets and amendment   
of our certificate of incorporation. Because a limited number of persons        
control us, transactions could be difficult or impossible to complete without   
the support of those persons. It is possible that these persons will exercise   
control over us in a manner adverse to your interests.                          

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If our relationship with Hynix Semiconductor, our previous owner, deteriorates, 
our business operations could be interrupted.                                   

 Our facilities in Ichon, South Korea occupy a portion of a building located
on property owned by Hynix Semiconductor, a current stockholder and former      
majority owner. In addition, Hynix Semiconductor is one of our current          
customers. An unfavorable change in our relations with Hynix Semiconductor      
could adversely affect services we receive from them at this facility and the   
revenue we derive from the products and services we provide to them.            

Environmental, health and safety laws could require us to incur capital and     
operational costs to maintain compliance and could impose liability to remedy   
the effects of hazardous substance contamination.                               

We are subject to liabilities and compliance obligations arising under    
environmental, health and safety laws. These laws impose various controls on    
the quality of our air and water discharges, on the storage, handling,          
discharge and disposal of chemicals the company uses, and on employee exposure  
to hazardous substances in the workplace. Environmental, health and safety laws 
could require us to incur capital and operational costs to maintain compliance  
and could impose liability to remedy the effects of hazardous substance         
contamination. We cannot assure you that applicable environmental, health and   
safety laws will not in the future impose the need for additional capital       
equipment or other process requirements upon the company, curtail its           
operations, or restrict its ability to expand its operations. The adoption of   
new environmental, health and safety laws, the failure to comply with new or    
existing laws, or issues relating to hazardous substance contamination could    
subject the company to future material liability.                               

FORWARD-LOOKING STATEMENTS  

This prospectus, including the section entitled "Risk Factors," contains  
forward-looking statements. These statements relate to future events or our     
future financial performance and involve known and unknown risks, uncertainties 
and other factors that may cause our or our industry's actual results, levels   
of activity, performance or achievements to be materially different from any    
future results, levels of activity, performance or achievements expressed or    
implied by such forward-looking statements. Such risks and other factors        
include, among other things, those listed under "Risk Factors" and elsewhere in 
this prospectus. In some cases, you can identify forward-looking statements by  
terminology such as "may," "will," "should," "expects," "plans," "anticipates," 
"believes," "estimates," "predicts," "potential," "continue" or the negative of 
such terms or other comparable terminology. These statements are only           
predictions. Actual events or results may differ materially. In evaluating      
these statements, you should specifically consider various factors, including   
the risks outlined under "Risk Factors." These factors may cause our actual     
results to differ materially from any forward-looking statement.                

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RATIO OF EARNINGS TO FIXED CHARGES  

The following table sets forth our consolidated ratio of earnings to fixed
charges for the years ended December 31, 2000, 1999, 1998, 1997 and 1996 and    
for the nine months ended September 30, 2001.                                   

                                                                [Download Table]

                                                              September 30, 
                                                                   2001     
                                                              --------------
                                                              (in thousands)
                                                                            
Total indebtedness...........................................    $362,000   

                                                                [Download Table]


                                        Years Ended December 31,                   
                                        ------------------------ Nine Months Ended 
                                        2000 1999 1998 1997 1996 September 30, 2001
                                        ---- ---- ---- ---- ---- ------------------
                                                                                   
Ratio of earnings to fixed charges..... 1.4x  --  4.3x  --   --          --        

  For purposes of the computation of ratio of earnings to fixed charges in the
table above, earnings are defined as income (loss) before provision for income  
taxes and fixed charges. Fixed charges are interest costs and amortization of   
debt issuance cost. For the years ended December 31, 1996, 1997 and 1999 and    
the nine months ended September 30, 2001, earnings were insufficient to cover   
fixed charges by $2.7 million, $55.8 million, $4.0 million and $37.9 million,   
respectively.                                                                   

The ratios provided above are often used by investors to evaluate a       
company's capital structure and its ability to make payments on its debt. The   
ratio of earnings to fixed charges attempts to capture the relative protection  
that operating profitability provides our noteholders by permitting them to     
assess the probability of our failing to make required principal and interest   
payments on the notes. If adverse economic and industry conditions adversely    
affect our operating earnings, the subsequent worsening of this ratio would     
indicate to our noteholders that we are at a greater risk of failing to meet    
our interest payment obligations.                                               

USE OF PROCEEDS 

  We will receive no proceeds from this offering. The selling security holders
will receive the proceeds from this offering.                                   

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SELLING SECURITY HOLDER 

We initially issued the notes in a private placement in June 2001. The    
selling security holder, CVC Capital Funding, LLC, may offer and sell the notes 
pursuant to this prospectus.                                                    

As shown in the table below this paragraph, CVC Capital Funding, LLC holds
$15,000,000 aggregate principal amount of the notes, which is 9.09% of the      
total amount of notes outstanding. The selling security holder is an affiliate  
of Citicorp Venture Capital, Ltd. which, along with its affiliates, owns or has 
the right to acquire approximately 32.1% of our outstanding stock. This         
information is based on information provided by or on behalf of CVC Capital     
Funding, LLC. The term "selling security holder" includes, without duplication, 
CVC Capital Funding, LLC and its transferees, pledgees, donees or other         
successors. The information concerning the selling security holder may change   
from time to time and any changed information will be set forth in supplements  
to this prospectus if and when necessary.                                       

                                                 Principal Amount of
                                                 Notes Outstanding to be
                Principal Amount of              Owned
Name of Selling        Notes Owned Prior to       after Completion of 
Security Holder              Offering                  Offering       
------------------------- ------------------------- -------------------------   
CVC Capital Funding, LLC         $15,000,000                  0/0%              

 The selling security holder may offer all, some of none of the notes and as
a result, no estimate can be give as to the amount of the notes that will be    
held by the selling security holder upon termination of any offering.           

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PLAN OF DISTRIBUTION  

The notes covered by this prospectus may be sold from time to time to     
purchasers directly by the selling security holders. Alternatively, the selling 
security holders may from time to time offer the securities through             
underwriters, broker-dealers or agents who may receive compensation in the form 
of underwriting discounts, concessions or commissions from the selling security 
holders and/or the purchasers of securities for whom they may act as agent. The 
selling security holders and any underwriters, broker-dealers or agents that    
participate in the distribution of the securities may be deemed to be           
"underwriters" within the meaning of the Securities Act of 1933, as amended, or 
the Securities Act, and any profit on the sale of securities by them and any    
discounts, commissions, concessions or other compensation received by any such  
underwriter, broker-dealer or agent may be deemed to be underwriting discounts  
and commissions under the Securities Act. We will not receive any of the        
proceeds from the offering of the notes by the selling security holders.        

Because the selling security holders may be deemed to be "underwriters"   
within the meaning of the Securities Act, the selling security holders will be  
subject to the prospectus delivery requirements of the Securities Act. We have  
informed the selling security holders that the anti-manipulation provisions of  
Regulation M promulgated under the Exchange Act may apply to their sales in the 
market.                                                                         

  The notes covered by this prospectus may be sold from time to time in one or
more transactions at:                                                           

.  fixed prices;                                                            

.  prevailing market prices at the time of sale;                            

.  varying prices determined at the time of sale; or                        

.  negotiated prices.                                                       

Such prices will be determined by the selling security holders or by      
agreement between the selling security holders and underwriters and dealers who 
may receive fees or commissions in connection therewith.                        

The sale of the securities may be effected in transactions:               

.  on any national securities exchange or quotation service on which the    
notes may be listed or quoted at the time of sale;                    

.  in the over-the-counter market;                                          

.  in transactions other than on such exchanges or in the over-the-counter  
market;                                                               

.  through the writing of options; or                                       

.  in any other lawful manner.                                              

These transactions may include block transaction or crosses. Crosses are  
transactions in which the same broker acts as an agent on both sides of the     
trade.                                                                          

At the time of a particular offering of securities by a selling security  
holder, a supplement to this prospectus, if required, will be distributed       
setting forth the aggregate amount and type of securities being offered and the 
terms of the offering, including the name or names of any underwriters,         
broker-dealers or agents, any discounts, commissions and other terms            
constituting compensation from the selling security holders and any discounts,  
commissions or concessions allowed or reallowed or paid to broker-dealers.      

 To comply with the securities laws of certain jurisdictions, if applicable,
the securities will be offered or sold in such jurisdictions only through       
registered or licensed brokers or dealers. In addition, in certain              
jurisdictions the securities may not be offered or sold (unless they have been  
registered or qualified for sale) in such jurisdictions or an exemption from    
registration or qualification is available and is complied with.                

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We originally sold the notes in June 2001 to Citicorp Capital Investors,  
Limited in a private placement. Citicorp Capital Investors, Limited then        
transferred the notes to an affiliate, CVC Capital Funding, LLC. We agreed      
pursuant to a registration rights agreement to use commercially reasonable      
efforts to cause the registration statement to which this prospectus relates to 
become effective within 180 days after the date the notes were issued and to    
keep the registration statement effective until the earlier of two years or the 
time when all of the notes have been sold pursuant to this registration         
statement or Rule 144 or can be sold pursuant to Rule 144(k). CVC Capital       
Funding, LLC has represented to us that it is not a broker-dealer. Nonetheless, 
CVC Capital Funding, LLC has represented to us that it is an affiliate of a     
broker-dealer. Because Citicorp Inc. ultimately controls one or more registered 
broker-dealers and CVC Capital Funding, LLC, CVC Capital Funding, LLC may be    
viewed as under common control with the broker-dealer entities and, therefore,  
an affiliate of those broker-dealer entities. CVC Capital Funding, LLC,         
however, has advised us that it originally purchased the securities for its own 
account and that it purchased the securities in the ordinary course of business 
with no pre-arrangements, either directly or indirectly with any person, to     
sell such securities. Pursuant to the registration rights agreement, we will    
pay all expenses of the registration of the notes including, without            
limitation, SEC filing fees and expenses of compliance with state securities or 
"blue sky" laws and the reasonable fees and expenses of counsel to the selling  
security holders. The selling security holders are responsible for all          
underwriting discounts and selling commissions, if any. We and the selling      
security holders will indemnify each other against certain liabilities,         
including certain liabilities under the Securities Act.                         

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DESCRIPTION OF NOTES  

General                                                                         

 You can find the definitions of terms used in this description that are not
defined when first used under the subheading of "Definitions." In this section  
of the prospectus, unless the context requires otherwise, the words "ChipPAC,"  
"Company," "we," "our," "ours" and "us" refer only to ChipPAC, Inc. and not to  
any of its subsidiaries. The "Issuer" refers to ChipPAC International Company   
Limited, a wholly owned subsidiary of ChipPAC, Inc.                             

ChipPAC International Company Limited issued the notes under an indenture 
dated July 29, 1999 by and among itself, ChipPAC, Inc. and U.S. Bank, N.A.,     
formerly known as Firstar Bank, N.A., as trustee. The terms of the notes        
include those stated in the indenture and those made part of the indenture by   
reference to the Trust Indenture Act of 1939, as amended.                       

The form and terms of the notes are identical in all material respects to 
the form and terms of the $150,000,000 aggregate principal amount of            
outstanding notes issued under the same indenture in 1999, referred to          
hereafter as the "original notes," except that:                                 

.  the notes have a later issue date than the original notes;               

.  the first interest payment date on the notes is August 1, 2001; and      

 .  the holders of the notes have rights under a registration rights agreement
    that is separate from the registration rights agreement for the benefit of
  the holders of the original notes, and the registration rights agreement
  for the holders of the notes provides for liquidated damages relating to
the timing of this registration statement.                            

The notes will evidence the same debt as the original notes and will be   
entitled to the same benefits of the indenture. The notes will rank equally     
with the original notes. Accordingly, unless the context otherwise requires,    
references to and descriptions of the "notes" also includes the original notes. 

The following description is only a summary of the material provisions of 
the indenture, which is filed as an exhibit to the registration statement of    
which this prospectus forms a part. We urge you to read the indenture because   
it, and not this description, defines your rights as holders of the notes. You  
may request copies of these agreements at our address provided under "Where You 
Can Find More Information."                                                     

Brief Description of the Notes and the Guaranties                               

The Notes                                                                   

These notes:                                                              

.  are unsecured senior subordinated obligations of ChipPAC International   
Company Limited;                                                      

.  rank equally in right of payment with any future senior subordinated     
Indebtedness of ChipPAC International Company Limited;                

.  are subordinated in right of payment to all existing and future Senior   
Indebtedness of ChipPAC International Company Limited; and            

.  are senior in right of payment to any future Subordinated Obligations of 
ChipPAC International Company Limited and preferred dividends.        

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The Guaranties                                                              

The Company Guaranty and each Subsidiary Guaranty:                        

.  unconditionally guarantee on a joint and several basis the obligations of
ChipPAC International Company Limited under the notes;                

.  rank equally in right of payment with any future senior subordinated     
Indebtedness of the Guarantor; and                                    

.  are senior subordinated obligations of the Company and the relevant      
Subsidiary Guarantor, as the case may be.                             

Principal, Maturity and Interest                                                

The notes:                                                                

 .  will be limited in aggregate principal amount to $165.0 million (including
the original notes);                                                  

.  will be issued in denominations of $1,000 and any integral multiple of   
$1,000; and                                                           

.  will mature on August 1, 2009.                                           

  Contingent upon our compliance with the covenant described under the caption
"--Significant Covenants--Limitation on Indebtedness," we are permitted to      
issue more notes, which we refer to as "Additional Notes," under the indenture  
in an unlimited principal amount. Any Additional Notes that are actually issued 
will be treated as issued and outstanding notes and as the same class as the    
outstanding notes for all purposes of the indenture and this "Description of    
the Notes," unless the context indicates otherwise.                             

Interest on these notes will accrue at the rate of 12 3/4% per annum and  
will be payable semiannually in arrears on August 1 and February 1. We will     
make each interest payment to the holders of record of these notes on the       
immediately preceding July 15 and January 15. We will pay interest on overdue   
principal at 1% per annum in excess of the above rate and will pay interest on  
overdue installments of interest at a higher rate to the extent lawful.         
Interest will be computed on the basis of a 360-day year comprised of twelve    
30-day months.                                                                  

Optional Redemption                                                             

  Except as provided below under this section or under the section "Redemption
for Changes in British Virgin Islands Withholding Taxes," we will not be        
entitled to redeem the notes at our option prior to August 1, 2004.             

  On and after August 1, 2004, we will be entitled at our option to redeem all
or a portion of these notes. We can do so by providing between 30 and 60 days'  
notice of our intent to redeem. The redemption prices, which are expressed as   
percentages of principal amount, are specified below if redeemed during the     
12-month period beginning on August 1 in the years indicated below:             

                                                                [Download Table]

Year                                              Percentage
----                                              ----------
                                                            
2004.............................................  106.375% 
2005.............................................  104.250% 
2006.............................................  102.125% 
2007 and thereafter..............................  100.000% 

In addition, prior to August 1, 2002, we may at our option on one or more 
occasions redeem notes, including Additional Notes, if any, in an aggregate     
principal amount not to exceed 35% of the aggregate principal amount of notes,  
including the original notes and Additional Notes, if any, originally issued    
under the indenture. These notes can be redeemed at a redemption price of       
112 3/4% of their principal amount with the net cash proceeds from one or more  
Equity Offerings. If the Equity Offering is an offering by the Company, a       
portion of the Net                                                              

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Cash Proceeds equal to the amount required to redeem any notes is contributed   
to the equity capital of ChipPAC International Company Limited. Following this  
redemption:                                                                     

  (1)at least 65% of the aggregate principal amount of notes, which includes
      the original notes and Additional Notes, if any, must remain outstanding
      immediately after the occurrence of each redemption, other than exchange
notes held, directly or indirectly, by us or our Affiliates; and  

  (2)each redemption must occur within 60 days after the date of the closing
of the related Equity Offering.                                   

Selection and Notice of Redemption                                              

If we are redeeming less than all the notes at any time, the trustee will 
select notes on a pro rata basis, by lot or by another method as the trustee in 
its sole discretion shall deem to be fair and appropriate.                      

  Notes redeemed in part will be redeemed only in principal amounts of $1,000.
We will cause notices of redemption to be mailed by first-class mail at least   
30 but not more than 60 days before the redemption date to each holder of notes 
to be redeemed at its registered address.                                       

If any exchange note is to be redeemed in part only, the notice of        
redemption that relates to that note shall state the portion of the principal   
amount to be redeemed. We will issue a new exchange note in principal amount    
equal to the unredeemed portion of the original exchange note in the name of    
the holder upon cancellation of the original exchange note. Notes called for    
redemption become due on the date fixed for redemption. On and after the        
redemption date, interest ceases to accrue on notes or portions of them called  
for redemption.                                                                 

Withholding Taxes                                                               

 All payments made under the notes or under the Guaranties must be made free
and clear of and without withholding or deduction for any present or future     
tax, duty, levy, impost, assessment or other governmental charge of whatever    
nature. These charges, which we refer to as "taxes," include penalties,         
interest and other related liabilities, imposed by any jurisdiction from or     
through which payment is made or in which the payor is organized, resident or   
engaged in business for tax purposes, unless any of ChipPAC International       
Company Limited or the guarantors is required to withhold or deduct taxes by    
law. If ChipPAC International Company Limited or a guarantor is required to     
withhold or deduct any amount for any taxes from any payment made under the     
notes or under a Guaranty, ChipPAC International Company Limited or guarantor,  
will pay additional amounts to make up for these taxes. These additional        
amounts cannot be made to any holder connected with the British Virgin Islands. 
The procedures for reimbursing holders for these additional amount are          
specified in the indenture.                                                     

 ChipPAC International Company Limited or the guarantors will pay any taxes,
that arise in any jurisdiction from the execution, delivery, enforcement or     
registration of the notes or a Guaranty, or the receipt of any payments on the  
notes or a Guaranty, imposed by any jurisdiction other than:                    

.  the British Virgin Islands;                                              

.  any other jurisdiction in which any of ChipPAC International Company     
 Limited or the guarantors is organized, resident or engaged in business
for tax purposes;                                                     

.  any jurisdiction in which any successor to ChipPAC International Company 
 Limited or the guarantors is organized, resident or engaged in business
for tax purposes; or                                                  

.  any jurisdiction in which a paying agent is located.                     

In addition, ChipPAC International Company Limited and the guarantors will
agree to indemnify the Holders, on an after-tax basis, for any taxes paid by    
these Holders.                                                                  

 The obligations described under this heading shall survive any termination,
defeasance or discharge of the indenture.                                       

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Redemption for Changes in British Virgin Islands Withholding Taxes              

The notes may be redeemed, at the option of ChipPAC International Company 
Limited, at any time as a whole at 100% of the principal amount, in the event   
ChipPAC International Company Limited has become or will become obligated to    
pay for, any withholding taxes on additional amounts as a result of a change in 
or an amendment to the laws or regulations of the British Virgin Islands. The   
redemption must be made within 30 to 60 days from the date of notice of the     
redemption. No notice of redemption may be given earlier than 60 days prior to  
the earliest date on which additional amounts are due and payable on the notes. 

Prior to giving any notice of redemption under this provision, ChipPAC    
International Company Limited will deliver to the applicable trustee:           

.  an Officers' Certificate stating that it is entitled to effect the       
redemption and setting forth a statement of facts showing that the    
conditions precedent to its right to so redeem have occurred; and     

.  an Opinion of Counsel in the British Virgin Islands that ChipPAC         
  International Company Limited has become or will become obligated to pay
the Additional Amounts as a result of the amendment or change.        

