Greetings. And welcome to ChipMOS’ Third Quarter 2012 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Pasquale of Global IR Partners. Thank you, Mr. Pasquale. You may begin.

Thank you, Operator. Welcome everyone to ChipMOS' third quarter 2012 results conference call. Joining us today from the company are Mr. S.J. Cheng, Chairman and Chief Executive Officer; and S.K. Chen, Chief Financial Officer. S.J. will review highlights from the quarter and then provide ChipMOS' business outlook. S.K. will then review the company's key financial results. We will then have time for any questions. If you have not yet received a copy of today's results release, please email Global IR Partners at imos@globalirpartners.com, or you can get a copy of the release off of ChipMOS’ website, www.chipmos.com. Before we begin, we must make a disclaimer regarding forward-looking statements. During this call, management may make forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and the Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the 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 U.S. Securities and Exchange Commission, and in the company's other filings with the SEC. I would like to now turn the call over to Mr. S.J. Cheng. Please go ahead, sir.

Yeah. Thank you, David. Welcome everyone to our third quarter 2012 conference call. Hopefully, you all had time to review our earnings release. We would like to welcome new shareholders joining on today’s call for the first time. I had a pleasure meeting with many of you recently to introduce the ChipMOS story. Thank you for the confidence and support you have expressed. Result for the third quarter was as expected and in line with our prior year’s guidance. Our revenue grew 6.4% compared to Q2 2012 and the gross margin improved to 18.6%, compared to 12.8% Q2 this year. Revenue growth in Q3 was mainly driven by our LCD driver IC business and bumping business, which increased 12.3% and 16.7% compared to Q2, respectively. The healthy growth was as expected given our market leading position and strength in the key LCD segments. We have invested in support our LCD business and established stronger customer relationship, which will continue to benefit our results moving forward. We start on this strategy offsetting our business and customer mix several years back. We have defensible leadership position now with high barrier to enter for any new entrants. This differentiated ChipMOS from a business standpoint. This also led to increase value for our shareholders and the market better appreciate our success and leading position. We are also pleased with revenue growth of 4.1% in our mixed-signal business and 2.1% revenue growth in DRAM business compared to Q2. While smaller contributed to our overall result, we are compared with our mixed-signal business and positive given recent signal of stability in the DRAM market. The mixed-signal market is attracted to us as it provides a growth opportunity and diversification for our business. Our Q3 flash business decreased 3.2% as compared to Q2. This decline continues [make…

Thank you, S.J. All dollar amounts cited in our presentation are in U.S. dollars. We have provided both U.S. dollars and NT dollars in our press release. The following numbers are based on the exchange rate of NT$29.29 against US$1 as of September 28, 2012. As. S.J. has just reviewed our revenue and margins. I will provide details on the rest of our Q3 results. Net income for the third quarter of 2012 was $12.5 million and $0.46 per basic common share, and $0.44 per diluted common shares, compared to a net income of $10.3 million and $0.38 per basic common shares, and $0.36 per diluted common shares in the second quarter of 2012. Excluding foreign exchange loss of $3.1 million, our Q3 net income was $15.6 million and $0.57 per basic and $0.55 per diluted common shares. Our operating expense in Q3 was $11.5 million and other operating income was $0.9 million. Non-operating expense in Q3 was $4.5 million including foreign exchange loss of $3.1 million and net interest expense of $1.5 million. Income tax expense in Q3 was $2.2 million. On the segment basis, Q3’s revenue breakdown was 29% in testing, 33% in assembly, 33% in LCD driver IC business and 15% in bumping. Total capacity utilization was approximately 80% for the third quarter, compared to 78% for second quarter of 2012. The capacity utilization under segment basis was 75% for testing, 81% for assembly, 83% for LCD driver IC and 82% for bumping. CapEx for Q3 was $19.6 million. The breakdown of CapEx for the third quarter was 22% for testing, 18% for assembly and 14% for LCD driver IC and 46% for bumping capacity. We are committed to keeping our CapEx budget within the provided $85 million to $95 million range for the full year of…

Thank you. (Operator Instructions) Our first question comes from the line of Richard Shannon. Please state your question.

