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ChipMOS Reports Q1

HSINCHU, Taiwan — ChipMOS TECHNOLOGIES (Bermuda) LTD. (“ChipMOS” or the “Company”) (Nasdaq: IMOS) today reported unaudited consolidated financial results for the first quarter ended March 31, 2011. All U.S. dollar figures in this release are based on the exchange rate of NT$29.40 against US$1.00 as of March 31, 2011.

Net revenue on a US GAAP basis for the first quarter of 2011 was NT$4,469.6 million or US$152.0 million, an increase of 3.4% from NT$4,322.6 million or US$147.0 million in the fourth quarter of 2010 and an increase of 21.7% from NT$3,671.5 million or US$124.9 million for the first quarter 2010.

Net loss on a US GAAP basis for the first quarter of 2011 was NT$118.7 million or US$4.0 million, and NT$4.61 or US$0.16 per basic common share, compared to net income of NT$1,346.8 million or US$45.8 million, and NT$52.39 or US$1.78 per basic common share, for the fourth quarter of 2010. Net loss under US GAAP includes non-cash loss for changes in the fair value of the embedded derivative liabilities of NT$62.0 million or US$2.1 million and amortization of discount on convertible notes of NT$1.1 million or US$0.1 million for the first quarter of 2011 and non-cash loss for changes in the fair value of the embedded derivative liabilities of NT$12.2 million or US$0.4 million and amortization of discount on convertible notes of NT$1.6 million or US$0.1 million for the fourth quarter of 2010.

Excluding the above special items regarding the convertible notes, non-GAAP adjusted net loss for the first quarter of 2011 was NT$55.6 million or US$1.8 million, and NT$2.16 or US$0.07 per basic common share, compared to non-GAAP adjusted net income of NT$1,360.6 million or US$46.3 million, and NT$52.93 or US$1.80 per basic common share in the fourth quarter of 2010.

The unaudited consolidated financial results of ChipMOS for the first quarter ended March 31, 2011 included the financial results of ChipMOS TECHNOLOGIES INC., ChipMOS U.S.A., Inc., MODERN MIND TECHNOLOGY LIMITED and its wholly-owned subsidiary ChipMOS TECHNOLOGIES (Shanghai) LTD., and ThaiLin Semiconductor Corp.

S.J. Cheng, Chairman and Chief Executive Officer of ChipMOS, said, “Our first quarter revenue and gross margin results are in line with expectations, with net revenue at nearly 22% higher on a year over year basis and improving gross margins of 7.6% in Q1 2011 as compared to 5.9% in Q4 2010. Demand in our LCD driver business, including gold bumping, and assembly services for niche/mobile DRAM and flash, remained strong through the end of the quarter. This strength was led by increased demand for serving applications, including hard disc drives, tablet computers and smartphones, where our average capacity utilization increased to approximately 77% in 1Q11. We are fortunate to note that our supply chain has remained insulated from disruptions caused by the terrible earthquake and tsunami in March 2011, and our thoughts continue to be with the people of Japan and our partners there.”

S.K. Chen, Chief Financial Officer of ChipMOS, said, “Our blended utilization rate improved to 77% compared to 68% in the prior quarter, reflecting higher capacity utilization in our LCD driver and assembly segments. Going forward, we see considerable room for gross margin improvement as our utilization rate further increases due to the success of our business diversification, and increasingly favorable revenue mix. Other than the non-cash loss from the changes in the fair value of the embedded derivative liabilities and amortization of discount on convertible notes mentioned above, the net loss in the quarter was also the result of a loss we incurred on the sale of our interest in ChipMOS Taiwan to Siliconware Precision Industries Co., Ltd., of approximately NT$74.9 million or US$2.5 million. As of today's date, we have no outstanding convertible debt, thereby eliminating any further potential related non-cash losses. We also expect to realize the benefits from our corporate restructuring activities, which we believe should translate into sustainable margin and profitability improvements over the near period and beyond. In addition, we further reduced the company's balance of total debt by an additional US$31 million in the first quarter of 2011, while maintaining a strong balance of cash and cash equivalents at US$194.1 million as of March 31, 2011. We look forward to further debt reductions each quarter as generate positive cash from operations throughout 2011.”

{complink 12843|ChipMOS Technologies (Bermuda) Ltd.}

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