Greetings and welcome to the ChipMOS Bermuda Ltd. Second Quarter 2008 Results Conference Call. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joseph Villalta, of the Ruth Group. Thank you. You may begin.

Thank you, operator. Welcome everyone to ChipMOS's second quarter 2008 results conference call. Joining us from the company are SJ Cheng, Chairman and CEO; and SK Chen, CFO. SJ will review highlights from the quarter and then provide ChipMOS's business outlook. SK will then review the company's key performance metrics and financial results. We'll then have time for any questions. If you have not received a copy of today's results, please call the Ruth Group at 646-536-7026, or you can get a copy of the release at ChipMOS's website at www.chipmos.com. Before we begin, we must take a disclaimer regarding forward-looking statements. Before this call, management may make forward-looking statements within the meaning of the Section 27A of the US Securities Act of 1933 as amended, and the section 21E of the US Securities Exchange Act of 1934 as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual performance, financial condition or results of operations of the company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the company's most recent annual report on Form 20-F filed with the US Securities and Exchange Commission, and in the company's other filings with the SEC. Let me now turn the call over to Mr. SJ Cheng. Please go ahead sir.

Thank you, Joseph. Welcome everyone to our 2008 second quarter conference call. Hopefully, you all had time to review our earnings release. Q2 revenue was $158.7 million, which is an increase of 0.8% over Q1 '08 and a decrease of 17.4% year-over-year. Under US GAAP, the growth margin decreased to 7.2% in the second quarter from 9.1% in the first quarter, reflecting lower capacity utilization in the final testing for DRAM and Flash products, as well as price erosion of DRAM business. Our DRAM business continued to be weak in the second quarter. DRAM revenue [has given us] 1% sequential growth in Q2 primarily contributed from assembly manufacturing due to the unit volume increases. However, the price erosion offset the revenue growth coming from unit volume growth. DRAM testing requirements remained limited in the second quarter. Our LCD driver revenue had 3% quarter-over-quarter growth in Q2, reflecting a quick but (inaudible) recovery in demand from our customer. However, our gold bumping business had a good revenue in Q2, as a result of a increase in the customer base. Our gold bumping revenue increased around 25% in Q2, as compared to Q1. Flash revenue in Q2 declined 7% quarter-over-quarter and contributed around 29% of our total revenue in Q2, down from 32% in Q1. The decline in flash revenue was primarily due to the seasonal adjustment from our unauthorized customers. Including our flash revenue, Mask ROM business from our major flash customer in Taiwan had better growth potential. Revenue from Mask ROM had around 10% of quarter-over-quarter growth in Q2, and currently contribute around 7% of our flash revenue. Mixed-signal in our business is another growing segment among our product mix. Mixed-signal revenue had around 11% of quarter-over-quarter growth in Q2, and currently contributes around 8% of our total revenue. Looking…

Thank you, SJ All dollars cited in our presentation will be in US dollars. We have provided both US dollars and NT dollars in our press release. The following numbers are based on the exchange rates of NT$30.36 against $1.00 as of June 30, 2008. SJ has reviewed our revenue and margins. Non-GAAP adjusted net loss for the second quarter of 2008 was $20.4 million, or $0.24 per basic common share compared to a net income of $5.5 million or $0.07 per basic common share in the first quarter of 2008. Under non-GAAP measures, our operating expense in Q2 is approximately 9.1% of the revenue. The non-operating expense was $5 million. Minority interest in Q2 was $0.7 million. Income tax expense in Q2 was $11.7 million, which included $11.1 million of withholding tax for the dividend distribution from ChipMOS Taiwan to ChipMOS Bermuda. Net loss in Q2 primarily came from the increase of cost of sales of $4.2 million, accrued of compensating cost adjustment for stock option of $2.1 million and withholding tax from dividend distributions of $11.1 million. The loss was further enlarged from net exchange gains of $5.7 million. On the segment basis, the second quarter's revenue breakdown was 26% in final testing, 23% in wafer saw, 33% in assembly, 18% LCD driver IC business. Total capacity utilization was 69% for the quarter compared to 59% in the first quarter of 2008. The capacity utilization on the segment basis was 70% for testing, 73% for assembly and 63% for LCD driver IC including bumping. CapEx for the quarter was $15.2 million and was $41.4 million for the first half of 2008. The breakdown of CapEx for the second quarter was 34% for assembly, 34% for testing and 32% for LCD driver IC capacity. Depreciation and amortization expenses were…

Thank you. (Operator Instructions). Our first question is from Peter Kim with Deutsche Bank. Please go ahead with you question.

Hi. Thanks for taking my question. Could you give us an idea about your top customers, percentage of revenues they represented?