Guaranties                                                                      

We and each of the Subsidiary Guarantors will jointly and severally       
guarantee, on a senior subordinated basis, our obligations under the notes.     
Each Subsidiary Guaranty will be limited as necessary to prevent a Subsidiary   
Guaranty from being rendered voidable under applicable law relating to          
fraudulent conveyance or fraudulent transfer or similar laws affecting the      
rights of creditors generally.                                                  

  Each Subsidiary Guarantor that makes a payment under its Subsidiary Guaranty
will be entitled to a contribution from each other Subsidiary Guarantor in an   
amount equal to the other Subsidiary Guarantor's pro rata portion of the        
payment based on the respective net assets of all the Subsidiary Guarantors at  
the time of the payment determined consistent with GAAP.                        

If a Subsidiary Guaranty were to be rendered voidable, it could be        
subordinated by a court to all other indebtedness, including guarantees and     
other contingent liabilities, of the applicable Subsidiary Guarantor. Depending 
on the amount of the indebtedness, a Subsidiary Guarantor's liability on its    
Subsidiary Guaranty could be reduced to zero.                                   

  Under the indenture, ChipPAC International Company Limited, ChipPAC, Inc. or
a Subsidiary Guarantor may consolidate with, merge with or into, or transfer    
all or substantially all its assets to any other Person to the extent described 
below under "--Significant Covenants--Merger and Consolidation." However, that  
if the surviving Person is not ChipPAC International Company Limited, ChipPAC,  
Inc. or the Subsidiary Guarantor, as the case may be, ChipPAC International     
Company Limited's obligations under the notes, our obligations under the        
Company Guaranty or the Subsidiary Guarantor's obligations under its Subsidiary 
Guaranty, as the case may be, must be expressly assumed by the surviving Person.

A Subsidiary Guarantor will be released and relieved from all its         
obligations under its Subsidiary Guaranty:                                      

.  upon the sale or other disposition, including by way of consolidation or 
 merger, of all or substantially all the capital stock of the Subsidiary
Guarantor in one or more related transactions; or                     

 .  upon the sale, assignment, transfer or disposition of all or substantially
all the assets of the Subsidiary Guarantor in one or more related     
transactions;                                                         

in each case other than to ChipPAC International Company Limited or an          
Affiliate of ChipPAC International Company Limited and as permitted by the      
indenture.                                                                      

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Ranking                                                                         

Notes and Guaranties Versus Senior Indebtedness                             

The indebtedness evidenced by the notes, the Company Guaranty and the     
Subsidiary Guaranties will be senior subordinated obligations. The payment of   
the principal of, premium, if any, and interest on the notes and the payment of 
the Company Guaranty and any Subsidiary Guaranty is subordinate in right of     
payment to the prior payment in full in cash when due of all Obligations on     
Senior Indebtedness, including the obligations under the Credit Agreement.      

As of September 30, 2001,                                                 

.  the Senior Indebtedness of ChipPAC International Company Limited was     
$147.0 million, all of which is secured indebtedness under the Credit 
Agreement;                                                            

 .  the Senior Indebtedness of ChipPAC, Inc. was $147.0 million, consisting of
    our senior guaranty of ChipPAC International Company Limited's obligations
under the Credit Agreement; and                                       

.  the Senior Indebtedness of the Subsidiary Guarantors was approximately   
  $147.0 million, consisting of the Subsidiary Guarantors' senior guaranty
 of ChipPAC International Company Limited's obligations under the Credit
Agreement.                                                            

In addition, ChipPAC International Company Limited has additional         
availability of $25.0 million for borrowings of Senior Indebtedness under the   
Credit Agreement. Although the indenture contains limitations on the amount of  
additional Indebtedness that ChipPAC International Company Limited, ChipPAC,    
Inc. and the Subsidiary Guarantors may be able to incur an amount of the        
Indebtedness that is substantial and, in any case, the Indebtedness may be      
Senior Indebtedness. See "--Significant Covenants--Limitation on Indebtedness." 

Guaranties Versus Other Liabilities of Subsidiaries                         

All of our operations are conducted through our subsidiaries that are not 
subsidiaries of ChipPAC International Company Limited. Our Chinese subsidiaries 
are not guaranteeing the notes or ChipPAC International Company Limited's       
obligations under the Credit Agreement. Claims of creditors of the              
non-guarantor subsidiaries, including trade creditors, secured creditors and    
creditors holding indebtedness and guarantees issued by the non-guarantor       
subsidiaries, and claims of preferred stockholders, if any, of the              
non-guarantor subsidiaries generally will have priority on the assets and       
earnings of the non-guarantor subsidiaries over the claims of creditors of      
ChipPAC International Company Limited, including holders of the notes, even if  
the obligations do not constitute Senior Indebtedness. The notes, the Company   
Guaranty and each Subsidiary Guaranty, therefore, will be effectively           
subordinated to creditors, including trade creditors, and preferred             
stockholders of the non-guarantor subsidiaries of the Company.                  

As of September 30, 2001, the total liabilities of our non-guarantor      
subsidiaries were approximately $72.8 million. Although the indenture limits    
the incurrence of Indebtedness and preferred stock of our subsidiaries, the     
limitation is significantly qualified. Moreover, the indenture does not impose  
any limitation on the incurrence by the subsidiaries of liabilities that are    
not considered Indebtedness or Preferred Stock under the indenture. See         
"--Significant Covenants--Limitation on Indebtedness."                          

Notes and Guaranties Versus Other Senior Subordinated Indebtedness          

  Only Indebtedness of ChipPAC International Company Limited, ChipPAC, Inc. or
a Subsidiary Guarantor that is Senior Indebtedness will rank senior to the      
notes, the Company Guaranty and the relevant Subsidiary Guaranty consistent     
with the provisions of the indenture. The notes, the Company Guaranty and each  
Subsidiary Guaranty will in all respects rank equally with all other Senior     
Subordinated Indebtedness of ChipPAC International Company Limited, ChipPAC,    
Inc. and the relevant Subsidiary Guarantor, respectively. All Indebtedness of a 
Subsidiary of ours that is not a Subsidiary Guarantor will be structurally      
senior to the notes.                                                            

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ChipPAC International Company Limited, ChipPAC, Inc. and each Subsidiary  
Guarantor have agreed in the indenture that they will not Incur, directly or    
indirectly, any Indebtedness that is subordinate or junior in ranking in right  
of payment to its Senior Indebtedness unless the Indebtedness is Senior         
Subordinated Indebtedness or is expressly subordinated in right of payment to   
Senior Subordinated Indebtedness. Unsecured Indebtedness is not deemed to be    
subordinated or junior to Secured Indebtedness merely because it is unsecured.  

Payment of Notes                                                            

We are not permitted to pay principal of, premium, if any, or interest on,
the notes or defease, repurchase, redeem or otherwise retire any notes, which   
we collectively refer to as, "pay the notes", if either of the following, which 
we refer to as a "Payment Default", occurs:                                     

  .  any Obligations under Senior Indebtedness are not paid in full when due; or

.  any other default on Senior Indebtedness occurs and the maturity of the  
Senior Indebtedness is accelerated consistent with its terms.         

We may, however pay the notes if, the Payment Default has been cured or   
waived and any acceleration has been rescinded in writing or the Senior         
Indebtedness has been paid in full in cash. Notwithstanding the provisions of   
the first sentence of this paragraph, we are permitted to pay the notes if      
ChipPAC International Company Limited and the trustee receive written notice    
approving the payment from the representative of the Senior Indebtedness        
relating to the Payment Default that has occurred and is continuing.            

 During the continuance of any Designated Senior Indebtedness default, other
than a Payment Default, resulting in immediate acceleration, we are not         
permitted to pay the notes for a 179-day payment blockage period. The payment   
blockage period will end earlier if terminated:                                 

 .  by written notice to the trustee and ChipPAC International Company Limited
from the Person or Persons who gave the payment blockage notice;      

.  because no defaults continue in existence which would permit the         
    acceleration of the maturity of any Designated Senior Indebtedness at that
time; or                                                              

  .  because the Designated Senior Indebtedness has been repaid in full in cash.

 Notwithstanding these provisions, unless the Designated Senior Indebtedness
has accelerated or any Payment Default exists, we are permitted to resume       
payments on the notes after the end of the payment blockage period. There       
cannot be more than one payment blockage period in any consecutive 360-day      
period, no matter how many defaults on Designated Senior Indebtedness result    
during the period. If any blockage notice is delivered to the trustee by or on  
behalf of holders of Designated Senior Indebtedness, other than holders of the  
Bank Indebtedness, a representative of holders of Bank Indebtedness may give    
another blockage notice within the period. However, in no event may the total   
number of days during which any payment blockage period or periods is in effect 
exceed 179 days in the aggregate during any 360 consecutive day period, and     
there must be 181 days during any 360-day consecutive period during which no    
payment blockage period is in effect.                                           

Upon any payment or distribution by ChipPAC International Company Limited 
upon any liquidation, dissolution, winding up, assignment for the benefit of    
creditors or marshaling of assets of ChipPAC International Company Limited or   
in a bankruptcy, reorganization, insolvency, receivership or similar proceeding 
relating to ChipPAC International Company Limited or its property:              

 (1)the holders of Senior Indebtedness will be entitled to receive payment
    in full in cash of all Obligations relating to the Senior Indebtedness
before the noteholders are entitled to receive any payment or     
distribution; and                                                 

  (2)until all Obligations under the Senior Indebtedness are paid in full in
      cash, any payment or distribution to which noteholders would be entitled
but for the subordination provisions of the indenture will be     

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made to holders of the Senior Indebtedness as their interests may 
appear, except that holders of notes may receive Capital Stock and
subordinated debt obligations.                                    

If a distribution is made to noteholders that, due to the subordination   
provisions, should not have been made to them, the noteholders are required to  
hold it in trust for the holders of Senior Indebtedness and pay it over to them 
as their interests may appear.                                                  

  If payment of the notes is accelerated because of an Event of Default, we or
the trustee shall promptly notify the holders of Designated Senior Indebtedness 
or the Representative of holders of the acceleration. If any Designated Senior  
Indebtedness is outstanding at the time of acceleration, none of ChipPAC        
International Company Limited, ChipPAC, Inc. nor any Subsidiary Guarantor may   
pay the notes until five Business Days after the Representatives of all the     
issues of Designated Senior Indebtedness receive notice of acceleration and,    
thereafter, may pay the notes only if the indenture otherwise permits payment   
at that time.                                                                   

Our obligations under the Company Guaranty and of a Subsidiary Guarantor  
under its Subsidiary Guaranty are senior subordinated obligations. Accordingly, 
the rights of noteholders to receive payment by the Company or by a Subsidiary  
Guarantor under the Company Guaranty or a Subsidiary Guaranty will be           
subordinated in right of payment to the rights of holders of Senior             
Indebtedness of the Company or the Subsidiary Guarantor, as the case may be.    
The terms of the subordination provisions described above relating to ChipPAC   
International Company Limited's obligations under the notes apply equally to    
the Company and a Subsidiary Guarantor and the obligations of the Company and   
the Subsidiary Guarantor under the Company Guaranty or a Subsidiary Guaranty,   
as the case may be.                                                             

  By reason of the subordination provisions contained in the indenture, in the
event of insolvency, creditors of ChipPAC International Company Limited, the    
Company or a Subsidiary Guarantor who are holders of Senior Indebtedness of     
ChipPAC International Company Limited, the Company or a Subsidiary Guarantor,   
as the case may be, may recover more, ratably, than the noteholders, and        
creditors of ChipPAC International Company Limited who are not holders of       
Senior Indebtedness may recover less, ratably, than holders of Senior           
Indebtedness and may recover more, ratably, than the noteholders.               

 The terms of the subordination provisions described above will not apply to
payments from money or the proceeds of U.S. Government Obligations held in      
trust by the trustee for the payment of principal of and interest on the notes  
under the provisions described under "--Defeasance," if these subordination     
provisions were not violated at the time the respective amounts were deposited  
under the defeasance provisions.                                                

Book-Entry, Delivery and Form                                                   

We will initially issue the notes in the form of one or more global notes,
which we refer to as the "Global Note." The Global Note will be deposited with, 
or on behalf of, the Depository and registered in the name of the Depository or 
its nominee. Except as provided below, the Global Note may be transferred, in   
whole and not in part, only to the Depository or another nominee of the         
Depository. You may hold your beneficial interests in the Global Note directly  
through the Depository if you have an account with the Depository or indirectly 
through organizations which have accounts with the Depository.                  

  The Depository has advised ChipPAC International Company Limited as follows:

 .  The Depository is a limited-purpose trust company organized under the laws
of the State of New York, a member of the Federal Reserve System, a   
    "clearing corporation" as defined in the New York Uniform Commercial Code,
   and "a clearing agency" registered under the provisions of Section 17A of
the Exchange Act.                                                     

.  The Depository was created to hold securities of institutions that have  
  accounts with the Depository which we refer to as "participants," and to
facilitate the clearance and settlement of securities transactions    

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    among its participants in securities through electronic book-entry changes
in accounts of the participants, eliminating the need for physical    
movement of securities certificates.                                  

.  The Depository's participants include securities brokers and dealers,    
    which may include the initial purchasers, banks, trust companies, clearing
corporations and other organizations.                                 

.  Access to the Depository's book-entry system is also available to others 
as banks, brokers, dealers and trust companies, which we refer to     
collectively, as the "indirect participants," that clear through or   
   maintain a custodial relationship with a participant, whether directly or
indirectly.                                                           

ChipPAC International Company Limited expects that the Depository will    
credit, on its book-entry registration and transfer system, the principal       
amount of notes represented by the Global Note to the accounts of participants. 
Ownership of beneficial interests in the Global Note will be limited to         
participants or persons that may hold interests through participants. Ownership 
of beneficial interests in the Global Note will be shown on, and the transfer   
of those ownership interests will be effected only through, records maintained  
by the Depository. These records relate to the laws of various jurisdictions    
may require that purchasers of securities take physical delivery of securities  
in definitive form. These limits and laws may impair the ability to transfer or 
pledge beneficial interests in the Global Note.                                 

So long as the Depository, or its nominee, is the registered holder and   
owner of the Global Note, the Depository or the nominee, as the case may be,    
will be considered the sole legal owner and holder of any related notes         
evidenced by the Global Note. Except as provided below, as an owner of a        
beneficial interest in the Global Note:                                         

.  you will not be entitled to have the notes represented by the Global Note
registered in your name;                                              

.  you will not receive or be entitled to receive physical delivery of      
certificated notes; and                                               

 .  you will not be considered to be the owner or holder of any exchange notes
under the Global Note.                                                

We understand that under existing industry practice, in the event an owner
of a beneficial interest in the Global Note desires to take any action that the 
Depository would authorize the participants to take action, and the             
participants would authorize beneficial owners owning through participants to   
take action or would otherwise act upon the instructions of beneficial owners   
owning through them.                                                            

We will make payments of principal, premium, if any, and interest on notes
represented by the Global Note registered in the name of and held by the        
Depository or its nominee to the Depository or its nominee, as the case may be, 
as the registered owner and holder of the Global Note.                          

  We expect that the Depository or its nominee, upon receipt of any payment of
principal of, premium, if any, or interest on the Global Note will credit       
participants' accounts with payments in amounts proportionate to their          
respective beneficial interests. We also expect that payments by participants   
or indirect participants to owners of beneficial interests in the Global Note   
held through these participants will be governed by standing instructions and   
customary practices and will be the responsibility of these participants. We    
will not have any responsibility or liability for any aspect of the records     
relating to, or payments made on account of, beneficial ownership interests in  
the Global Note for any note or for maintaining, supervising or reviewing any   
records relating to these procedures.                                           

Although the Depository has agreed to these procedures in order to        
facilitate transfers of interests in the Global Note among participants of the  
Depository, it is under no obligation to perform or continue to perform these   
procedures. These procedures may be discontinued at any time. Neither the       
trustee nor ChipPAC International Company Limited will have any responsibility  
or liability for the performance by the Depository or its participants or       
indirect participants of their obligations under the rules and procedures       
governing their operations.                                                     

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Certificated Notes                                                              

  Contingent upon conditions specified in the indenture, the notes represented
by the Global Note are exchangeable for certificated notes in definitive form   
in denominations of $1,000 and integral multiples of $1,000 if:                 

.  the Depository notifies ChipPAC International Company Limited that it is 
    unwilling or unable to continue as Depository for the Global Note or if at
 any time the Depository ceases to be a clearing agency registered under
    the Exchange Act and, in either case, we are unable to appoint a qualified
successor within 90 days;                                             

.  we in our discretion at any time determine not to have all the exchange  
notes represented by the Global Note; or                              

.  a default entitling the holders of the notes to accelerate their maturity
has occurred and is continuing.                                       

Any note that is exchangeable as described above is exchangeable for      
certificated notes issuable in authorized denominations and registered in those 
names as the Depository shall direct. The Global Note is not exchangeable,      
except for a Global Note of the same aggregate denomination to be registered in 
the name of the Depository or its nominee.                                      

Same-Day Payment                                                                

The indenture requires us to make payments on the notes, including        
principal, premium, if any, and interest, by wire transfer of immediately       
available funds to the accounts specified by the holders or, if no account is   
specified, by mailing a check to each holder's registered address.              

Change of Control                                                               

Upon the occurrence of any of the following events, each of which we refer
to as a "Change of Control," each holder shall have the right to require that   
ChipPAC International Company Limited repurchase the holder's notes. The        
purchase price shall be in cash and equal to 101% of the holder's principal     
amount of notes. The change of control events are:                              

(1) any "person," as the term is used in Sections 13(d) and 14(d) of the  
   Exchange Act, other than one or more Permitted Holders, is or becomes
   the beneficial owner, directly or indirectly, of more than 50% of the
total voting power of the Voting Stock of the Company;            

(2) individuals who on the Issue Date constituted the Board of Directors, 
together with any new directors:                                  

(A) whose election by the Board of Directors or whose nomination for
         election by the stockholders of the Company was approved by a vote of
       a majority of the directors of the Company then still in office who
were either directors on the Issue Date or whose election or
nomination for election was previously so approved; or      

 (B) who were elected to the Board of Directors under the Shareholders
      Agreement, as amended, modified or supplemented from time to time,
 cease for any reason to constitute a majority of the Board of
Directors then in office; or                                

(3) the merger or consolidation of the Company with or into another Person
      or the merger of another Person with or into the Company, or the sale of
      all or substantially all the assets of the Company to another Person, in
each case other than a Person that is controlled by the Permitted 
   Holders, if 100% of the aggregate voting power of the Voting Stock of
the Company is changed into or exchanged for cash, securities or  
  property, and do not represent, at least a majority of the aggregate
     voting power of the Voting Stock of the surviving Person or transferee.

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For the purposes of this clause (1), the person will be considered to     
beneficially own any Voting Stock of a Person held by a "parent entity" if the  
Person is the beneficial owner, directly or indirectly, of more than 50% of the 
voting power of the Voting Stock of the parent entity.                          