S.K. and S.J., hi. How are you doing?

Very good. Hi.

Very good. How are you?

Doing well. Thank you. S.J. a few questions from me. I guess, first of all, what should we expect, what are your expectations for free cash flow in the fourth quarter and obviously, that fit your goals for the year?

For the Q4, our free cash flow will be in the range of $20 -- about $21 million to $24 million. It depends on the business with your agents.

Okay. And then, and just quickly on the guidance -- the gross margin guidance. It seems a little conservative given the revenue levels here. Can you walk us through how the -- how you arrive at that gross margin guidance level and what’s the kind of the factors that would lead it to be at the low end to the high end?

Richard, you mentioned the Q4 guidance, right?

That’s correct. Yeah.

Okay. Let me put this way, actually the, from business stand view point, the LCD driver, the visibility is clear for entire Q4, which will see they continue to grow based on the strong request from the customer side. But regarding the memory and especially for commodity assembly, the visibility is limited and we got a lot of our forecast order in October that gives us better expectation in October revenue. But in the November side, we still keep very close contact with our customer side on daily basis and try to get as much as we can. Regarding the last December, the visibility out there is not really clear. So that’s the reason, we keep a conservative guidance. And we will keep -- the management team will keep our effort, try to get as much as we can. That’s our real market evaluation.

Okay. Fair enough. Couple of questions in your LCD business, S.J. How is the pricing environment been there, especially compared to last, couple of few quarters and I know, how do you think your -- what do you think your share position is? Has it been improving or kind of staying stable, how would you share?

The viewpoint to answer your question. First, the reason why in Q3 our revenue again increased dramatically in LCD driver due to the utilization rate increase and the new capacity installation and for the Q4, right now the market request -- requirement is better than our expectation. So currently, we didn’t see delivery pressure. We don’t see any price pressure yet in Q4 this timeframe.

Okay. Fair enough. Just a couple more questions for me. Just looking at the historical CapEx splits here and it looks like your numbers for bumping -- it continued to be pretty strong. Can you tell us a bit more about what your expectations for growth in bumping going forward?

Actually, right now, gold bumping. We just focus on the 12-inch new installation equipment and also for the metal composite bump with little CSP. Regarding to the 8-inch and 15-inch, right now almost in the higher utilization rate, which we continue to focus our effort to increase our utilization rate and further reduce the cost and material saving, engineering programs.

Okay. This increase in bumping, is this related to just only to current customers or do you have potential new ones coming in here?

Both. We also have got a very good developer programs we also have in Taiwan.

Okay. One last question for me, S.J. and I’ll jump out and let others jump in here. But if I recall your comments in your prepared remarks about wafer level chip scale packaging, did I hear you say that you are expecting something along the lines of 15% of sales from that within a few years. If you can confirm that and then maybe, dig in and help us understand how many customers that drives, where you expect to see that business develop from?

Actually, not only in wafer levels CSP. What you will see is that we have successfully developed our gold bumping technology and infrastructure both in 8-inch and 12-inch. And in order to further reduce the material cost and gold usage, a lot of customer, we developed together for copper technology and that gives us proximity not only in gold bumping, but also can provide gold bumping in order to further -- copper bumping order to further reduce the gold usage. And by doing so, we generate a lot of new application. That’s for wafer level CSP and also for free chip and also for metal. In each product segments, we had a certain department working with us. As you may still remember, wafer level CSP, we were very interested with main target is for (inaudible). And we had a very good progress. And the reason why we chose these three segments is we have fully utilized our existing capacity, technology and also manpower expertise with the very limited further investment. So we can say that copper is managing the future and this area also is a niche area, which can avoid direct competing with those lower margin areas. And we expect that these three segments can generate annual revenue contribution around 15% within three to five years.

Okay. S.J., thank you very much for that clarity. I will jump out of line. Thank you very much.