Okay. In the first half of this year the revenue from our top customers was the (inaudible) in USA, it is about 21% and the revenue from ProMOS was also around 21% and the factories of Novatek is about 10%. Hynix is ranked at number four, is about 6.5%. The [T1 makers] from USA contributed about 5.3% and ranked at number five, the top 10 customers contribute around 80% of our total revenue in the first half of this year.

So, following up ProMOS used to be your number one customer and obviously they reported Q2 results that were pretty dismal, and so I was wondering what your outlook for ASP was for DRAM overall? I assume that ProMOS represents a big percentage of your DRAM revenue?

You mean ASP for DRAM or ASP for (inaudible)?

ASP for DRAM and just from the testing and packaging?

So the ASP for DRAM we see the [counter price] for August is continuing to drop. It's a single digit in between 3% to 5% drop, that will be the counter price in August. And for [packaging] I think right now the customers did negotiate a price with us by monthly basis. But the room is pretty limited.

Lastly, you were talking about your mixed-signal increases. As I recall, your mixed-signal margins were never really that good. And I was wondering, if you are expecting to see increases in mixed-signal, what do you expect the margin from that business to be?

To answer your question, you can see. Previously our top 10 customer occupy around more than 90% of our revenue. Then our top 10 customer occupies very close to 80%. So we already had to cooperate to diversify from our key business segment. Even in the LCD driver to other areas already. Since right now is the beginning, the growth margin is positive. But, they are limited, because they have not reached the economy of scale yet. But overall speaking, under the current situation, the mixed-signal growth margin is much-much better than all the memories.

Do you need to invest any more in CapEx to support the growth in revenue?

Memory-wise, we can (inaudible) to serve the mixed-signal, but with very limited investments. For testing-wise, we already had some investments, so that we use those limited type of investments in light of every quarter.

Okay. Thank you.

Our next question is from Mehdi Hosseini with Friedman, Billings Ramsey. Please go ahead with your question.

Actually, this is Rafi from FBR for Mehdi. I have a question on your testing business. What are the breakdown from DRAM, flash and LCD for testing?

The total testing revenue, contribute about 26% to our revenues and demand is about 15.6% is from DRAMs, 2.6% is from SRAM, while 4.8% is from flash and the rest of the balance is coming from mixed-signal.

Okay. Could please give me the same breakdown for assembly business?

Excuse me. Could you repeat?

Same from assembly business for DRAM and Flash, what percentage of your assembly business came from DRAM?

Okay. For the assembly, it contributed about 32% of our total revenues and among that, it's about 20.7% from DRAMs, 1.1% from SRAMs, 5.7% from flash and 4.5% from mixed-signal.

Thank you.

(Operator Instructions). The next question is from [Brian Grad with DLS Capital Management]. Please state your question.

Hi guys. What kind of capacity increases are you seeing out there in both the assembly and test side of the business, outside of yourselves, what's going on in the market?

To answer your question from our side, memory wise we see they are stable. As we mentioned DRAM wise, the increase is around 1% our price erosion offset revenue growth. And for mixed-signal, we continue to see very good increased momentum, especially for LCD-TV, peripheral chip, and communication and also PC peripheral.

Okay. This is SK. I would say that outside ChipMOS, most of the capacity increase would be in assembly, because of the volume increase, but I would believe that nobody invest into the testing capacity since the testing installation is still very low right now.

Okay. At what point do you think more capacity comes online, what kind of utilization rates may be before that goes up?

For the assembly, we are already in line at 70%, 75% in that region and 40 for the memory testings, the overall capacity rate is below 70 because of the dealer price.

Okay. How many bonds you have been able to buyback? What is the current outstanding on both of the issues?

Currently, we have around 80 million of the bond due 2011 trading in the market and about 71 million of the bond due 2009 trading to the market. And we tried very hard to buy more of that into the company, but actually it's not that much of the bonds available in the market.

Okay. And so you have been able to buy those bond below par?

Not for the bond due 2011 and I would believe that most of the bondholders were waiting for the put by now.

Right. And do you have enough cash in the US now with this facility to redeem those with no trouble?

Yes, no problem.

Okay. So we spoke I think on the last call, once you get this out of the way, I mean you were looking at possibly getting an authorization to buy back stock, I mean is that still on the horizon here or are you guys just hovering down and trying to get through this rough spot in the business?

This is very good questions to the companies. Actually, we visited these issues from time to time and we are looking into the layout of the company's financial layout. We still haven't found a due 2009 economic [choice] in October 2009. So as we're taking this into considerations that the company's liquidity might be the issues for our Board to approve for the stock buyback. So for me as CFO of the company, I was proposed to reserve all of the financial resources to say fulfill the product application of the 2008 events into September 2008 and maybe we are looking for the opportunity to buy back the bonds due 2009 from the market and prepare the company for the maturities of the bond due 2009.