Within 30 days following any Change of Control, but contingent upon       
compliance with the immediately succeeding paragraph, ChipPAC International     
Company Limited shall mail a notice to each holder with a copy to the trustee   
stating:                                                                        

 (1) that a Change of Control has occurred and that the holder has the right
to require ChipPAC International Company Limited to purchase the  
      holder's notes at a purchase price in cash equal to 101% of the holder's
   principal amount of notes plus any accrued and unpaid interest to the
   date of purchase, limited by holders of record on the relevant record
date to receive interest on the relevant interest payment date;   

(2) the circumstances and relevant facts regarding a Change of Control;   

(3) the repurchase date which shall be no earlier than 30 days nor later  
than 60 days from the date the notice is mailed; and              

(4) the instructions determined by ChipPAC International Company Limited, 
  consistent with this covenant, that a holder must follow in order to
have its notes purchased.                                         

 If the terms of the Credit Agreement prohibit ChipPAC International Company
Limited from making this offer upon a Change of Control or from purchasing any  
notes, ChipPAC International Company Limited covenants to:                      

  (1) repay in full all indebtedness outstanding under the Credit Agreement or
    offer to repay in full that indebtedness and repay the indebtedness of
each lender who has accepted the offer; or                        

(2) obtain the requisite consent under the Credit Agreement to permit the 
purchase of the notes as described above.                         

  ChipPAC International Company Limited must first comply with the covenant in
the prior paragraph before it will be required to purchase notes in the event   
of a Change of Control; provided, however, that ChipPAC International Company   
Limited's failure to comply with the covenant in the prior paragraph or to make 
a Change of Control offer because of any failure shall constitute a Default. As 
a result, a holder of notes may not be able to compel ChipPAC International     
Company Limited to purchase the notes unless ChipPAC International Company      
Limited is able at the time to refinance all indebtedness outstanding under the 
Credit Agreement or obtain requisite consents under the Credit Agreement.       

 The Change of Control purchase feature was a result of negotiations between
ChipPAC International Company Limited and the initial purchasers. We have no    
present intention to engage in a transaction involving a Change of Control,     
although we could decide to do so in the future. We may, in the future, be able 
to enter into specified types of transactions, including acquisitions,          
refinances or other recapitalizations, that would not constitute a Change of    
Control under the indenture, but that could increase the amount of indebtedness 
outstanding at that time or otherwise affect our capital structure or credit    
ratings. Restrictions on our ability to incur additional Indebtedness are       
contained in the covenants described under "--Significant Covenants--Limitation 
on Indebtedness." These restrictions can only be waived with the consent of the 
holders of a majority in principal amount of the notes then outstanding. Except 
for the limitations contained in these covenants, however, the indenture will   
not contain any covenants or provisions that may provide holders of the notes   
protection in the event of a highly leveraged transaction.                      

The Credit Agreement prohibits us from purchasing any notes, and provides 
that the occurrence of change of control events constitute a default under the  
Credit Agreement. In the event a Change of Control occurs at a time when        
ChipPAC International Company Limited is prohibited from purchasing notes,      
ChipPAC International                                                           

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Company Limited could seek the consent of its lenders to the purchase of notes  
or could attempt to refinance the borrowings that contain this prohibition. If  
ChipPAC International Company Limited does not obtain a consent or repay these  
borrowings, ChipPAC International Company Limited will remain prohibited from   
purchasing notes. In that case, ChipPAC International Company Limited's failure 
to comply with this covenant would constitute a Default under the indenture     
which would, in turn, constitute a default under the Credit Agreement. In these 
circumstances, the subordination provisions in the indenture would likely       
restrict payment to the holders of notes.                                       

Future indebtedness that we may incur may contain prohibitions on the     
occurrence of events that would constitute a Change of Control or require that  
this indebtedness be repurchased upon a Change of Control. Moreover, the        
exercise by the holders of their right to require us to repurchase the notes    
could cause a default under this indebtedness, even if the Change of Control    
itself does not, due to the financial effect of the repurchase on us. Finally,  
our ability to pay cash to the holders of notes following the occurrence of a   
Change of Control may be limited by our then existing financial resources.      
There can be no assurance that sufficient funds will be available when          
necessary to make any required repurchases. The provisions under the indenture  
relating to our obligation to make an offer to repurchase the notes as a result 
of a Change of Control may be waived or modified with the written consent of    
the holders of a majority in principal amount of the notes.                     

Significant Covenants                                                           

The indenture contains covenants which include the following:             

Limitation on Indebtedness                                                  

 (a) We shall not, and shall not permit any Restricted Subsidiary to, Incur,
directly or indirectly, any Indebtedness, except that ChipPAC and 
    ChipPAC International Company Limited may Incur Indebtedness if, after
  giving pro forma effect to the Incurrence, the Consolidated Coverage
Ratio exceeds 2.0 to 1.0.                                         

(b) Notwithstanding the provisions of paragraph (a), ChipPAC and its      
Restricted Subsidiaries may Incur the following Indebtedness:     

    (1) Indebtedness of us or any Restricted Subsidiary Incurred under any
     Revolving Credit Facility; provided, however, that, immediately
    after giving effect to the Incurrence, the aggregate principal
        amount of all Indebtedness incurred under this clause (1) and then
          outstanding does not exceed the greater of (A) $50.0 million and (B)
    the sum of (x) $20.0 million, (y) 50% of the book value of our
          inventory and that of our Restricted Subsidiaries and (z) 80% of the
       book value of our accounts receivables and that of our Restricted
        Subsidiaries; provided, however, that the Indebtedness may only be
         Incurred by a Restricted Subsidiary if the Indebtedness, when added
    together with the amount of all other Indebtedness Incurred by
         Restricted Subsidiaries under this clause (1) and then outstanding,
      does not exceed an amount equal to 50% of the greater of (x) the
        amount in clause (A) above and (y) the amount determined in clause
(B) above;                                                

      (2) Indebtedness of ChipPAC International Company Limited Incurred under
     any Term Loan Facilities; provided, however, that, after giving
     effect to the Incurrence, the aggregate principal amount of all
      Indebtedness Incurred under this clause (2) and then outstanding
  does not exceed $190.0 million less the aggregate sum of all
        principal payments actually made from time to time after the Issue
        Date relating to the Indebtedness under paragraph (a)(3)(A) of the
   covenant described under "--Limitation on Sales of Assets and
Subsidiary Stock";                                        

      (3) Indebtedness of ChipPAC International Company Limited Incurred prior
   to August 5, 2001 under any Capital Expenditure Facility (and
    Refinancing Indebtedness of that Indebtedness) in an aggregate
principal amount not to exceed $20.0 million;             

     (4) Indebtedness of us or any Restricted Subsidiary owed to and held by
us or a Restricted Subsidiary; provided, however, that any
        subsequent issuance or transfer of any Capital Stock which results
in a                                                      

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        Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
        subsequent transfer of the Indebtedness (other than to the Company
         or another Restricted Subsidiary) will be considered, in each case,
       to constitute the Incurrence of the Indebtedness by the issuer of
that Indebtedness;                                        

    (5) Indebtedness consisting of the notes, other than Additional Notes;

     (6) Indebtedness outstanding on the Issue Date, other than Indebtedness
     described in clause (1), (2), (3), (4) or (5) of this covenant;

  (7) Refinancing Indebtedness relating to Indebtedness Incurred under
         paragraph (a) or under clause (4), (5), (6), (8) or this clause (7)
      of this paragraph (b); provided, however, that to the extent the
Refinancing Indebtedness directly or indirectly Refinances
 Indebtedness of a Subsidiary Incurred under clause (8), the
         Refinancing Indebtedness shall be Incurred only by that Subsidiary;

      (8) Indebtedness of a Person Incurred and outstanding on or prior to the
          date on which the Person was acquired by the Company or a Restricted
         Subsidiary, other than Indebtedness Incurred in anticipation of, in
       connection with, or to provide all or any portion of the funds or
         credit support utilized to consummate, the transaction or series of
          related transactions where the Person was acquired by the Company or
       a Restricted Subsidiary; provided, however, that after giving pro
        forma effect to the transaction or series of related transactions,
       (a) the Consolidated Coverage Ratio increases as a consequence of
     the incurrence and related acquisition and (b) the Consolidated
Coverage Ratio is at least 1.5 to 1.0;                    

(9) Hedging Obligations of ours or any Restricted Subsidiary under
          Interest Rate Agreements and Currency Agreements entered into in the
         ordinary course of business and not for the purpose of speculation;

 (10) Indebtedness of ours or any Restricted Subsidiary in the form of
         performance bonds, completion guarantees and surety or appeal bonds
        entered into by us and our Restricted Subsidiaries in the ordinary
course of their business;                                 

  (11) Indebtedness consisting of the Guaranties and Guarantees of other
          Indebtedness otherwise permitted to be Incurred under the indenture;

   (12) Indebtedness of ours or any Restricted Subsidiary arising from the
         honoring by a bank or other financial institution of a check, draft
         or similar instrument inadvertently (except in the case of daylight
         overdrafts) drawn against insufficient funds in the ordinary course
          of business, provided that the Indebtedness is satisfied within five
business days of Incurrence;                              

     (13) Indebtedness, including Capital Lease Obligations, Incurred by us or
          any of our Restricted Subsidiaries to finance the purchase, lease or
    improvement of real or personal property or equipment, whether
       through the direct purchase of assets or the Capital Stock of any
       Person owning the assets, in an aggregate principal amount which,
        when added together with the amount of Indebtedness Incurred under
        this clause (13) and then outstanding, does not exceed the greater
   of (A) $15.0 million and (B) 5% of Total Assets (in each case
   including any Refinancing Indebtedness of that Indebtedness);

  (14) Indebtedness Incurred by us or any of our Restricted Subsidiaries
    constituting reimbursement obligations under letters of credit
  issued in the ordinary course of business including, without
         limitation, letters of credit to procure raw materials, or relating
 to workers' compensation claims or self-insurance, or other
       Indebtedness relating to reimbursement-type obligations regarding
workers' compensation claims;                             

(15) Indebtedness of ours issued to any of our directors, employees,
      officers or consultants or a Restricted Subsidiary in connection
          with the redemption or purchase of Capital Stock that, by its terms,
          is subordinated to the notes, is not secured by any of our assets or
          our Restricted Subsidiaries and does not require cash payments prior
to the Stated Maturity of the notes and                   

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    Refinancing Indebtedness of that Indebtedness, in an aggregate
    principal amount which, when added together with the amount of
        Indebtedness Incurred under this clause (15) and then outstanding,
does not exceed $5.0 million;                             

(16) Indebtedness arising from agreements of ours or a Restricted   
      Subsidiary providing for indemnification, adjustment of purchase
          price, earn-out or other similar obligations, in each case, incurred
    or assumed in connection with the disposition of any business,
         assets or a Restricted Subsidiary of ours, other than guarantees of
         Indebtedness incurred by any Person acquiring all or any portion of
      the business, assets or Restricted Subsidiary for the purpose of
    financing the acquisition; provided that the maximum assumable
         liability of all the Indebtedness shall at no time exceed the gross
         proceeds actually received by us and our Restricted Subsidiaries in
connection with the disposition;                          

   (17) Indebtedness arising from the Recapitalization Agreement providing
          for indemnification, adjustment of purchase price, earn-out or other
similar business obligations; and                         

(18) Indebtedness of ours or a Restricted Subsidiary in an aggregate
     principal amount which, together with all other Indebtedness of
        ChipPAC and the Restricted Subsidiaries outstanding on the date of
          Incurrence (other than Indebtedness permitted by clauses (1) through
       (17) above or paragraph (a) above) does not exceed $20.0 million.

(c) Notwithstanding this provision, we shall not, and shall not permit any
    Restricted Subsidiary to, Incur any Refinancing Indebtedness under the
   prior paragraph (b) if the proceeds from the Refinancing Indebtedness
are used, directly or indirectly, to Refinance any Subordinated   
    Obligations unless the Indebtedness shall be subordinated to the notes
     or the relevant Guaranty, as applicable, to at least the same extent as
the Subordinated Obligations.                                     

(d) For purposes of determining compliance with this covenant,            

     (1) if an item of Indebtedness meets the criteria of more than one of the
        types of Indebtedness described above, ChipPAC International Company
Limited, in its sole discretion, will classify the item of  
      Indebtedness at the time of its Incurrence and only be required to
       include the amount and type of the Indebtedness in one of the above
clauses; and                                                

  (2) an item of Indebtedness may be divided and classified in more than
one of the types of Indebtedness described above.           

(e) Notwithstanding paragraphs (a) and (b) above, neither we nor ChipPAC  
International Company Limited shall, and we shall not permit any  
     Subsidiary Guarantor to, Incur (1) any Indebtedness if the Indebtedness
is subordinate or junior in ranking in any respect to any Senior  
   Indebtedness of ChipPAC International Company Limited, the ChipPAC or
 the Subsidiary Guarantor, as applicable, unless the Indebtedness is
    Senior Subordinated Indebtedness or is expressly subordinated in right
of payment to Senior Subordinated Indebtedness or (2) any Secured 
     Indebtedness (other than trade payables incurred in the ordinary course
   of business) that is not Senior Indebtedness unless contemporaneously
therewith effective provision is made to secure the notes or the  
    relevant Guaranty, as applicable, equally and ratably with the Secured
  Indebtedness for so long as the Secured Indebtedness is secured by a
Lien.                                                             

 (f) For purposes of determining compliance with any U.S. dollar denominated
  restriction on the Incurrence of Indebtedness where the Indebtedness
Incurred is denominated in a different currency, the amount of the
    Indebtedness will be the U.S. Dollar Equivalent determined on the date
      of the Incurrence of the Indebtedness, provided, however, that if any of
   the Indebtedness denominated in a different currency is governed by a
  Currency Agreement relating to U.S. dollars, covering all principal,
      premium, if any, and interest payable on the Indebtedness, the amount of
Indebtedness expressed in U.S. dollars will be as provided in the 
      Currency Agreement. The principal amount of any Refinancing Indebtedness
     Incurred in the same currency as the Indebtedness being Refinanced will
     be the U.S. Dollar Equivalent of the Indebtedness Refinanced, except to
the extent that (i) the U.S. Dollar Equivalent was determined     

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based on a Currency Agreement, in which case the Refinancing      
    Indebtedness will be determined compliance the preceding sentence, and
   (ii) the principal amount of the Refinancing Indebtedness exceeds the
      principal amount of the Indebtedness being Refinanced, in which case the
     U.S. Dollar Equivalent of the excess will be determined on the date the
Refinancing Indebtedness is Incurred.                             

Limitation on Restricted Payments                                           

(a) We shall not, and shall not permit any Restricted Subsidiary, directly
   or indirectly, to make a Restricted Payment if at the time that we or
the Restricted Subsidiary makes the Restricted Payment:           

     (1) a Default shall have occurred and be continuing (or would result as a
result of making the Restricted Payment);                   

  (2) we are not able to Incur an additional $1.00 of Indebtedness under
  paragraph (a) of the covenant described under "--Limitation on
Indebtedness;" or                                           

(3) the aggregate amount of the Restricted Payment and all other    
  Restricted Payments since the Issue Date would exceed the sum,
without duplication, of:                                    

     (A) 50% of the Consolidated Net Income accrued during the period,
       treated as one accounting period, from the beginning of the
          fiscal quarter immediately following the fiscal quarter during
        which the notes are originally issued to the end of the most
             recent fiscal quarter for which internal financial statements are
            available on or prior to the date of the Restricted Payment, or,
             in case Consolidated Net Income shall be a deficit, minus 100% of
the deficit;                                        

        (B) the aggregate Net Cash Proceeds received by us from the issuance
        or sale of, or capital contribution relating to, its Capital
         Stock, other than Disqualified Stock, subsequent to the Issue
            Date, other than an issuance or sale to a Subsidiary of ours and
         other than an issuance or sale to an employee stock ownership
           plan or to a trust established by us or any of our Subsidiaries
           for the benefit of employees to the extent that the purchase by
        the plan or trust is financed by Indebtedness of the plan or
             trust to us or any Subsidiary or Indebtedness Guaranteed by us or
            any Subsidiary, and the fair market value, as determined in good
             faith by resolution of our Board of Directors, of property, other
           than cash that would constitute Temporary Cash Equivalents or a
       Related Business, received by us or a Restricted Subsidiary
        subsequent to the Issue Date as a contribution to its common
             equity capital, other than from a Subsidiary or that was financed
with loans from us or any Restricted Subsidiary;    

  (C) the amount by which Indebtedness of ours or any Restricted
            Subsidiary is reduced on our consolidated balance sheet upon the
      conversion or exchange, other than by a Subsidiary of ours
           subsequent to the Issue Date of any Indebtedness of ours or any
             Restricted Subsidiary convertible or exchangeable for our Capital
        Stock, other than Disqualified Stock, less the amount of any
            cash, or the fair value of any other property, distributed by us
             or any Restricted Subsidiary upon the conversion or exchange; and

(D) an amount equal to the sum of (i) the net reduction in  
             Investments in any Person resulting from dividends, repayments of
            loans or advances or other transfers of assets subsequent to the
            Issue Date, in each case to us or any Restricted Subsidiary from
         the Person, and (ii) the portion, proportionate to our equity
           interest in the Subsidiary, of the fair market value of the net
             assets of an Unrestricted Subsidiary at the time the Unrestricted
       Subsidiary is designated a Restricted Subsidiary; provided,
       however, that this sum shall not exceed, in the case of any
             Person, the amount of Investments previously made, and treated as
           a Restricted Payment, by us or any Restricted Subsidiary in the
Person.                                             

(b) The provisions of the prior paragraph (a) shall not prohibit:         

   (1) any Restricted Payment made by exchange for, or out of the proceeds
    of the substantially concurrent sale of, or capital contribution
relating to, our Capital Stock, other than Disqualified     

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          Stock and other than Capital Stock issued or sold to a Subsidiary of
        ours or an employee stock ownership plan or to a trust established
          by us or any of our Subsidiaries for the benefit of employees to the
  extent that the purchase by the plan or trust is financed by
          Indebtedness of the plan or trust to us or any Subsidiary of ours or
        Indebtedness Guaranteed by us or any Subsidiary of ours; provided,
       however, that (A) the Restricted Payment shall be excluded in the
      calculation of the amount of Restricted Payments and (B) the Net
        Cash Proceeds from the sale shall be excluded from the calculation
of amounts under clause (3)(B) of paragraph (a) above;    

(2) any purchase, repurchase, redemption, defeasance or other     
          acquisition or retirement for value of Subordinated Obligations made
  by exchange for, or out of the proceeds of the substantially
        concurrent sale of, Indebtedness which is permitted to be Incurred
        under the covenant described under "--Limitation on Indebtedness;"
   provided, however, that the purchase, repurchase, redemption,
      defeasance or other acquisition or retirement for value shall be
       excluded in the calculation of the amount of Restricted Payments;

  (3) any purchase or redemption of Disqualified Stock of ChipPAC or a
        Restricted Subsidiary made by exchange for, or out of the proceeds
    of the substantially concurrent sale of, Disqualified Stock of
          ChipPAC or a Restricted Subsidiary which is permitted to be Incurred
        under the covenant described under "--Limitation on Indebtedness;"
          provided, however, that the purchase or redemption shall be excluded
in the calculation of the amount of Restricted Payments;  

 (4) any purchase or redemption of Subordinated Obligations from Net
      Available Cash to the extent permitted by the covenant described
   under "--Limitation on Sales of Assets and Subsidiary Stock;"
          provided, however, that the purchase or redemption shall be excluded
in the calculation of the amount of Restricted Payments;  

     (5) upon the occurrence of a Change of Control and within 60 days after
   the completion of the offer to repurchase the notes under the
       covenant described under "Change of Control" above, including the
   purchase of the notes tendered, any purchase or redemption of
Subordinated Obligations required under the terms of the  
        Subordinated Obligations as a result of the Change of Control at a
          purchase or redemption price not to exceed the outstanding principal
         amount of the Subordinated Obligations, plus any accrued and unpaid
interest; provided, however, that:                        

         (A) at the time of the purchase or redemption no Default shall have
             occurred and be continuing or would result from the purchase or
redemption;                                       

       (B) we would be able to Incur an additional $1.00 of Indebtedness
 under paragraph (a) of the covenant described under
             "--Limitation on Indebtedness" after giving pro forma effect to
the Restricted Payment; and                       

         (C) the purchase or redemption shall be included in the calculation
of the amount of Restricted Payments;             

    (6) dividends paid within 60 days after the date of declaration of the
        dividends if, at the date of declaration, the dividends would have
        complied with this covenant; provided, however, that the dividends
      shall be included in the calculation of the amount of Restricted
Payments;                                                 

 (7) the repurchase or other acquisition of shares of, or options to
   purchase shares of, common stock of the Company or any of its
        Subsidiaries from employees, former employees, consultants, former
         consultants, directors or former directors of the Company or any of
    its Subsidiaries, or permitted transferees of these employees,
     former employees, consultants, former consultants, directors or
     former directors), under the terms of the agreements, including
   employment and consulting agreements, or plans, or amendments
      approved by the Board of Directors under which these individuals
     purchase or sell or are granted the option to purchase or sell,
       shares of the common stock; provided, however, that the aggregate
amount of the repurchases shall not exceed the sum of:    

(x) $5.0 million;                                         

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         (y) the Net Cash Proceeds from the sale of Capital Stock to members
            of management or directors of the Company and its Subsidiaries
          that occurs after the Issue Date, to the extent the Net Cash
           Proceeds from the sale have not otherwise been applied to the
          payment of Restricted Payments by virtue of clause (3)(B) of
paragraph (a) above; and                          

         (z) the cash proceeds of any "key man" life insurance policies that
          are used to make the repurchases; provided further, however,
              that (A) the repurchases shall be excluded in the calculation of
             the amount of Restricted Payments and (B) the Net Cash Proceeds
             from the sale shall be excluded from the calculation of amounts
under clause (3)(B) of paragraph (a) above;       

     (8) payments required under the terms of the Recapitalization Agreement
     to consummate the recapitalization; provided, however, that the
    payments shall be excluded in the calculation of the amount of
Restricted Payments;                                      

  (9) payments relating to the Hyundai Earn-out under the terms of the
          Recapitalization Agreement as in effect on the Issue Date; provided,
        however, that the payments shall be excluded in the calculation of
the amount of Restricted Payments;                        

    (10) payments of in-kind dividends when due or the accrual or cumulation
        of dividends on the Hyundai Preferred Stock under the terms of the
          Hyundai Preferred Stock as in effect on the Recapitalization Closing
         Date; provided, however, that the payments shall be excluded in the
calculation of the amount of Restricted Payments;         

  (11) payments of cash dividends when due on and after 5 1/2 years from
      the Recapitalization Closing Date on the Hyundai Preferred Stock
        under the terms of the Hyundai Preferred Stock as in effect on the
         Recapitalization Closing Date; provided, however, that the payments
      shall be included in the calculation of the amount of Restricted
Payments;                                                 

  (12) repurchases of Capital Stock deemed to occur upon the exercise of
    stock options if the Capital Stock represents a portion of the
      exercise price of the stock options; provided, however, that the
    payments shall be excluded in the calculation of the amount of
Restricted Payments;                                      

     (13) payments not to exceed $200,000 in the aggregate solely to enable us
     to make payments to holders of our Capital Stock in lieu of the
   issuance of fractional shares of our Capital Stock; provided,
        however, that the payments shall be excluded in the calculation of
the amount of Restricted Payments;                        

   (14) Restricted Payments not to exceed $15.0 million payable on Capital
        Stock, including Disqualified Stock, issued to customers, clients,
          suppliers or purchasers or sellers of goods or services of ours or a
        Restricted Subsidiary in connection with a strategic investment in
        us or a Restricted Subsidiary by the customers, clients, suppliers
       or purchasers or sellers of goods or services; provided, however,
          that the payments shall be included in the calculation of the amount
of Restricted Payments;                                   

     (15) Restricted Payments not exceeding $15.0 million in the aggregate for
any purchase, repurchase, redemption, defeasance or other 
      acquisition or retirement for value of Subordinated Obligations;
         provided, however, that (A) at the time of the Restricted Payments,
         no Default shall have occurred and be continuing or result from the
   Restricted Payments, and (B) the Restricted Payments shall be
       included in the calculation of the amount of Restricted Payments;

   (16) the distribution, as a dividend or otherwise, of shares of Capital
          Stock or assets of an Unrestricted Subsidiary provided that the fair
          market value, as determined in good faith by our Board of Directors,
          of the shares of Capital Stock or assets shall not exceed the amount
     of the Investments that were made, and not subsequently reduced
under clause (3)(D) of paragraph (a) above, by us in the  
        Unrestricted Subsidiary and were treated as Restricted Payments or
were                                                      

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      included in the calculation of the amount of Restricted Payments
          previously made; provided, however, that (A) the distributions shall
         be excluded in the calculation of the amount of Restricted Payments
  and (B) any net reduction in Investments in the Unrestricted
       Subsidiary resulting from the distribution shall be excluded from
     the calculation of amounts under clause (3)(D) of paragraph (a)
above; or                                                 

 (17) Restricted Payments not exceeding $7.5 million in the aggregate;
         provided, however, that (A) at the time of the Restricted Payments,
         no Default shall have occurred and be continuing or result from the
  restricted payments and (B) the Restricted Payments shall be
       included in the calculation of the amount of Restricted Payments.

Limitation on Restrictions on Distributions from Restricted Subsidiaries    

We shall not, and shall not permit any Restricted Subsidiary to, create or
otherwise cause or permit to exist or become effective any consensual           
encumbrance or restriction on the ability of any Restricted Subsidiary to       
(a) pay dividends or make any other distributions on its Capital Stock to us or 
any Restricted Subsidiary or pay any Indebtedness owed to ChipPAC International 
Company Limited or us, (b) make any loans or advances to ChipPAC International  
Company Limited or us or (c) transfer any of its property or assets to ChipPAC  
International Company Limited or us, except:                                    

(1) any encumbrance or restriction under an agreement in effect at or   
      entered into on the Issue Date, including the indenture, the notes and
     the Guaranties, or, in the case of the Credit Agreement, as in effect
on the Recapitalization Closing Date;                           

(2) any encumbrance or restriction relating to a Restricted Subsidiary  
under an agreement relating to any Indebtedness Incurred by the 
     Restricted Subsidiary on or prior to the date on which the Restricted
  Subsidiary was acquired by us, other than Indebtedness Incurred as
  consideration in, or to provide all or any portion of the funds or
   credit support utilized to consummate, the transaction or series of
related transactions where the Restricted Subsidiary became a   
    Restricted Subsidiary or was acquired by us, and outstanding on that
date;                                                           

(3) any encumbrance or restriction under an agreement (A) evidencing    
Indebtedness Incurred without violation of the indenture or (B) 
   effecting a Refinancing of Indebtedness Incurred under an agreement
       referred to in clause (1) or (2) of this covenant or this clause (3) or
       contained in any amendment to an agreement referred to in clause (1) or
       (2) of this covenant or this clause (3); provided, however, that in the
       case of clauses (A) and (B), the encumbrances and restrictions relating
   the Restricted Subsidiary contained in the refinancing agreement or
       amendment are, in the good faith judgment of the Board of Directors, no
  more restrictive in any material respect than the encumbrances and
restrictions relating to the Restricted Subsidiary contained in 
     agreements of the Restricted Subsidiary in effect at, or entered into
on, the Issue Date or the Recapitalization Closing Date;        

  (4) any encumbrance or restriction consisting of customary non- assignment
    provisions in leases governing leasehold interests to the extent the
    provisions restrict the transfer of the lease or the property leased
thereunder or in licenses entered into in the ordinary course of
business to the extent the licenses restrict the transfer of the
license or the property licensed under the license;             

(5) in the case of clause (c) above, restrictions contained in security 
agreements or mortgages securing Indebtedness of a Restricted   
      Subsidiary so long as the restrictions solely restrict the transfer of
the property governed by the security agreements or mortgages;  

 (6) restrictions on the transfer of assets under any Lien permitted under
the indenture imposed by the holder of the Lien;                

   (7) purchase money obligations for property acquired in the ordinary course
       of business that impose restrictions on the property so acquired of the
nature described in clause (c) above;                           

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(8) provisions relating to the disposition or distribution of assets or 
 property in joint venture agreements and other similar agreements
entered into in the ordinary course of business;                

(9) any restriction relating to a Restricted Subsidiary imposed under an
agreement entered into for the sale or disposition of all or    
substantially all the Capital Stock or assets of the Restricted 
Subsidiary pending the closing of the sale or disposition;      

(10) any restriction arising under applicable law, regulation or order;   

(11) any agreement or instrument governing Capital Stock, other than      
   Disqualified Stock, of any Person that is in effect on the date the
Person is acquired by us or a Restricted Subsidiary;            

(12) any restriction on cash or other deposits or net worth imposed by    
customers under contracts entered into in the ordinary course of
business; and                                                   

 (13) any restriction in any agreement that is not more restrictive than the
    restrictions under the terms of the Credit Agreement as in effect on
the Recapitalization Closing Date.                              

Limitation on Sales of Assets and Subsidiary Stock                          

(a) We shall not, and shall not permit any Restricted Subsidiary to,      
directly or indirectly, consummate any Asset Disposition unless:  

     (1) we or the Restricted Subsidiary receives consideration at the time of
  the Asset Disposition at least equal to the fair market value,
including as to the value of all non-cash consideration, as 
         determined in good faith by the Board of Directors, of the shares and
assets that are part of the Asset Disposition;              

  (2) at least 75% of the consideration received by us or the Restricted
        Subsidiary from the Asset Disposition is in the form of cash or cash
equivalents; and                                            

(3) an amount equal to 100% of the Net Available Cash from the Asset
     Disposition is applied by us or the Restricted Subsidiary, as the
case may be, in one or more of the following ways:          

  (A) to the extent we elect or are required by the terms of any
     Indebtedness, to prepay, repay, redeem or purchase Senior
    Indebtedness of ChipPAC International Company Limited or
       Indebtedness, other than any Disqualified Stock, of ours or
          another Restricted Subsidiary of ours, in each case other than
            Indebtedness owed to the Company or an Affiliate of the Company,
           within one year from the later of the closing date of the Asset
  Disposition and the receipt of the Net Available Cash;

       (B) to the extent we elect, to acquire Additional Assets within one
    year from, or enter into a binding commitment to acquire
            Additional Assets; provided that the commitment shall be subject
       only to customary conditions, other than financing, and the
            acquisition shall be consummated within two years from the later
           of the closing date of the Asset Disposition and the receipt of
the Net Available Cash; and                         

      (C) to the extent we elect, or to the extent of the balance of the
           Net Available Cash after application in compliance with clauses
            (A) and (B), to make an offer to the holders of the notes and to
        holders of other Senior Subordinated Indebtedness of ChipPAC
             International Company Limited designated by ChipPAC International
  Company Limited to purchase notes and the other Senior
       Subordinated Indebtedness in compliance with the conditions
contained in the indenture;                         

     provided, however, that in connection with any prepayment, repayment or
purchase of Indebtedness under clause (A) or (C) above, we or the 
     Restricted Subsidiary shall permanently retire the Indebtedness and, in
the case of any revolving facility, shall cause the related loan  
     commitment, if any, to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased.                 

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     Notwithstanding the provisions of this paragraph, we and the Restricted
   Subsidiaries shall not be required to apply any Net Available Cash in
    compliance with this paragraph except to the extent that the aggregate
     Net Available Cash from all Asset Dispositions which are not applied in
compliance with this paragraph exceeds $10.0 million. Pending     
      application of Net Available Cash under this covenant, the Net Available
    Cash shall be invested in Permitted Investments or used to temporarily
reduce loans outstanding under any revolving credit facility.     

For the purposes of this covenant, the following are deemed to be cash or 
cash equivalents:                                                               

   (x) the assumption of Indebtedness of ours or any Restricted Subsidiary
         and the release of us or the Restricted Subsidiary from all liability
on the Indebtedness as part of the Asset Disposition;       

(y) securities, notes or other obligations received by us or any    
         Restricted Subsidiary from the transferee that are promptly converted
by us or the Restricted Subsidiary into cash; and           

     (z) any Additional Assets, so long as the Additional Assets were acquired
        for fair market value in connection with the transaction giving rise
         to the Asset Disposition, as determined in good faith by the board of
         directors of the Company or the Restricted Subsidiary, as applicable,
    which Additional Assets will be considered to have been acquired
    under clause (A) of the preceding paragraph as part of the Asset
Disposition.                                                

(b) In the event of an Asset Disposition that requires the purchase of the
  notes under clause (a)(3)(C) above, and the purchase of other Senior
      Subordinated Indebtedness, ChipPAC International Company Limited will be
      required to purchase notes tendered in an offer by ChipPAC International
Company Limited for the notes, and other Senior Subordinated      
  Indebtedness, at a purchase price of 100% of their principal amount,
    without premium, plus accrued but unpaid interest, or, relating to the
      other Senior Subordinated Indebtedness, the lesser price, if any, as may
     be provided for by the terms of the Senior Subordinated Indebtedness in
 compliance with the procedures, including prorating in the event of
    oversubscription, in the indenture. If the aggregate purchase price of
 the notes, and any other Senior Subordinated Indebtedness, tendered
   exceeds the Net Available Cash allotted to the purchase of the notes,
   and any other Senior Subordinated Indebtedness, ChipPAC International
      Company Limited will select the notes, and any other Senior Subordinated
    Indebtedness, to be purchased on a pro rata basis but in denominations
     of $1,000 or multiples of $1,000. ChipPAC International Company Limited
 shall not be required to make an offer to purchase notes, and other
Senior Subordinated Indebtedness, under this covenant if the Net  
      Available Cash available for the offer is less than $10.0 million, which
lesser amount shall be carried forward for purposes of determining
whether an offer is required for the Net Available Cash from any  
subsequent Asset Disposition.                                     

  (c) ChipPAC International Company Limited shall comply with the requirements
   of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of notes under this 
   covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, ChipPAC    
International Company Limited shall comply with the applicable    
      securities laws and regulations and shall not be deemed to have breached
 its obligations under this clause as a result of complying with the
provisions of any securities laws or regulations.                 

Limitation on Affiliate Transactions                                        

(a) We shall not, and shall not permit any Restricted Subsidiary to, enter
    into or permit to exist any transaction, including the purchase, sale,
      lease or exchange of any property, employee compensation arrangements or
the rendering of any service, with any Affiliate of ours involving
aggregate consideration in excess of $2.5 million (an "Affiliate  
Transaction") unless the terms of that transaction:               

   (1) are no less favorable to us or the Restricted Subsidiary than those
         that could be obtained at the time of the transaction in arm's-length
dealings with a Person who is not an Affiliate;             

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    (2) have been approved by a majority of the disinterested members of the
Board of Directors; and                                     

  (3) if the Affiliate Transaction involves an amount in excess of $10.0
million, have been determined by (A) a nationally recognized
       investment banking firm to be fair, from a financial standpoint, to
        us and our Restricted Subsidiaries or (B) an accounting or appraisal
       firm nationally recognized in making determinations of this kind to
    be on terms that are not less favorable to us and our Restricted
        Subsidiaries than the terms that could be obtained in an arms-length
transaction from a Person that is not our Affiliate.        

(b) The provisions of the prior paragraph (a) shall not prohibit;         

(1) any Restricted Payment permitted to be paid under the covenant  
described under "--Limitation on Restricted Payments;"      

  (2) any issuance of securities, or other payments, awards or grants in
      cash, securities or otherwise under, or the funding of, employment
         arrangements, stock options and stock ownership plans approved by the
Board of Directors;                                         

 (3) the grant of stock options or similar rights to our employees and
    directors or those of our Restricted Subsidiaries under plans or
agreements approved by the Board of Directors;              

  (4) loans or advances to employees, directors, officers or consultants
 (A) in the ordinary course of business or (B) otherwise in an
aggregate amount not to exceed $5.0 million in the aggregate
outstanding at any one time;                                

     (5) reasonable fees, compensation or employee benefit arrangements to and
        indemnity provided for the benefit of employees, directors, officers
      or consultants of ours or any Subsidiary in the ordinary course of
business;                                                   

  (6) any transaction exclusively between or among us and our Restricted
       Subsidiaries or between or among Restricted Subsidiaries; provided,
      however, that the transactions are not otherwise prohibited by the
indenture;                                                  

   (7) the payment of management, consulting and advisory fees and related
   expenses made under the Advisory Agreements as in effect on the
    Recapitalization Closing Date and the payment of other customary
        management, consulting and advisory fees and related expenses to the
      Principals and their Affiliates made under any financial advisory,
 financing, underwriting or placement agreement or under other
    investment banking activities, including, without limitation, in
        connection with acquisitions or divestitures which fees and expenses
     are made under arrangements approved by our board of directors or
that of the Restricted Subsidiary in good faith;            

     (8) any Affiliate Transaction with Hyundai Electronics and its Affiliates
      under written agreements in effect on the Recapitalization Closing
         Date and as amended, renewed or extended from time to time; provided,
       however, that any amendment, renewal or extension shall not contain
      terms which are materially less favorable to us and our Restricted
Subsidiaries than those in the agreements in effect on the  
Recapitalization Closing Date;                              

     (9) any agreement with us or any Restricted Subsidiary as in effect as of
        the Recapitalization Closing Date or any amendment or replacement or
        any transaction contemplated thereby, including under any amendment,
 so long as any amendment or replacement agreement is not more
      disadvantageous to us or the Restricted Subsidiary in any material
respect than the original agreement as in effect on the     
Recapitalization Closing Date;                              

   (10)the existence of, or the performance by us or any of our Restricted
    Subsidiaries of obligations under the terms of, the Shareholders
Agreement and any similar agreements which it may enter into
thereafter; provided, however, that the existence of, or the
performance by us or any of our Restricted Subsidiaries of  
        obligations under, any future amendment to any existing agreement or

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         under any similar agreement entered into after the Recapitalization
     Closing Date shall only be permitted by this clause (10) to the
          extent that the terms of the amendment or new agreement are not more
        disadvantageous to us or the Restricted Subsidiary in any material
respect;                                                  

(11) transactions with customers, clients, suppliers, joint venture 
          partners or purchasers or sellers of goods or services, in each case
        in the ordinary course of business, including, without limitation,
          under joint venture agreements, and otherwise in compliance with the
    terms of the indenture which are fair to us and our Restricted
   Subsidiaries, in the reasonable determination of the board of
          directors or the senior management thereof, or are on terms at least
          as favorable as might reasonably have been obtained at the time from
an unaffiliated party; and                                