Okay. What kind of rate did you get on the new loan that you have?

I am sorry, do you mean the interest rate?

Yeah. What kind of interest rate you get on the new loan?

Right now, it's in the range of 2.5% to 4%, I am sorry.

Is that floating over LIBOR?

Yes, it's 1% on LIBOR.

LIBOR plus one?

Yes, LIBOR plus one.

Okay. Right. Could you give us any color at all on the situation with Tessera. They sued you. Now you are suing them. I mean, what's going on there?

Actually, we both had terrible situation. I think we are in this process for this case for I think more than two years. And right now, I think ChipMOS has done the other thing, our direct sales product provider because we had provider capacity. And you may figure it that we still had lot of arguments. And some item they came to us, we've done usage. So that's our (inaudible) that are five day with it. That's it. So far the state has been (inaudible) yet.

Okay. I know, I mean Amcor was going through this with these guys too and I think they are waiting to hear back from the adjudicator what the outcome of their lawsuit is going to be. Is it 60 to 90 days? So, I don't know if that's going to impact you or not depending on what the outcome of that is?

Yes.

All right. Thank you. I'll go back in the queue.

Okay, thanks.

(Operator Instructions). The next question is from Tom Saberhagen with Aegis Financial Corporation. Please state your question.

Hi, gentlemen. My question is about the 2009 maturities. I just wanted to make sure I understand the bank loan maturities in 2009 as well as the bond that's coming due?

Yes, this October 2009. The upcoming portion is around $71 million.

The bond that's due $71 million and the bank loans that have maturities in 2009 is $119 million still?

I think, it is just, as some of you said, very clear by this feature. In total receivables we had two convertible notes. The convertible notes CD1 will be matured in October next year.

Yes.

Still remaining very close to the $70 million to $71 million this kind of range and CD2 mature date is 2011. We already brought back from the market $18 million already, because they [have a rising throughput] in the September year 2009 after two years time period.

Yes.

And we already had enough cash generated from our operation. We also got a syndicated loan of $74.5 million to clear all the potential throughput in coming September and we still have certain amount of money [still to decide]. We will buy back convertible bonds or we have the right to buyback our shares from the market.

Yes.

I'm unable to understand your question.

My question was about the bank loans. The syndicated loans that were taken in 2004 and 2005 that have maturities in 2009.

Actually we paid back gradually. But we pay the bank loan back to the banks quarterly. So I don't think that amount is that big since that we have normally as we pay out five years long-term loans so we will have two years less period and from the three years we pay back the principals quarterly. So, it will not…

So that will be…

Yeah, that number will not be that big as you mentioned.

Okay. That was the number from the 20th filing. So it would be reduced quarterly.

Yeah. It would be reduced quarterly.

Okay. Is there any change in the environment for bank loans in Taiwan? In United States credit is obviously a lot harder to get now. Do you see any change in the Taiwanese banking?

All I can speak here right now is, I think that's not only Taiwan and US; that is the worldwide issue. Right now, like we've got financial support from bank, the environment is getting tougher than before, and the cost also is higher than before. And you can see with ChipMOS, we still can garner strong support from the local Taiwanese banks. It means we have a very good credit and (inaudible) operation, that's a lot similar to get a syndicated loan from the bank with a very cost effective interest rate. And right now, especially for the Taiwan Bank, right now they are in a very conservative position, especially for high-tech business and housing.

Okay. Do you see that affecting you in the coming year?

No. I don't think so.

Yeah, I don't think so. We still have roughly NT$5 billion long-terms undrawn and another NT$5 billion short-terms loans undrawn. So we have sufficient financial resource available for the company.

Okay. And my final question is the recent investment that Hynix made in ProMOS, how do you see that affecting your business going forward?

Actually, the ProMOS is selling the business products again. And you might remember that Hynix was also our key customer before. So I think that by Hynix and ProMOS combined together for our key customer ProMOS, they can get technology clear roadmap from the Hynix. And also, it is good news for ProMOS to gather finance support from the market. And from ChipMOS wise, we can collect clear technology roadmap with ProMOS and Hynix together, and also potential business increasing with this kind of joint venture together.

Okay. Thank you very much.

(Operator Instructions). I'm showing no further questions in queue. I'd like to turn the call back over to management for closing remarks.

Yeah. Thank you everyone for joining our second quarter conference call. If you need more detailed information, please don't hesitate to contact us, either through our website or teleconference. Thank you again. Bye-bye.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.