(12) the issuance or sale of any of our Capital Stock, other than   
Disqualified Stock.                                       

Merger and Consolidation                                                    

 Neither ChipPAC International Company Limited nor we shall consolidate with
or merge with or into, or convey, transfer or lease, in one transaction or a    
series of related transactions, all or substantially all its assets to, any     
Person, unless:                                                                 

(1) the resulting, surviving or transferee Person, that we refer to as a  
     "Successor Company," shall be a Person organized and existing under the
    laws of the British Virgin Islands or of the United States of America,
      any State thereof or the District of Columbia and the Successor Company,
 if not us or ChipPAC International Company Limited, shall expressly
assume, by a supplemental indenture executed and delivered to the 
  trustee, in form satisfactory to the trustee, all the obligations of
   ChipPAC International Company Limited or us, as applicable, under the
indenture and the Company Guaranty or the notes, as applicable;   

(2) immediately after giving effect to the transaction, and treating any  
      Indebtedness which becomes an obligation of the Successor Company or any
      Subsidiary as a result of the transaction as having been Incurred by the
    Successor Company or the Subsidiary at the time of the transaction, no
Default shall have occurred and be continuing;                    

(3) immediately after giving effect to the transaction, (A) the Successor 
      Company would be able to Incur an additional $1.00 of Indebtedness under
paragraph (a) of the covenant described under "--Limitation on    
    Indebtedness" or (B) the Consolidated Coverage Ratio for the Successor
  Company and its Restricted Subsidiaries would be equal to or greater
    than the same ratio for us and our Restricted Subsidiaries immediately
prior to the transaction;                                         

(4) ChipPAC International Company Limited or us, as applicable, shall have
 delivered to the trustee an Officers' Certificate and an Opinion of
      Counsel, each stating that the consolidation, merger or transfer and any
supplemental indenture comply with the indenture;                 

(5) If the merging corporation is organized and existing under the laws of
   the British Virgin Islands and the Successor Company is organized and
existing under the laws of the United States of America, any State
  thereof or the District of Columbia or if the merging corporation is
    organized and existing under the laws of the United States of America,
     any State thereof or the District of Columbia and the Successor Company
     is organized and existing under the laws of the British Virgin Islands,
     which we refer to any of the previous events as a "Foreign Jurisdiction
Merger," ChipPAC International Company Limited or ChipPAC, as     
   applicable, shall have delivered to the trustee an Opinion of Counsel
that the Holders will not recognize income, gain or loss for U.S. 
    Federal income tax purposes as a result of the transaction and will be
     governed by U.S. Federal income tax on the same amounts and at the same
    times as would have been the case if the transaction had not occurred;
and                                                               

(6) In the event of a Foreign Jurisdiction Merger, ChipPAC International  
    Company Limited or ChipPAC, as applicable, shall have delivered to the
  trustee an Opinion of Counsel in the British Virgin Islands or other
   applicable jurisdiction that (A) any payment of interest or principal
under or relating to the notes                                    

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  or the Guaranties will, after the consolidation, merger, conveyance,
   transfer or lease of assets, be exempt from the Taxes described under
"--Withholding Taxes" and (B) no other taxes on income, including 
 capital gains, will be payable under the laws of the British Virgin
 Islands or any other jurisdiction where the Successor Company is or
 becomes organized, resident or engaged in business for tax purposes
 relating to the acquisition, ownership or disposition of the notes,
   including the receipt of interest or principal thereon, provided that
   the holder does not use or hold, and is not deemed to use or hold the
    notes in carrying on a business in the British Virgin Islands or other
jurisdiction where the Successor Company is or becomes organized, 
resident or engaged in business for tax purposes,                 

provided, however, that clause (3) above shall not apply (x) if, in the good    
faith determination of the Board of Directors, whose determination shall be     
evidenced by a resolution of the Board of Directors, the principal purpose and  
effect of the transaction is to change the jurisdiction of incorporation of     
ChipPAC International Company Limited or the Company or (y) in the case of a    
merger of ChipPAC International Company Limited or the Company with or into a   
Wholly Owned Subsidiary of ours.                                                

 The Successor Company shall be the successor to us or ChipPAC International
Company Limited, as the case may be, and shall succeed to, and be substituted   
for, and may exercise every right and power of, ChipPAC International Company   
Limited or us under the indenture, and the predecessor Issuer or Company,       
except in the case of a lease, shall be automatically released from its         
obligations under the Company Guaranty, the notes and the indenture.            

We will not permit any Subsidiary Guarantor to consolidate with or merge  
with or into, or convey, transfer or lease, in one transaction or a series of   
transactions, all or substantially all of its assets to any Person unless:      

(1) the resulting, surviving or transferee Person if not the Subsidiary   
shall be a Person organized and existing under the laws of the    
     jurisdiction under which the Subsidiary was organized or under the laws
      of the United States of America, or any State thereof or the District of
Columbia, and the Person shall expressly assume, by executing a   
  supplemental indenture or Guaranty Agreement, as applicable, all the
 obligations of the Subsidiary under the indenture or its Subsidiary
Guaranty and under the notes and the indenture;                   

 (2) immediately after giving effect to the transaction or transactions on a
pro forma basis, and treating any Indebtedness which becomes an   
     obligation of the resulting, surviving or transferee Person as a result
   of the transaction as having been issued by the Person at the time of
    the transaction, no Default shall have occurred and be continuing; and

(3) we deliver to the trustee an Officers' Certificate and an Opinion of  
      Counsel, each stating that the consolidation, merger or transfer and the
     supplemental indenture or Guaranty Agreement, if any, complies with the
indenture.                                                        

The provisions of clauses (1) and (2) above shall not apply to any one or 
more transactions involving a Subsidiary Guarantor which constitute an Asset    
Disposition if we have complied with the applicable provisions of the covenant  
described under "--Limitation on Sales of Assets and Subsidiary Stock" above.   

Future Guarantors                                                           

If, after the Issue Date, we form or otherwise acquire, directly or       
indirectly, any Restricted Subsidiary, we shall cause the Restricted Subsidiary 
to Guarantee the notes under a Subsidiary Guaranty on the terms and conditions  
in the indenture and the Subsidiary Guaranty Agreement; provided, however, in   
the event we or a Restricted Subsidiary forms or otherwise acquires, directly   
or indirectly, a Restricted Subsidiary organized under the laws of a            
jurisdiction other than the United States and the jurisdiction prohibits by     
law, regulation or order the Restricted Subsidiary from providing a Guarantee,  
we shall use all commercially reasonable efforts, including pursuing required   
waivers, over a period up to one year, to provide the Guarantee; provided,      
however, that we shall not be required to use commercially reasonable efforts   
relating to the subsidiaries for more than a one-year                           

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period or a shorter period as we shall determine in good faith that we have     
used all commercially reasonable efforts. If we or the Restricted Subsidiary is 
unable during the period to obtain an enforceable Guarantee in the              
jurisdiction, then the Restricted Subsidiary shall not be required to provide a 
Guarantee of the notes under to the Subsidiary Guaranty so long as the          
Restricted Subsidiary does not Guarantee any other Indebtedness of ours and our 
Restricted Subsidiaries.                                                        

Limitation on Assets of Non-Subsidiary Guarantors                           

We shall not permit our Restricted Subsidiaries that are not Subsidiary   
Guarantors, excluding ChipPAC Assembly and Test (Shanghai) Company, Ltd. and    
ChipPAC (Shanghai) Company Ltd. or any successors, to collectively hold at any  
one time more than 33 1/3% of the consolidated assets of ours and our           
Restricted Subsidiaries.                                                        

Limitation on Sale of the Capital Stock of ChipPAC International Company    
Limited                                                                     

For so long as any of the notes are outstanding, ChipPAC International    
Company Limited will continue to be, directly or indirectly, a Wholly Owned     
Subsidiary of ours.                                                             

SEC Reports                                                                 

 Whether or not we must comply with the reporting requirements of Section 13
or 15(d) of the Exchange Act, we will file with the SEC and provide the trustee 
and noteholders with annual reports and information, documents and other        
reports as are specified in Sections 13 and 15(d) of the Exchange Act and       
applicable to a U.S. corporation that would be required to make these filings,  
at the times specified for the filings under these Sections. However, we will   
not be required to file any reports, documents or other information if the SEC  
will not accept a filing.                                                       

Defaults                                                                        

Each of the following is an Event of Default:                             

(1) a default in the payment of interest or any Additional Amounts on the 
notes when due, continued for 30 days;                            

  (2) a default in the payment of principal of any note when due at its Stated
      Maturity, upon redemption, upon required repurchase, upon declaration or
otherwise;                                                        

(3) the failure by us, ChipPAC International Company Limited or any       
      Subsidiary Guarantor to comply with its obligations under "--Significant
Covenants--Merger and Consolidation" above;                       

(4) the failure by us or any Restricted Subsidiary to comply for 30 days  
 after notice with any of its obligations in the covenants described
     above under "--Change of Control," other than a failure to purchase the
    exchange notes, or under "--Significant Covenants" under "--Limitation
    on Indebtedness," "--Limitation on Restricted Payments," "--Limitation
on Restrictions on Distributions from Restricted Subsidiaries,"   
  "--Limitation on Sales of Assets and Subsidiary Stock," other than a
      failure to purchase the notes, "--Limitation on Affiliate Transactions,"
"--Future Guarantors," "--Limitation on Assets of Non-Subsidiary  
Guarantors," "--Limitation on Sale of the Capital Stock of ChipPAC
International Company Limited" or "--SEC Reports;"                

(5) the failure by us or any Restricted Subsidiary to comply for 60 days  
       after notice with our or its other agreements contained in the indenture;

(6) Indebtedness of ours, ChipPAC International Company Limited or any    
   Significant Subsidiary is not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof     

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     because of a default and the total amount of the Indebtedness unpaid or
accelerated exceeds $10.0 million which we refer to as the "cross 
acceleration provision;"                                          

(7) events of bankruptcy, insolvency or reorganization of us, ChipPAC     
    International Company Limited or a Significant Subsidiary as specified
 in the indenture, which we refer to as the "bankruptcy provisions;"

(8) any judgment or decree for the payment of money in excess of $10.0    
     million is entered against us, ChipPAC International Company Limited or
   a Significant Subsidiary, remains outstanding for a period of 60 days
      following the judgment and is not discharged, waived or stayed within 10
      days after notice which we refer to as the "judgment default provision;"
or                                                                

(9) the Company Guaranty or any Subsidiary Guaranty of a Significant      
Subsidiary ceases to be in full force and effect, other than in   
 compliance with the terms of the Company Guaranty or the Subsidiary
Guaranty or the ChipPAC or any Significant Subsidiary that is a   
 Subsidiary Guarantor denies or disaffirms its obligations under the
Company Guaranty or its Subsidiary Guaranty, as the case may be.  

However, a default under clauses (4), (5) and (8) will not constitute an  
Event of Default until the trustee or the holders of 25% in principal amount of 
the outstanding notes notify ChipPAC International Company Limited and us of    
the default and ChipPAC International Company Limited or ChipPAC does not cure  
the default within the time specified after receipt of the notice.              

 If an Event of Default occurs and is continuing, the trustee or the holders
of at least 25% in principal amount of the outstanding notes may declare the    
principal of and accrued but unpaid interest on all the notes to be due and     
payable. Upon a declaration, the principal and interest shall be due and        
payable immediately; provided, however, that if upon the declaration there are  
any amounts outstanding under the Credit Agreement and the amounts thereunder   
have not been accelerated, the principal and interest shall be due and payable  
upon the earlier of the time the amounts are accelerated or five Business Days  
after receipt by ChipPAC International Company Limited and us and the           
Representative under the Credit Agreement of the declaration. If an Event of    
Default relating to specific events of bankruptcy, insolvency or reorganization 
of us or ChipPAC International Company Limited occurs and is continuing, the    
principal of and interest on all the notes will become and be immediately due   
and payable without any declaration or other act on the part of the trustee or  
any holders of the notes. The holders of a majority in principal amount of the  
outstanding notes may rescind any acceleration relating to the notes and its    
consequences.                                                                   

Contingent upon the provisions of the indenture relating to the duties of 
the trustee, in case an Event of Default occurs and is continuing, the trustee  
will be under no obligation to exercise any of the rights or powers under the   
indenture at the request or direction of any of the holders of the notes unless 
the holders have offered to the trustee reasonable indemnity or security        
against any loss, liability or expense. Except to enforce the right to receive  
payment of principal, premium, if any, or interest when due, no holder of a     
note may pursue any remedy under the indenture or the notes unless:             

(1) the holder has previously given the trustee notice that an Event of   
Default is continuing;                                            

(2) holders of at least 25% in principal amount of the outstanding notes  
have requested the trustee to pursue the remedy;                  

(3) the holders have offered the trustee reasonable security or indemnity 
against any loss, liability or expense;                           

(4) the trustee has not complied with the request within 60 days after    
receiving the request and the offer of security or indemnity; and 

(5) the holders of a majority in principal amount of the outstanding notes
  have not given the trustee a direction inconsistent with the request
within the 60-day period.                                         

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If conditions in the indenture are met, holders of a majority in principal
amount of the outstanding notes are given the right to direct the time, method  
and place of conducting any proceeding for any remedy available to the trustee  
or of exercising any trust or power conferred on the trustee. The trustee,      
however, may refuse to follow any direction that conflicts with law or the      
indenture or that the trustee determines is unduly prejudicial to the rights of 
any other holder of a note or that would involve the trustee in personal        
liability.                                                                      

The indenture provides that if a Default occurs and is continuing and is  
known to the trustee, the trustee must mail to each holder of the notes notice  
of the Default within 90 days after it occurs. Except in the case of a Default  
in the payment of principal of or interest on any note, the trustee may         
withhold notice if and so long as a committee of its trust officers determines  
that withholding notice is not opposed to the interest of the holders of the    
notes. In addition, ChipPAC International Company Limited is required to        
deliver to the trustee, within 120 days after the end of each fiscal year, a    
certificate indicating whether its signers know of any Default that occurred    
during the previous year. ChipPAC International Company Limited also is         
required to deliver to the trustee, within 30 days, written notice of any event 
which would constitute specific types of Defaults, their status and what action 
ChipPAC International Company Limited is taking or proposes to take.            

Amendments and Waivers                                                          

If conditions in the indenture are met, the indenture may be amended with 
the consent of the holders of a majority in principal amount of the notes then  
outstanding, including consents obtained in connection with a tender offer or   
exchange for the notes, and any past default or compliance with any provisions  
may also be waived with the consent of the holders of a majority in principal   
amount of the notes then outstanding. However, without the consent of each      
holder of an outstanding note so affected, no amendment may:                    

(1) reduce the amount of notes whose holders must consent to an amendment;

(2) reduce the rate of or extend the time for payment of interest on any  
note;                                                             

(3) reduce the principal of or extend the Stated Maturity of any note;    

  (4) reduce the premium payable upon the redemption of any note or change the
   time at which any note may be redeemed as described under "--Optional
Redemption" or "--Redemption for Changes in British Virgin Islands
Withholding Taxes" above;                                         

(5) make any note payable in money other than that stated in the note;    

(6) impair the right of any holder of the notes to receive payment of     
 principal of and interest on the holder's notes on or after the due
    dates therefor or to institute suit for the enforcement of any payment
on or relating to the holder's notes;                             

 (7) make any change in the amendment provisions which require each holder's
consent or in the waiver provisions; or                           

 (8) make any change in the Company Guaranty or any Subsidiary Guaranty that
would adversely affect the Noteholders.                           

 In addition, any amendment to the subordination provisions of the indenture
that would adversely affect the holders of the notes will require the consent   
of the holders of at least 75% in aggregate principal amount of the notes then  
outstanding. However, no amendment may be made to the subordination provisions  
of the indenture that adversely affects the rights of any holder of Senior      
Indebtedness then outstanding unless the holders of that Senior Indebtedness,   
or their Representative, consents to the change.                                

Without the consent of any holder of the notes, ChipPAC International     
Company Limited and trustee may amend the indenture to cure any ambiguity,      
omission, defect or inconsistency, to provide for the assumption by a successor 
corporation of the obligations of ChipPAC International Company Limited under   
the indenture, provided, that ChipPAC International Company Limited or ChipPAC  
delivers to the trustee the Opinions of                                         

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Counsel described in clauses five and six of "Significant Covenants--Merger and 
Consolidation" if the opinions are required by the provisions of these clauses, 
to provide for uncertificated notes in addition to or in place of certificated  
notes, provided that the uncertificated notes are issued in registered form for 
purposes of Section 163(f) of the Code, or in a manner that the uncertificated  
notes are described in Section 163(f)(2)(B) of the Code, to add guarantees of   
the notes, to release a Subsidiary Guaranty when permitted by the indenture, to 
secure the notes, to add to our covenants and those of our Restricted           
Subsidiaries for the benefit of the holders of the notes or to surrender any    
right or power conferred upon us and our Restricted Subsidiaries, to make any   
change that does not adversely affect the rights of any holder of the notes or  
to comply with any requirement of the SEC in connection with the qualification  
of the indenture under the Trust Indenture Act.                                 

  The consent of the holders of the notes is not necessary under the indenture
to approve the particular form of any proposed amendment. It is sufficient if   
the consent approves the substance of the proposed amendment.                   

After an amendment under the indenture becomes effective, ChipPAC         
International Company Limited is required to mail to holders of the notes a     
notice briefly describing the amendment. However, the failure to give notice to 
all holders of the notes, or any defect in the notice, will not impair or       
affect the validity of the amendment.                                           

Transfer                                                                        

The notes will be issued in registered form and will be transferable only 
upon the surrender of the notes being transferred for registration of transfer. 
ChipPAC International Company Limited may require payment of a sum sufficient   
to cover any tax, assessment or other governmental charge payable in connection 
with transfers and exchanges.                                                   

Defeasance                                                                      

 ChipPAC International Company Limited and ChipPAC at any time may terminate
all of our obligations under the notes and the indenture, which we refer to as  
"legal defeasance," except for obligations respecting the defeasance trust and  
obligations to register the transfer or exchange of the notes, to replace       
mutilated, destroyed, lost or stolen notes and to maintain a registrar and      
paying agent for the notes. ChipPAC International Company Limited or ChipPAC at 
any time may terminate our obligations under "--Change of Control" and under    
the covenants described under "--Significant Covenants," other than the         
covenant described under "--Merger and Consolidation," the operation of the     
cross acceleration provision, the bankruptcy provisions relating to Significant 
Subsidiaries and the judgment default provision described under "--Defaults"    
above and the limitations contained in clause (3) of the first paragraph under  
"--Significant Covenants--Merger and Consolidation" above, which we refer to as 
"covenant defeasance."                                                          

ChipPAC International Company Limited and ChipPAC may exercise our legal  
defeasance option notwithstanding the prior exercise of their covenant          
defeasance option. If ChipPAC International Company Limited or ChipPAC          
exercises its legal defeasance option, payment of the notes may not be          
accelerated because of an Event of Default. If ChipPAC International Company    
Limited or ChipPAC exercises its covenant defeasance option, payment of the     
notes may not be accelerated because of an Event of Default specified in clause 
(4), clause (6), clause (7) with respect only to Significant Subsidiaries or    
clause (8) under "--Defaults" above or because of the failure of us to comply   
with clause (3) of the first paragraph under "--Significant Covenants--Merger   
and Consolidation" above or the failure of ChipPAC International Company        
Limited or any Subsidiary Guarantor to comply with the limitation under the     
third paragraph under "--Significant Covenants--Merger and Consolidation"       
above. If ChipPAC International Company Limited or ChipPAC exercises its legal  
defeasance option or its covenant defeasance option, we and each Subsidiary     
Guarantor will be released from all of our obligations relating to the Company  
Guaranty or its Subsidiary Guaranty, as the case may be.                        

  In order to exercise either defeasance option, ChipPAC International Company
Limited or ChipPAC must irrevocably deposit in trust, which we refer to as the  
"defeasance trust," with the trustee money or                                   

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U.S. Government Obligations for the payment of principal and interest on the    
notes to redemption or maturity, as the case may be, and must comply with other 
conditions, including delivery to the trustee of                                

(i) an Opinion of Counsel that holders of the notes will not recognize    
      income, gain or loss for U.S. Federal income tax purposes as a result of
    the deposit and defeasance and will be governed by U.S. Federal income
  tax on the same amounts, in the same manner and at the same times as
      would have been the case if the deposit and defeasance had not occurred,
    and, in the case of legal defeasance only, the Opinion of Counsel must
     be based on a ruling of the Internal Revenue Service or other change in
applicable U.S. Federal income tax law, and                       

(ii) an Opinion of Counsel in each of the British Virgin Islands and any    
  other jurisdiction in which ChipPAC International Company Limited or
    ChipPAC is organized, resident or engaged in business for tax purposes
that:                                                             

(A) holders of the notes will not recognize income gain or loss for 
     purposes of the tax laws of the jurisdiction as a result of legal
         defeasance or covenant defeasance, as applicable, and will be subject
      for purposes of the tax laws of that jurisdiction to income tax on
       the same amounts, in the same manner and at the same times as would
         have been the case if legal defeasance or covenant defeasance had not
occurred; and                                               

  (B) payments from the defeasance trust will be free or exempt from any
 and all withholding and other taxes of whatever nature of the
        jurisdiction or any political subdivision or taxing authority except
   in the case of a payment made to a holder which can be taxed by
       reason of the holder's carrying on a business in the British Virgin
Islands or other jurisdiction.                              

Concerning the Trustee                                                          

  U.S. Bank, N.A. is the trustee under the indenture and will be the registrar
and paying agent with regard to the notes.                                      

 The holders of a majority in principal amount of the outstanding notes will
have the right to direct the time, method and place of conducting any           
proceeding for exercising any remedy available to the trustee, with exceptions  
provided in the indenture. The indenture provides that if an Event of Default   
occurs and is not cured, the trustee will be required, in the exercise of its   
power, to use the degree of care of a prudent person in the conduct of his own  
affairs. The trustee will be under no obligation to exercise any of its rights  
or powers under the indenture at the request of any holder of notes, unless the 
holder shall have offered to the trustee security and indemnity satisfactory to 
it against any loss, liability or expense and then only to the extent required  
by the terms of the indenture.                                                  

Governing Law                                                                   

  The indenture provides that it and the notes will be governed by the laws of
the State of New York without giving effect to conflicts of laws rules.         

Enforceability of Judgments                                                     

Since substantially all of the operating assets of ChipPAC International  
Company Limited, ChipPAC and their Subsidiaries are outside the United States,  
any judgment obtained in the United States against ChipPAC International        
Company Limited, ChipPAC or a Subsidiary Guarantor, including judgments         
relating to the payment of principal, interest, Additional Amounts, redemption  
price and any purchase price of the notes, may not be collectible within the    
United States.                                                                  

ChipPAC International Company Limited has been informed by its British    
Virgin Island counsel, Harney Westwood & Riegels, that in its opinion the       
applicable laws of the British Virgin Islands permit an action to be            

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brought in a court of competent jurisdiction in the British Virgin Islands on a 
final and conclusive judgment in personam of a United States federal court or a 
court of the State of New York sitting in the Borough of Manhattan in The City  
of New York, respecting the enforcement of the notes or the indenture,          
including the Company Guaranty and the Subsidiary Guaranties, that is not       
impeachable as void or voidable under the laws of the State of New York and     
that is for a specified sum in money if:                                        

.  the New York court that rendered the judgment has jurisdiction over the  
    judgment debtor, as recognized by the courts of the British Virgin Islands
   and in compliance with the British Virgin Islands' conflict of laws rules
    and submission by ChipPAC International Company Limited, ChipPAC, Inc. and
   the Subsidiary Guarantors in the indenture to the jurisdiction of the New
York court will be sufficient for this purpose;                       

.  the judgment was not obtained by fraud or in a manner contrary to natural
   justice and the enforcement thereof would not be inconsistent with public
policy, as that term is understood under the applicable laws of the   
British Virgin Islands;                                               

.  the enforcement of the judgment does not constitute, directly or         
 indirectly, the enforcement of foreign revenue, expropriator, public or
penal laws;                                                           

.  no new admissible evidence relevant to the action is discovered prior to 
the rendering of judgment by the British Virgin Islands; and          

 .  the action to enforce the judgment is commenced within six years after the
date of the judgment.                                                 

Furthermore, ChipPAC International Company Limited has been advised by its
counsel that they do not know of any reason under present laws of the British   
Virgin Islands for avoiding recognition of the judgment of New York court under 
the indenture, including the Company Guaranty and the Subsidiary Guaranties, or 
on the notes based upon a reasonable interpretation of public policy.           

Consent to Jurisdiction and Service                                             

The indenture provides that ChipPAC International Company Limited, ChipPAC
and each Subsidiary Guarantor will appoint CT Corporation System, 1633          
Broadway, New York, New York 10019 as its agent for actions brought under       
Federal or state securities laws brought in any Federal or state court located  
in the Borough of Manhattan in The City of New York and will submit to that     
jurisdiction.                                                                   

Definitions                                                                     

"Additional Assets" means:                                                

 (1) any property or assets, other than Indebtedness and Capital Stock, in a
Related Business;                                                 

 (2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a
      result of the acquisition of the Capital Stock by the Company or another
Restricted Subsidiary; or                                         

(3) Capital Stock constituting a minority interest in any Person that is a
Restricted Subsidiary;                                            

provided, however, that the Restricted Subsidiary described in clauses (2) or   
(3) above is primarily engaged in a Related Business.                           

"Advisory Agreements" mean each of the advisory agreements by and between 
ChipPAC, Inc., ChipPAC Limited, ChipPAC International Company Limited and each  
Principal entered into on the Recapitalization Closing Date, as the same may be 
amended from time to time in a manner that is not more disadvantageous to us in 
any material respect than the original agreement as in effect on the            
Recapitalization Closing Date.                                                  

"Affiliate" of any specified Person means any other Person, directly or   
indirectly, controlling or controlled by or under direct or indirect common     
control with the specified Person. For the purposes of this definition,         

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"control" when used relating to any Person means the power to direct the        
management and policies of Person, directly or indirectly, whether through the  
ownership of voting securities, by contract or otherwise; and the terms         
"controlling" and "controlled" have correlative meanings. For purposes of the   
provisions described under "--Significant Covenants--Limitation on Restricted   
Payments," "--Significant Covenants--Limitation on Affiliate Transactions" and  
"--Significant Covenants--Limitation on Sales of Assets and Subsidiary Stock"   
only, "Affiliate" shall also mean any beneficial owner of Capital Stock         
representing 10% or more of the total voting power of our Voting Stock, on a    
fully diluted basis, or of rights or warrants to purchase the Capital Stock,    
whether or not currently exercisable and any Person who would be an Affiliate   
of the beneficial owner under the first sentence of this definition.            

"Asset Disposition" means any sale, lease, other than operating leases    
entered into in the ordinary course of business, transfer or other disposition, 
or series of related sales, leases, transfers or dispositions by us or any      
Restricted Subsidiary, including any disposition by means of a merger,          
consolidation or similar transaction, each referred to for the purposes of this 
definition as a "disposition," of (1) any shares of Capital Stock of a          
Restricted Subsidiary, other than directors' qualifying shares or shares        
required by applicable law to be held by a Person other than us or a Restricted 
Subsidiary, (2) all or substantially all the assets of any division or line of  
business of ours or any Restricted Subsidiary or (3) any other assets of ours   
or any Restricted Subsidiary outside of the ordinary course of our business or  
that of the Restricted Subsidiary, other than, in the case of (1), (2) and      
(3) above, (w) a disposition by a Restricted Subsidiary to us or by us or a     
Restricted Subsidiary to a Restricted Subsidiary, (x) for purposes of the       
covenant described under "--Significant Covenants--Limitation on Sales of       
Assets and Subsidiary Stock" only, a disposition that constitutes a Restricted  
Payment permitted by the covenant described under "--Significant                
Covenants--Limitation on Restricted Payments," (y) sales or other dispositions  
of obsolete, uneconomical, negligible, worn-out or surplus assets in the        
ordinary course of business, including but not limited to equipment and         
intellectual property and (z) disposition of assets with a fair market value of 
less than $1,000,000; provided, however, that a disposition of all or           
substantially all of our assets and our Restricted Subsidiaries taken as a      
whole will be governed by the provisions of the indenture described above under 
the caption "--Change of Control" and/or the provisions described above under   
the caption "--Merger and Consolidation" and not by the provisions of the       
"--Limitation on Sales of Assets and Subsidiary Stock" covenant.                

"Attributable Debt" relating to a Sale/Leaseback Transaction means, as at 
the time of determination, the present value (discounted at the interest rate   
borne by the notes, compounded annually) of the total obligations of the lessee 
for rental payments during the remaining term of the lease included in the      
Sale/Leaseback Transaction, including any period for which the lease has been   
extended.                                                                       

"Average Life" means, as of the date of determination, relating to any    
Indebtedness or Preferred Stock, the quotient obtained by dividing: (1) the sum 
of the products of the numbers of years from the date of determination to the   
dates of each successive scheduled principal payment of the Indebtedness or     
redemption or similar payment relating to the Preferred Stock multiplied by the 
amount of the payment by (2) the sum of all the payments.                       

"Bain" means Bain Capital, Inc.                                           

"Banks" has the meaning specified in the Credit Agreement.                

"Bank Indebtedness" means all Obligations under the Credit Agreement.     

"Board of Directors" means the Board of Directors of ChipPAC or any       
committee of the Board duly authorized to act on behalf of the Board.           

"Business Day" means each day other than a Saturday, Sunday or a day on   
which commercial banking institutions are authorized or required by law to      
close in New York City.                                                         

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"Capital Expenditure Facility" means the capital expenditure facility     
contained in the Credit Agreement.                                              

"Capital Lease Obligations" means an obligation that is required to be    
classified and accounted for as a capital lease for financial reporting purpose 
compliance with GAAP, and the amount of Indebtedness represented by the         
obligation shall be the capitalized amount of the obligation determined in      
compliance with GAAP; and the Stated Maturity of the obligation shall be the    
date of the last payment of rent or any other amount due under the lease prior  
to the first date upon which the lease may be terminated by the lessee without  
payment of a penalty.                                                           

  "Capital Stock" of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or          
interests in, however designated, equity of the Person, including any Preferred 
Stock, but excluding any debt securities convertible into equity.               

"Code" means the Internal Revenue Code of 1986, as amended.               

"Company Guaranty" means the Guarantee by us of ChipPAC International     
Company Limited's obligations relating to the notes contained in the indenture. 

"Consolidated Coverage Ratio" as of any date of determination means the   
ratio of (a) the aggregate amount of EBITDA for the period of the most recent   
four consecutive fiscal quarters for which internal financial statements are    
available ending on or prior to the date of determination to (b) Consolidated   
Interest Expense for the four fiscal quarters; provided, however, that:         

(1) if ChipPAC or any Restricted Subsidiary has Incurred any Indebtedness 
  since the beginning of the period that remains outstanding or if the
transaction giving rise to the need to calculate the Consolidated 
  Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
    Consolidated Interest Expense for the period shall be calculated after
giving effect on a pro forma basis to the Indebtedness as if the  
   Indebtedness had been Incurred on the first day of the period and the
  discharge of any other Indebtedness repaid, repurchased, defeased or
      otherwise discharged with the proceeds of the new Indebtedness as if the
discharge had occurred on the first day of the period;            

(2) if ChipPAC or any Restricted Subsidiary has repaid, repurchased,      
      defeased or otherwise discharged any Indebtedness since the beginning of
      the period or if any Indebtedness is to be repaid, repurchased, defeased
    or otherwise discharged (in each case other than Indebtedness Incurred
  under any revolving credit facility unless the Indebtedness has been
permanently repaid and has not been replaced) on the date of the  
transaction giving rise to the need to calculate the Consolidated 
     Coverage Ratio, EBITDA and Consolidated Interest Expense for the period
shall be calculated on a pro forma basis as if the discharge had  
occurred on the first day of the period and as if ChipPAC or the  
      Restricted Subsidiary has not earned the interest income actually earned
      during the period relating to cash or Temporary Cash Investments used to
 repay, repurchase, defease or otherwise discharge the Indebtedness;

(3) if since the beginning of the period we or any Restricted Subsidiary  
    shall have made any Asset Disposition, the EBITDA for the period shall
be reduced by an amount equal to the EBITDA, if positive, directly
attributable to the assets which are the subject of the Asset     
Disposition for the period, or increased by an amount equal to the
EBITDA, if negative, directly attributable for the period and     
 Consolidated Interest Expense for the period shall be reduced by an
     amount equal to the Consolidated Interest Expense directly attributable
to any Indebtedness of ours or any Restricted Subsidiary repaid,  
  repurchased, defeased or otherwise discharged relating to us and our
continuing Restricted Subsidiaries in connection with the Asset   
    Disposition for the period (or, if the Capital Stock of any Restricted
  Subsidiary is sold, the Consolidated Interest Expense for the period
    directly attributable to the Indebtedness of the Restricted Subsidiary
to the extent we and our continuing Restricted Subsidiaries are no
longer liable for the Indebtedness after the sale);               

(4) if since the beginning of the period ChipPAC or any Restricted        
      Subsidiary, by merger or otherwise, shall have made an Investment in any
Restricted Subsidiary, or any person which becomes a Restricted   

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   Subsidiary, or an acquisition of assets, including any acquisition of
assets occurring in connection with a transaction requiring a     
      calculation to be made hereunder, which constitutes all or substantially
      all of an operating unit of a business, EBITDA and Consolidated Interest
     Expense for the period shall be calculated after giving their pro forma
effect, including the Incurrence of any Indebtedness, as if the   
    Investment or acquisition occurred on the first day of the period; and

(5) if since the beginning of the period any Person, that subsequently    
 became a Restricted Subsidiary or was merged with or into us or any
      Restricted Subsidiary since the beginning of the period, shall have made
 any Asset Disposition, any Investment or acquisition of assets that
     would have required an adjustment under clause (3) or (4) above if made
by us or a Restricted Subsidiary during the period, EBITDA and    
    Consolidated Interest Expense for the period shall be calculated after
      giving their pro forma effect as if the Asset Disposition, Investment or
acquisition occurred on the first day of the period.              

  For purposes of this definition, whenever pro forma effect is to be given to
an acquisition or disposition of assets, the amount of income or earnings       
relating to the acquisition or disposition and the amount of Consolidated       
Interest Expense associated with any Indebtedness Incurred in connection with,  
the acquisition or disposition, the pro forma calculations shall be determined  
in good faith by a responsible financial or accounting Officer of ChipPAC and   
shall include any applicable Pro Forma Cost Savings. If any Indebtedness bears  
a floating rate of interest and is being given pro forma effect, the interest   
of the Indebtedness shall be calculated as if the rate in effect on the date of 
determination had been the applicable rate for the entire period, taking into   
account any Interest Rate Agreement applicable to the Indebtedness if the       
Interest Rate Agreement has a remaining term in excess of 12 months.            

"Consolidated Interest Expense" means, for any period, our total interest 
expense and that of our consolidated Restricted Subsidiaries determined in      
compliance with GAAP, plus, to the extent not included in total interest        
expense, and to the extent incurred by us or our Restricted Subsidiaries,       
without duplication:                                                            

(1) interest expense attributable to Capital Lease Obligations and the    
interest expense attributable to leases constituting part of a    
     Sale/Leaseback Transaction, in each case, determined in compliance with
GAAP;                                                             

(2) amortization of debt discount and debt issuance cost;                 

(3) capitalized interest;                                                 

(4) non-cash interest expenses;                                           

(5) commissions, discounts and other fees and charges owed relating to    
letters of credit and bankers' acceptance financing;              

(6) net costs associated with Hedging Obligations involving any Interest  
   Rate Agreement, including amortization of fees, determined compliance
GAAP;                                                             

(7) dividends paid in cash or Disqualified Stock relating to (A) all      
Preferred Stock of Restricted Subsidiaries and (B) all of our     
  Disqualified Stock, in each case, held by Persons other than us or a
Wholly Owned Subsidiary;                                          

(8) interest actually paid by us or a Restricted Subsidiary under any     
Guarantee of Indebtedness of any other Person; and                

(9) the cash contributions to any employee stock ownership plan or similar
    trust to the extent the contributions are used by the plan or trust to
 pay interest or fees to any Person other than us in connection with
Indebtedness Incurred by the plan or trust;                       

and less, to the extent included in total interest expense, (A) the             
amortization during the period of capitalized financing costs associated with   
the recapitalization and the financing of the recapitalization and (B) the      
amortization during the period of other capitalized financing costs.            

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"Consolidated Net Income" means, for any period, the net income of us and 
our consolidated Subsidiaries determined in compliance with GAAP; provided,     
however, that there shall not be included in the Consolidated Net Income:       

(1) any net income of any Person other than us if the Person is not a     
Restricted Subsidiary, except that (A) limited by the exclusion   
contained in clause (4) below, our equity in the net income of the
      Person for the period shall be included in Consolidated Net Income up to
    the aggregate amount of cash actually distributed by the Person during
the period to us or a Restricted Subsidiary as a dividend or other
   distribution subject, in the case of a dividend or other distribution
     paid to a Restricted Subsidiary, to the limitations contained in clause
     (3) below and (B) our equity in a net loss of the Person for the period
shall be included in determining the Consolidated Net Income;     

  (2) any net income or loss of any Person acquired by us or a Subsidiary in a
      pooling of interests transaction for any period prior to the date of the
acquisition;                                                      

  (3) any net income of any Restricted Subsidiary if the Restricted Subsidiary
    is restricted, directly or indirectly, in its ability to pay dividends
   or make distributions, directly or indirectly, to us, except that (A)
   limited by the exclusion contained in clause (4) below, our equity in
 the net income of the Restricted Subsidiary for the period shall be
    included in Consolidated Net Income up to the aggregate amount of cash
      that could have been distributed by the Restricted Subsidiary consistent
   with these restrictions during the period to us or another Restricted
      Subsidiary as a dividend or other distribution subject, in the case of a
      dividend or other distribution paid to another Restricted Subsidiary, to
  the limitation contained in this clause, and (B) our equity in a net
    loss of any the Restricted Subsidiary for the period shall be included
in determining Consolidated Net Income;                           

(4) any gain or loss realized upon the sale or other disposition of any of
   our assets or those of our consolidated Subsidiaries, including under
any sale-and-leaseback arrangement, which is not sold or otherwise
 disposed of in the ordinary course of business and any gain or loss
     realized upon the sale or other disposition of any Capital Stock of any
Person;                                                           

 (5) any extraordinary or unusual gains or losses and the related tax effect
in compliance with GAAP;                                          

 (6) any translation gains and losses due solely to fluctuations in currency
values and the related tax effect in compliance with GAAP;        

(7) any cash charges resulting from the recapitalization to the extent the
cash charges are paid or payable by Hyundai Electronics, Hyundai  
Electronics America or any of their Affiliates; or                

(8) the cumulative effect of a change in accounting principles.           

  Notwithstanding these provisions, for the purposes of the covenant described
under "--Significant Covenants--Limitation on Restricted Payments" only, there  
shall be excluded from Consolidated Net Income any dividends, repayments of     
loans or advances or other transfers of assets from Unrestricted Subsidiaries   
to us or a Restricted Subsidiary to the extent the dividends, repayments or     
transfers increase the amount of Restricted Payments permitted under the        
covenant under clause (a)(3)(D) thereof.                                        

"Credit Agreement" means the Credit Agreement entered into by and among   
ChipPAC International Company Limited, ChipPAC, most of its Subsidiaries, the   
lenders referred to therein and Credit Suisse First Boston, as Administrative   
Agent, together with the related documents, including without limitation the    
term loans and revolving loans thereunder, any guarantees and security          
documents, as amended, extended, renewed, restated, supplemented or otherwise   
modified, in whole or in part, and without limitation as to amount, terms,      
conditions, covenants and other provisions, from time to time, and any          
agreement, and related document governing Indebtedness incurred to refund or    
refinance, in whole or in part, the borrowings and commitments then outstanding 
or permitted to be outstanding under the Credit Agreement or a successor Credit 
Agreement, whether by the same or any other lender or group of lenders.         

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"Currency Agreement" of a Person means any foreign exchange contract,     
currency swap agreement or other similar agreement to which the Person is a     
party or beneficiary.                                                           

"CVC" means Citicorp Venture Capital, Ltd.                                

"Default" means any event which is, or after notice or passage of time or 
both would be, an Event of Default.                                             

"Designated Senior Indebtedness" of any Person means:                     

(1) the Bank Indebtedness of the Person; provided, however, that Bank     
    Indebtedness outstanding under any Credit Agreement that is Refinanced
     in part, but not in whole, the previously outstanding Bank Indebtedness
  shall only constitute Designated Senior Indebtedness if it meets the
requirements of succeeding clause (2); and                        

(2) any other Senior Indebtedness of the Person which, at the date of     
 determination, has an aggregate principal amount outstanding of, or
 under which, at the date of determination, the holders of the other
     Senior Indebtedness are committed to lend up to, at least $10.0 million
and is specifically designated by the Person in the instrument    
   evidencing or governing the Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of the indenture.                      

"Disqualified Stock" of any Person means any Capital Stock which by its   
terms, or by the terms of any security into which it is convertible or for      
which it is exchangeable, or upon the happening of any event:                   

 (1) matures or is mandatorily redeemable under a sinking fund obligation or
otherwise;                                                        

   (2) is convertible or exchangeable for Indebtedness or Disqualified Stock; or

 (3) is redeemable at the option of the holder of the Disqualified Stock, in
    whole or in part, in each case on or prior to the first anniversary of
the Stated Maturity of the notes;                                 

provided, however, that any Capital Stock that would not constitute             
Disqualified Stock but for provisions giving its holders the right to require   
the Person to repurchase or redeem the Capital Stock upon the occurrence of an  
"asset sale" or "change of control" occurring prior to the first anniversary of 
the Stated Maturity of the notes shall not constitute Disqualified Stock if the 
"asset sale" or "change of control" provisions applicable to the Capital Stock  
are not more favorable to the holders of the Capital Stock than the provisions  
described under "--Change of Control" and under "--Significant                  
Covenants--Limitation on Sales of Assets and Subsidiary Stock." Notwithstanding 
these provisions, the Intel Preferred Stock as in effect on the date of         
issuance will not be considered to be Disqualified Stock.                       

"EBITDA" for any period means the sum of Consolidated Net Income, plus    
Consolidated Interest Expense plus the following in the amount deducted in      
calculating Consolidated Net Income, without duplication:                       

(1) all income tax expense of ours and our consolidated Restricted        
Subsidiaries;                                                     

(2) depreciation expense of ours and our consolidated Restricted          
Subsidiaries;                                                     

(3) amortization expense of ours and our consolidated Restricted          
      Subsidiaries, excluding amortization expense other than the amortization
      of capitalized financing costs, attributable to a prepaid cash item that
was paid in a prior period; and                                   

(4) all other non-cash charges of ours and our consolidated Restricted    
   Subsidiaries, excluding any the non-cash charge in the amount that it
     represents an accrual of or reserve for cash expenditures in any future
period;                                                           

in each case for the period. Notwithstanding these provisions, the provision    
for taxes based on the income or profits of, and the depreciation and           
amortization and non-cash charges of, a Restricted Subsidiary shall be added    

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to Consolidated Net Income to compute EBITDA only in an amount that and in the  
same proportion that the net income of the Restricted Subsidiary was included   
in calculating Consolidated Net Income and only if a corresponding amount would 
be permitted at the date of determination to be dividended to us by the         
Restricted Subsidiary without prior approval that has not been obtained, under  
the terms of its charter and all agreements, instruments, judgments, decrees,   
orders, statutes, rules and governmental regulations applicable to the          
Restricted Subsidiary or its stockholders.                                      

"Equity Offering" means a primary offering of our Capital Stock other than
Disqualified Stock.                                                             

"Exchange Act" means the Securities Exchange Act of 1934, as amended.     

"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those provided in:      

(1) the opinions and pronouncements of the Accounting Principles Board of 
the American Institute of Certified Public Accountants;           

(2) statements and pronouncements of the Financial Accounting Standards   
Board; and                                                        

 (3) other statements by other entities as approved by a significant segment
of the accounting profession.                                     

All ratios and computations based on GAAP contained in the indenture shall
be computed in conformity with GAAP.                                            

"Guarantee" means any obligation, contingent or otherwise, of any Person  
directly or indirectly guaranteeing any Indebtedness of any Person and any      
obligation, direct or indirect, contingent or otherwise, of the Person:         

(1) to purchase or pay or advance or supply funds for the purchase or     
    payment of the Indebtedness or other obligation of the Person, whether
arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to  
     take-or-pay or to maintain financial statement conditions or otherwise;
or                                                                

  (2) entered into for the purpose of assuring in any other manner the obligee
      of the Indebtedness of the payment of the Indebtedness or to protect the
obligee against loss of the Indebtedness in whole or in part;     

provided, however, that the term "Guarantee" shall not include endorsements for 
collection or deposit or standard contractual indemnities, in each case, in the 
ordinary course of business. The term "Guarantee" used as a verb has a          
corresponding meaning.                                                          

"Guaranty" means the Company Guaranty and each Subsidiary Guaranty, as    
applicable.                                                                     

"Guaranty Agreement" means a supplemental indenture, in a form reasonably 
satisfactory to the trustee, providing for a Guaranty by a Subsidiary Guarantor.

"Hedging Obligations" of any Person means the obligations of the Person   
under any Interest Rate Agreement or Currency Agreement.                        

  "holder" or "noteholder" means the Person in whose name a note is registered
on the Registrar's books.                                                       

  "Hyundai Earn-out" means the cash payment to Hyundai Electronics of up to an
additional $55.0 million during the four-year period following January 1, 1999  
in the event we exceed levels of EBITDA specified in the Recapitalization       
Agreement; provided, however, in the event the final $20.0 million of the $55.0 
million in cash is required to be paid to Hyundai Electronics, it shall be paid 
by the mandatory redemption of an equal amount of Hyundai Preferred Stock.      

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"Hyundai Electronics" means Hyundai Electronics Industries Company Ltd., a
Republic of Korea corporation.                                                  

"Hyundai Preferred Stock" means the 12.5% mandatorily redeemable Preferred
Stock issued to Hyundai Electronics and/or Hyundai Electronics America in       
connection with the recapitalization.                                           

"Incur" means issue, assume, Guarantee, incur or otherwise become liable  
for; provided, however, that any Indebtedness or Capital Stock of a Person      
existing at the time the Person becomes a Subsidiary (whether by merger,        
consolidation, acquisition or otherwise) will be considered to be Incurred by   
the Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when  
used as a noun shall have a correlative meaning. The accretion of principal of  
a non-interest bearing or other discount security, and the issuance as interest 
or dividend payments of pay-in-kind securities having identical terms to the    
underlying security and which pay-in-kind securities were contemplated on the   
issue date of the underlying security, in each case shall not be deemed the     
Incurrence of Indebtedness.                                                     

"Indebtedness" of any Person on any date of determination means, without  
duplication:                                                                    

 (1) the principal of and premium, if any, of (A) indebtedness of the Person
     for money borrowed and (B) indebtedness evidenced by notes, debentures,
    bonds or other similar instruments for the payment of which the Person
is responsible or liable;                                         

  (2) all Capital Lease Obligations of the Person and all Attributable Debt of
Sale/Leaseback Transactions entered into by the Person;           

  (3) all obligations of the Person issued or assumed as the deferred purchase
   price of property, all conditional sale obligations of the Person and
    all obligations of the Person under any title retention agreement, but
  excluding trade accounts and accrued expenses payable arising in the
ordinary course of business;                                      

(4) all obligations of the Person for the reimbursement of any obligor on 
      any letter of credit, banker's acceptance or similar credit transaction,
  other than obligations under letters of credit securing obligations,
other than obligations described in clauses (1) through (3) above,
  entered into in the ordinary course of business of the Person to the
      extent the letters of credit are not drawn upon or, if and to the extent
    drawn upon, the drawing is reimbursed no later than the tenth Business
Day following payment on the letter of credit;                    

 (5) the amount of all obligations of the Person relating to the redemption,
     repayment or other repurchase of any Disqualified Stock or, relating to
   any Subsidiary of the Person, the liquidation preference relating to,
      any Preferred Stock, but excluding, in each case, any accrued dividends;

(6) all obligations of the type referred to in clauses (1) through (5) of 
 other Persons and all dividends of other Persons for the payment of
     which, in either case, the Person is responsible or liable, directly or
   indirectly, as obligor, guarantor or otherwise, including by means of
any Guarantee;                                                    

(7) all obligations of the type referred to in clauses (1) through (6) of 
other Persons secured by any Lien on any property or asset of the 
 Person, whether or not the obligation is assumed by the Person, the
    amount of the obligation being deemed to be the lesser of the value of
    the property or assets or the amount of the obligation so secured; and

(8) to the extent not otherwise included in this definition, Hedging      
Obligations of the Person.                                        

The amount of Indebtedness of any Person at any date shall be the         
outstanding balance at the date of all unconditional obligations as described   
above and the maximum liability, upon the occurrence of the contingency giving  
rise to the obligation, of any contingent obligations at the date; provided,    
however, that the amount outstanding at any time of any Indebtedness issued     
with original issue discount will be considered to be the face amount of the    
Indebtedness less the remaining unamortized portion of the original issue       
discount of the indebtedness at the time as determined in compliance with GAAP. 

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"Intel" means Intel Corporation.                                          

  "Intel Preferred Stock" means the 10.0% convertible Preferred Stock issuable
to Intel under to the Stock Purchase Agreement dated August 5, 1999 by and      
between Intel and ChipPAC, Inc.                                                 

"Interest Rate Agreement" of a Person means any interest rate swap        
agreement, interest rate cap agreement or other financial agreement or          
arrangement designed to protect the Person against fluctuations in interest     
rates.                                                                          

"Investment" by any Person means all investments by the Person in other   
Persons in the forms of any direct or indirect advance, loan other than (A)     
advances to customers in the ordinary course of business that are recorded as   
accounts receivable on the balance sheet of the lender and (B) commission,      
travel and similar advances to officers and employees made in the ordinary      
course of business, or other extensions of credit, including by way of          
Guarantee or similar arrangement, or capital contribution to, by means of any   
transfer of cash or other property to others or any payment for property or     
services for the account or use of others, or any purchase or acquisition of    
Capital Stock, Indebtedness or other similar instruments issued by the other    
Person. For purposes of the definition of "Unrestricted Subsidiary," the        
definition of "Restricted Payment" and the covenant described under             
"--Significant Covenants--Limitation on Restricted Payments":                   

(1) "Investment" shall include the portion, proportionate to our equity   
    interest in the Subsidiary, of the fair market value of the net assets
    of any Subsidiary of our at the time that the Subsidiary is designated
      an Unrestricted Subsidiary; provided, however, that upon a redesignation
    of the Subsidiary as a Restricted Subsidiary, we will be considered to
     continue to have a permanent "Investment" in an Unrestricted Subsidiary
   equal to an amount, if positive, equal to (x) our "Investment" in the
Subsidiary at the time of the redesignation less (y) the portion, 
 proportionate to our equity interest in the Subsidiary, of the fair
 market value of the net assets of the Subsidiary at the time of the
redesignation; and                                                

 (2) any property transferred to or from an Unrestricted Subsidiary shall be
  valued at its fair market value at the time of the transfer, in each
case as determined in good faith by the Board of Directors.       

"Issue Date" means July 29, 1999.                                         

"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind, including any conditional sale or other title retention     
agreement or lease in the nature thereof.                                       

 "Net Available Cash" from an Asset Disposition means cash payments received
from the Asset Disposition, including any cash payments received by way of      
deferred payment of principal under a note or installment receivable or         
otherwise and proceeds from the sale or other disposition of any securities     
received as consideration, but only as and when received, but excluding any     
other consideration received in the form of assumption by the acquiring Person  
of Indebtedness or other obligations relating to the properties or assets or    
received in any other non-cash form, in each case net of:                       

 (1) all legal, title and recording tax expenses, commissions and other fees
    and expenses incurred, and all Federal, state, provincial, foreign and
local taxes required to be accrued as a liability under GAAP, as a
consequence of the Asset Disposition;                             

(2) all payments made on any Indebtedness which is secured by any assets  
     that are part of the Asset Disposition, in compliance with the terms of
   any Lien upon or other security agreement of any kind relating to the
   assets, or which must by its terms, or in order to obtain a necessary
      consent to the Asset Disposition, or by applicable law be, repaid out of
the proceeds from the Asset Disposition;                          

(3) all distributions and other payments required to be made to minority  
   interest holders in Subsidiaries or joint ventures as a result of the
Asset Disposition; and                                            

(4) the deduction of appropriate amounts provided by the seller as a      
  reserve, in compliance with GAAP, against any liabilities associated
     with the property or other assets disposed in the Asset Disposition and
  retained by the Company or any Restricted Subsidiary after the Asset
Disposition.                                                      

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  "Net Cash Proceeds" relating to any issuance or sale of Capital Stock, means
the cash proceeds of the issuance or sale net of attorneys' fees, accountants'  
fees, underwriters' or placement agents' fees, discounts or commissions and     
brokerage, consultant and other fees actually incurred in connection with the   
issuance or sale and net of taxes paid or payable as a result the issuance or   
sale and any reserve for adjustment in the sale price of the asset or assets    
established in compliance with GAAP.                                            

"Obligations" means relating to any Indebtedness all obligations for      
principal, premium, interest, penalties, fees, indemnifications,                
reimbursements, and other amounts payable under the documentation governing the 
Indebtedness.                                                                   

"Permitted Holders" means (1) the Principals and any Related Party of a   
Principal and (2) any group of investors if deemed to be a "person," as these   
terms is used in Section 13(d)(3) of the Exchange Act by virtue of the          
Shareholders Agreement, as it may be amended, modified or supplemented from     
time to time, provided that:                                                    

(1) a Principal is party to the Shareholders Agreement,                   

(2) the persons party to the Shareholders Agreement, as so amended,       
      supplemented or modified from time to time that were not parties and are
not Affiliates of persons who were parties, to the Shareholders   
    Agreement as of the Recapitalization Closing Date, together with their
respective Affiliates whom we refer to as, collectively, the "New 
  Investors," are not direct or indirect beneficial owners, determined
      without reference to the Shareholders Agreement, of more than 50% of the
    Voting Stock owned by all parties to the Stockholders' Agreement as so
amended, supplemented or modified, and                            

  (3) the New Investors, individually or in the aggregate, do not, directly or
 indirectly, have the right, under the Shareholders Agreement, as so
  amended, supplemented or modified from time to time, or otherwise to
     designate more than 50% of the members of our Board of Directors or any
direct or indirect parent entity of ours.                         

"Permitted Investment" means an Investment by us or any Restricted        
Subsidiary in:                                                                  

 (1) a Restricted Subsidiary or a Person that will, upon the making of the
       Investment, become a Restricted Subsidiary; provided, however, that the
    primary business of the Restricted Subsidiary is a Related Business;

(2) another Person if as a result of the Investment the other Person is 
   merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, us or a Restricted Subsidiary; 
  provided, however, that the Person's primary business is a Related
Business;                                                       

(3) Temporary Cash Investments;                                         

(4) receivables owing to us or any Restricted Subsidiary if created or  
acquired in the ordinary course of business and payable or      
       dischargeable compliance customary trade terms; provided, however, that
     the trade terms may include the concessionaire trade terms as ChipPAC
      or the Restricted Subsidiary deems reasonable under the circumstances;

   (5) payroll, travel and similar advances to cover matters that are expected
    at the time of the advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of 
business;                                                       

   (6) loans or advances to employees, directors, officers or consultants made
in the ordinary course of our business or that of the Restricted
Subsidiary;                                                     

(7) stock, obligations or securities received in settlement of debts    
 created in the ordinary course of business and owing to us or any
Restricted Subsidiary or in satisfaction of judgments;          

   (8) any Person to the extent the Investment represents the non-cash portion
   of the consideration received for an Asset Disposition as permitted
     under the covenant described under "Significant Covenants--Limitation
on Sales of Assets and Subsidiary Stock;"                       

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(9) Currency Agreements and Interest Rate Agreements entered into in the
    ordinary course of our business and otherwise in compliance with the
indenture; and                                                  

 (10) so long as no Default shall have occurred and be continuing or results
  from the Investment, any Person in an aggregate amount which, when
     added together with the amount of all the Investments made under this
    clause (10) which at the time of the Investment have not been repaid
     through repayments of loans or advances or other transfers of assets,
      does not exceed the greater of (A) $30.0 million and (B) 7.5% of Total
       Assets, with the fair market value of each Investment being measured at
       the time made and without giving effect to subsequent changes in value.

"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated 
organization, government or any agency or political subdivision thereof or any  
other entity.                                                                   

"Preferred Stock" as applied to the Capital Stock of any Person, means    
Capital Stock of any class or classes however designated which is preferred as  
to the payment of dividends or distributions, or as to the distribution of      
assets upon any voluntary or involuntary liquidation or dissolution of the      
Person, over shares of Capital Stock of any other class of the Person.          

"Principal" of a note means the principal of the note plus the premium, if
any, payable on the note which is due or overdue or is to become due at the     
relevant time.                                                                  

"Principal" means Bain and SXI Holders.                                   

  "Pro Forma Cost Savings" during any period means the reduction in costs that
were:                                                                           

 (1) directly attributable to an asset acquisition and calculated on a basis
that is consistent with Regulation S-X under the Securities Act in
effect and applied as of the Issue Date; or                       

(2) implemented by the business that was the subject of the asset         
    acquisition within six months of the date of the asset acquisition and
that are supportable and quantifiable by the underlying accounting
   records of the business, as if, in the case of each of clause (1) and
    (2), all the reductions in costs had been effected as of the beginning
of the period.                                                    

"Recapitalization" means the plan of recapitalization and merger under the
Agreement and Plan of Recapitalization and Merger dated as of March 13, 1999 as 
amended on or prior to the Issue Date, among Hyundai Electronics Industries     
Co., Ltd., Hyundai Electronics America, ChipPAC, Inc. and ChipPAC Merger Corp.  

"Recapitalization Closing Date" means August 5, 1999.                     

"Refinance" of any Indebtedness means to refinance, extend, renew, refund,
repay, prepay, redeem, defease or retire, or to issue other Indebtedness in     
exchange or replacement for, the indebtedness. "Refinanced" and "Refinancing"   
shall have correlative meanings.                                                

"Refinancing Indebtedness" means Indebtedness that Refinances any         
Indebtedness of ours or any Restricted Subsidiary existing on the Issue Date or 
Incurred in compliance with the indenture, including Indebtedness that          
Refinances Refinancing Indebtedness; provided, however, that:                   

(1) the Refinancing Indebtedness has a Stated Maturity no earlier than the
Stated Maturity of the Indebtedness being Refinanced;             

(2) the Refinancing Indebtedness has an Average Life at the time the      
   Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being Refinanced; and        

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(3) the Refinancing Indebtedness has an aggregate principal amount, or if 
      Incurred with original issue discount, an aggregate issue price, that is
  equal to or less than the aggregate principal amount, or if Incurred
with original issue discount, the aggregate accreted value, then  
     outstanding or committed, plus fees and expenses, including any premium
and defeasance costs, under the Indebtedness being Refinanced;    

provided further, however, that Refinancing Indebtedness shall not include (x)  
Indebtedness of a Subsidiary that Refinances Indebtedness of ours or (y)        
Indebtedness of ours or a Restricted Subsidiary that Refinances Indebtedness of 
an Unrestricted Subsidiary.                                                     

  "Related Business" means any business related, ancillary or complementary to
our businesses and those of our Restricted Subsidiaries on the Issue Date.      

"Related Party" of any Principal means:                                   

(1) any controlling stockholder, or 80% or more owned Subsidiary of the   
Principal;                                                        

 (2) any trust, corporation, partnership or other entity, the beneficiaries,
      stockholders, partners, owners or Persons beneficially holding an 80% or
    more controlling interest of which consist of the Principal and/or the
   other Persons referred to in the immediately preceding clause (1); or

(3) any Affiliate of any Principal.                                       

 "Representative" means any trustee, agent or representative, if any, for an
issue of our Senior Indebtedness; provided, however, that if and for so long as 
any Senior Indebtedness lacks the representative, then the Representative for   
the Senior Indebtedness shall at all times be the holders of a majority in      
outstanding principal amount of the Senior Indebtedness.                        

"Restricted Payment" of any Person means:                                 

(1) the declaration or payment of any dividends or any other distributions
 of any sort relating to its Capital Stock, including any payment in
  connection with any merger or consolidation involving the Person, or
    similar payment to the direct or indirect holders of its Capital Stock
in their capacity as other than dividends or distributions payable
      solely in its Capital Stock other than Disqualified Stock, and dividends
   or distributions payable solely to us or a Restricted Subsidiary, and
other than pro rata dividends or other distributions made by a    
Subsidiary that is not a Wholly Owned Subsidiary to minority      
stockholders or owners of an equivalent interest in the case of a 
Subsidiary that is an entity other than a corporation;            

  (2) the purchase, redemption or other acquisition or retirement for value of
      any of our Capital Stock held by any Person or of any Capital Stock of a
Restricted Subsidiary held by any Affiliate of ours other than a  
     Restricted Subsidiary, including the exercise of any option to exchange
any Capital Stock, other than into our Capital Stock that is not  
Disqualified Stock;                                               

  (3) the purchase, repurchase, redemption, defeasance or other acquisition or
    retirement for value, prior to scheduled maturity, scheduled repayment
      or scheduled sinking fund payment of any Subordinated Obligations, other
than the purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund
   obligation, principal installment or final maturity, in each case due
within one year of the date of acquisition; or                    

(4) the making of any Investment in any Person other than a Permitted     
Investment.                                                       

In determining the amount of any Restricted Payment made in property other
than cash, the amount shall be the fair market value of the property at the     
time of the Restricted Payment, as determined in good faith by the Board of     
Directors.                                                                      

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"Restricted Subsidiary" means any Subsidiary of ours, including ChipPAC   
International Company Limited, that is not an Unrestricted Subsidiary.          

  "Revolving Credit Facility" means the revolving credit facility contained in
the Credit Agreement and any other facility or financing arrangement that       
Refinances or replaces, in whole or in part, the revolving credit facility.     

"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby ChipPAC or a Restricted Subsidiary          
transfers the property to a Person and ChipPAC or a Restricted Subsidiary       
leases it from the Person.                                                      

"SEC" means the Securities and Exchange Commission.                       

"Secured Indebtedness" means any Indebtedness of ours secured by a Lien.  

"Senior Indebtedness" of any Person means all:                            

  (1) Bank Indebtedness of or guaranteed by the Person, whether outstanding on
the Issue Date or thereafter Incurred; and                        

(2) Indebtedness of the Person, whether outstanding on the Issue Date or  
thereafter Incurred, including interest thereon, relating to (A)  
     Indebtedness for money borrowed, (B) Indebtedness evidenced by exchange
      notes, debentures, bonds or other similar instruments for the payment of
    which the Person is responsible or liable and (C) Hedging Obligations,
unless, in the case of (1) and (2), in the instrument creating or 
  evidencing the Indebtedness, it is provided that the obligations are
   subordinate in right of payment to the obligations under the exchange
   notes; provided, however, that Senior Indebtedness shall not include:

. any obligation of the Person to any subsidiary of the Person;   

    . any liability for Federal, state, local or other taxes owed or owing
by the Person;                                                

     . any accounts payable or other liability to trade creditors arising in
  the ordinary course of business, including guarantees thereof or
instruments evidencing the liabilities;                       

      . any Indebtedness of the Person, and any accrued and unpaid interest on
      the Indebtedness, which is subordinate or junior by its terms to any
other Indebtedness or other obligation of the Person; or      

   . that portion of any Indebtedness which at the time of Incurrence is
        Incurred in violation of the indenture, but as to any the Indebtedness
    under the Credit Agreement, no the violation will be considered to
  exist if the Representative of the Lenders thereunder shall have
       received an officers' certificate of ChipPAC that the issuance of the
 Indebtedness does not violate the covenant and setting forth in
reasonable detail the reasons supporting that statement.      

"Senior Subordinated Indebtedness" means:                                 

  (1) regarding ChipPAC International Company Limited, the notes and any other
     Indebtedness of ChipPAC International Company Limited that specifically
    provides that the Indebtedness is to rank pari passu with the notes in
right of payment and is not subordinated by its terms in right of 
      payment to any Indebtedness or other obligation of ChipPAC International
Company Limited which is not Senior Indebtedness of ChipPAC       
International Company Limited; and                                

  (2) regarding ChipPAC or a Subsidiary Guarantor, their respective Guarantees
     of the notes and any other Indebtedness of the Person that specifically
  provides that the Indebtedness ranks pari passu with the Guaranty in
right of payment and is not subordinated by its terms in right of 
    payment to any Indebtedness or other obligation of the Person which is
not Senior Indebtedness of the Person.                            

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"Shareholders Agreement" means the Shareholders Agreement entered into on 
the Recapitalization Closing Date by and among Hyundai Electronics, Hyundai     
Electronics America, SXI Group LLC, Bain Related Parties specified in the       
agreement and ChipPAC, Inc.                                                     

"Significant Subsidiary" means any Restricted Subsidiary that would be a  
"Significant Subsidiary" of ours within the meaning of Rule 1-02 under          
Regulation S-X of the SEC.                                                      

"Stated Maturity" of any security means the date specified in the security
as the fixed date on which the final payment of principal of the security is    
due and payable, including under any mandatory redemption provision, but        
excluding any provision providing for the repurchase of the security at the     
option of the holder upon the happening of any contingency unless the           
contingency has occurred.                                                       

"Subordinated Obligation" means any Indebtedness of ChipPAC International 
Company Limited, of us or any Subsidiary Guarantor, whether outstanding on the  
Issue Date or thereafter Incurred, which is subordinate or junior in right of   
payment to, in the case of ChipPAC International Company Limited, the notes or, 
in the case of ChipPAC or the Subsidiary Guarantor, its Guaranty, under a       
written agreement to that effect.                                               

"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of    
shares of Capital Stock or other interests, including partnership interests,    
entitled, without regard to the occurrence of any contingency, to vote in the   
election of directors, managers or trustees is at the time owned or controlled, 
directly or indirectly, by (1) the Person, (2) the Person and one or more       
Subsidiaries of the Person or (3) one or more Subsidiaries of the Person.       

"Subsidiary Guarantor" means each of ChipPAC (Barbados) Ltd., ChipPAC     
Limited, ChipPAC Korea Company Ltd., ChipPAC Luxembourg S.a.R.L. and ChipPAC    
Liquidity Management Hungary Limited Liability Company, ChipPAC Malaysia Sdn.   
Bhd. and any other subsidiary of ours that Guarantees ChipPAC International     
Company Limited's obligations under the notes.                                  

"Subsidiary Guaranty" means a Guarantee by a Subsidiary Guarantor of the  
Issuer's obligations under the notes.                                           

"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty Agreement   
dated the Recapitalization Closing Date between the Subsidiary Guarantors and   
ChipPAC International Company Limited.                                          

"SXI Group LLC" means SXI Group LLC, a Delaware limited liability company.

"SXI Holders" means:                                                      

(1) CVC;                                                                  

(2) SXI Group LLC; and                                                    

(3) any officer, employee or director of CVC or any trust, partnership or 
      the entity established solely for the benefit of the officers, employers
or directors.                                                     

"Temporary Cash Investments" means any of the following:                  

 (1) any evidence of indebtedness, maturing not more than one year after the
    date of investment by us, ChipPAC International Company Limited or any
    other Restricted Subsidiary, issued by the United States of America or
    any of its instrumentality agencies or by the Republic of Korea or any
     of its instrumentalities or agencies, or by the Asian Development Bank,
    the World Bank or any other supranational organization, which we refer
  to as the "Government Entities," and guaranteed or otherwise backed,
directly or indirectly fully as to principal, premium, if any, and
interest, by the Government Entity issuing the indebtedness;      

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 (2) investments in time deposit accounts, certificates of deposit and money
      market deposits maturing within 180 days of the date of the investments'
    acquisition issued by a bank or trust company which is organized under
      the laws of the United States of America, any state of the United States
    or any foreign country recognized by the United States, and which bank
     or trust company has capital, surplus and undivided profits aggregating
      in excess of $250.0 million, or the foreign currency equivalent thereof,
  and has outstanding debt which is rated "A," or a similar equivalent
 rating, or higher by at least one nationally recognized statistical
      rating organization, as defined in Rule 436 under the Securities Act, or
     any money-market fund sponsored by a registered broker dealer or mutual
fund distributor;                                                 

(3) repurchase obligations with a term of not more than 30 days for       
      underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in          
clause (2) above;                                                 

(4) investments in commercial paper, maturing not more than 90 days after 
the date of acquisition, issued by a corporation, other than an   
 Affiliate of ours, organized and in existence under the laws of the
      United States of America or any foreign country recognized by the United
    States of America with a rating at the time as of which any investment
therein is made of "P-1" or higher according to Moody's Investors 
Service, Inc. or "A-1" or higher according to Standard and Poor's 
Ratings Group; and                                                

  (5) investments in securities with maturities of six months or less from the
date of acquisition issued or fully guaranteed by any state,      
  commonwealth or territory of the United States of America, or by any
 political subdivision or taxing authority of the United States, and
     rated at least "A" by Standard & Poor's Ratings Group or "A" by Moody's
Investors Service, Inc.                                           

"Term Loan Facilities" means the term loan facilities contained in the    
Credit Agreement and any other facility or financing arrangement that           
Refinances in whole or in part the term loan facility.                          

"Total Assets" means our total consolidated assets and those of our       
Restricted Subsidiaries, as provided in our most recent consolidated balance    
sheet.                                                                          

 "Unrestricted Subsidiary" means (1) any Subsidiary of ours that at the time
of determination shall be designated an Unrestricted Subsidiary by the Board of 
Directors in the manner provided below and (2) any Subsidiary of an             
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of 
ours, including any newly acquired or newly formed Subsidiary, to be an         
Unrestricted Subsidiary unless the Subsidiary or any of its Subsidiaries owns   
any Capital Stock or Indebtedness of, or holds any Lien on any property of,     
ChipPAC or any other Subsidiary of ChipPAC that is not a Subsidiary of the      
Subsidiary to be so designated; provided, however, that either (A) the          
Subsidiary to be so designated has total assets of $1,000 or less or (B) if the 
Subsidiary has assets greater than $1,000, the designation would be permitted   
under the covenant described under "--Significant Covenants--Limitation on      
Restricted Payments." The Board of Directors may designate any Unrestricted     
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately   
after giving effect to the designation (x) we could Incur $1.00 of additional   
Indebtedness under paragraph (a) of the covenant described under "--Significant 
Covenants--Limitation on Indebtedness" and (y) no Default shall have occurred   
and be continuing. The designation by the Board of Directors shall be evidenced 
to the trustee by promptly filing with the trustee a copy of the resolution of  
the Board of Directors giving effect to the designation and an Officers'        
Certificate certifying that the designation complied with these provisions.     

"U.S. Dollar Equivalent" of any monetary amount in a currency other than  
U.S. dollars means, at any time for determination thereof, the amount of U.S.   
dollars obtained by converting the foreign currency involved in the computation 
into U.S. dollars at the spot rate for the purchase of U.S. dollars with the    
applicable foreign currency as published in The Wall Street Journal in the      
"Exchange Rates" column under the heading "Currency Trading" on the date two    
Business Days prior to the determination.                                       

Except as described under "--Significant Covenants--Limitation on         
Indebtedness," whenever it is necessary to determine whether we have complied   
with any covenant in the indenture or a Default has occurred                    

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and an amount is expressed in a currency other than U.S. dollars, the amount    
will be treated as the U.S. Dollar Equivalent determined as of the date the     
amount is initially determined in the currency.                                 

"U.S. Government Obligations" means direct obligations, or certificates   
representing an ownership interest in the obligations, of the United States of  
America, including any agency or instrumentality of the United States, for the  
payment of which the full faith and credit of the United States of America is   
pledged and which are not callable at the issuer's option.                      

"Voting Stock" of a Person means all classes of Capital Stock or other    
interests, including partnership interests, of the Person then outstanding and  
normally entitled, without regard to the occurrence of any contingency, to vote 
in the election of directors, managers or trustees.                             

  "Wholly Owned Subsidiary" means a Restricted Subsidiary the Capital Stock of
which (other than directors' qualifying shares) is at least 95% owned by us or  
one or more Wholly Owned Subsidiaries.                                          

LEGAL MATTERS 

 Some of the legal matters in connection with the validity of the notes will
be passed upon for us by Kirkland & Ellis, Los Angeles, California. Partners of 
Kirkland & Ellis are partners in Randolph Street Partners, which acquired less  
than 1.0% of our common stock in connection with the closing of our 1999        
recapitalization. Kirkland & Ellis has, from time to time, represented, and may 
continue to represent, Citicorp Venture Capital, Ltd. and some of their         
affiliates (including our company and our direct and indirect subsidiaries) in  
connection with legal matters.                                                  

EXPERTS 

  The financial statements incorporated in this prospectus by reference to our
Annual Report on Form 10-K for the year ended December 31, 2000, have been so   
incorporated in reliance on the report of PricewaterhouseCoopers LLP,           
independent accountants, given on the authority of that firm as experts in      
auditing and accounting.                                                        

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INCORPORATION BY REFERENCE  

The SEC allows us to "incorporate by reference" into this prospectus the  
information we filed with it, which means that we can disclose important        
information to you by referring you to those documents. The information         
incorporated by reference is considered to be part of this prospectus, and      
information in documents that we file later with the SEC will automatically     
update and supersede information in this prospectus. We incorporate by          
reference the documents listed below into this prospectus, and any future       
filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the 
Securities Exchange Act of 1934, as amended, or the Exchange Act, until our     
offering is complete. The documents we incorporate by reference are:            

.  Our Annual Report on Form 10-K for the year ended December 31, 2000 filed
on April 2, 2001.                                                     

.  Our Proxy Statements on Form 14A filed with the SEC on February 22, 2001 
and April 30, 2001.                                                   

.  Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001   
filed on May 15, 2001.                                                

.  Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001    
filed on August 14, 2001.                                             

 .  Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2001
filed on November 14, 2001.                                           

.  Our Current Report on Form 8-K dated December 31, 2001 filed on January  
10, 2002.                                                             

You may request a copy of these filings at no cost, by writing or         
telephoning us at the following address:                                        

ChipPAC, Inc. 
47400 Kato Road 
Fremont, California 94538 
Attention: Corporate Secretary  
Telephone: (510) 979-8000 

WHERE YOU CAN FIND MORE INFORMATION 

We file annual, quarterly and current reports, proxy statements and other 
information with the SEC. You can inspect, read and copy these reports, proxy   
statements and other information at the public reference facilities maintained  
by the SEC at:                                                                  

.  Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.     
20549; and                                                            

.  Suite 1400, 500 West Madison Street, Chicago, Illinois 60661-2511.       

You can also obtain copies of these materials from the public reference   
facilities of the SEC at prescribed rates. You can obtain information on the    
operation of the public reference facilities by calling the SEC at              
1-800-SEC-0330. The SEC also maintains a web site (http://www.sec.gov) that     
makes available reports, proxy statements and other information regarding       
issuers that file electronically with it.                                       

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[LOGO] ChipPAC logo for Back Cover  

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B1’ Filing		Date		First		Last			Other Filings
		8/1/09		23
		8/1/04		1		23
		1/1/04		13
		5/1/03		14
		12/31/02		4		13			10-K
		8/1/02		23
		6/30/02		9					10-Q
		5/1/02		14
		3/31/02		4		9			10-Q
		3/1/02		4		6
Filed on:		1/22/02							424B1
		1/18/02		1
		1/10/02		65					8-K,  S-3
		12/31/01		4		65			10-K,  8-K,  S-3/A
		11/14/01		65					10-Q
		9/30/01		1		65			10-Q
		9/11/01		16
		8/14/01		65					10-Q
		8/5/01		32
		8/1/01		22
		6/30/01		10		65			10-Q
		6/22/01		1
		5/15/01		65					10-Q
		4/30/01		65					DEF 14A
		4/2/01		65					10-K
		3/31/01		10		65			10-Q
		2/22/01		65					DEFS14A,  SC 13G/A
		12/31/00		14		65			10-K
		9/30/00		10					10-Q,  NT 10-Q
		6/30/00		10					10-Q,  8-K,  NT 10-Q
		3/31/00		10					10-Q,  NTN 10Q
		12/31/99		14		18
		8/5/99		9		59
		7/29/99		9		57
		3/13/99		59
		1/1/99		55
		12/31/98		14		18
		12/31/97		18
		12/31/96		18
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