Our next question comes from the line of Brian Grad with DLS Capital Management. Please state your question.

Hi S.J. Hi S.K. I think that’s a great quarter and just want to congratulate you on really operating the company well and continuing to deliver on all the goals including the dividend. My question for you is one of the get back into is the whole idea of buyback again, I mean -- I think we know -- everybody knows that the sale of $10.10 was kind of a hold your nose and sell it because we want to move forward, try to get the stock listed and unlock the value. And I’m sure that there -- I know there was a lot of unhappiness that it was traded at that price but it is what it is and it’s going to let us get the value out of the company. Can you give me an idea of why you think you need $20 million to support daily operations in Bermuda rather than using some of that money to buyback more stock down here? I mean it’s certainly undervalued. And since most of the cash from the company is held in Taiwan anyway then why do we need so much cash there. Are there any legal reasons, I know you’ve said you can’t talk much about whatever listing it might be coming forward that is the only reason legally why you can’t buyback more stock down here?

Brian, this is S.K. Thank you for your questions. There is no legal findings for us to move the cash out of Taiwan but you know ChipMOS Taiwan now is a listed company, we would like dividend up to ChipMOS Bermuda. We need to have the shareholder’s meeting to approve the deposits. So it takes times. We heard you that right now -- actually it’s now over here, we receive a lot of input from our shareholders that currently that this is a good time to do buyback and we also discussed with our Board. We may come in anytime to do buyback but here we would like to wait for a moment since that we need to -- since that we just authorized $10 million for buyback. We finished the buyback and right now we declare dividends and we need to stop a while and as we have cleared that we can -- building up our cash positions and we may take some actions.

Right. But I mean -- I guess, my point is are you paying for daily operations out of Bermuda or is that paid locally out of the Taiwan?

We pay dividends from ChipMOS Bermuda.

No, no, I know that but that will still leave you with $28 million. Is there any reason why we need to have -- you said you wanted to have $20 million to support daily operations but I mean, most of the daily operations will run out of the local market. So why do we need all this cash piled up in Bermuda? Why can’t we do another $10 million work, I mean, it’s still issued a pretty happy balance unless you think you going to need all that money to get whatever listings you’re going to get done? I know you need some buffering there right for some expenses but it just seems excessive. The other thing is to us Mosel is still sitting out there with a pile of stock. Why would you just go to Mosel and take out the rest of their stock. Even if you had to pay $13 for it, go and buy it, get it done, get it out of the way, use your money, the stock is massively undervalued. I mean, everybody benefits. I guess, I’m kind of imploring you to go ahead and take that next step. And I think all the shareholders on the call would agree with me that you guys have completely turned the corner. And even if you don’t get the net debt flat in the next quarter or the quarter after that, that’s okay.

Yeah. We understand. We understand. I think we spend to use as we’d pretty keen to complete the company restructuring. But you know that for any company restructurings, we need money. And that’s -- I think that one of the reason we chose the cash we have right now. As any move, it’s either its dividends or any merger to purchase we need cash to support these restructures and activities. So we hear you and we actually put this request on to our offenders but we actually trend very carefully our cash flows for the future events. And all this events in cash, we don’t want to tell you that we’re running out of cash. We need to wait a moment to look in for creditor to give us money. I think this is the main reason. We -- it seems to us a little bit slow but we just -- I think we achieved all this milestones one by one.

Brian, this is S.J. I think your message is very clear. Now for years, there are lot of shareholders that give me the same feedback. I will like to take this opportunity to spread the company’s position. That is our first step we decrease our cash dividend. I will need a company to approach a stock holder, shareholder friendly company in the long run. But please give the company more time. We just paid our first dividend and we tried to further pay down the debt. And once the company finance situation being further improve and we continue to deliver the good quarter. Then I think we will keep -- demonstrate we’re shareholder friendly company. Please thus keep manage our team sometime.

Okay. I understand. Can you guys give us -- and I think I asked you this a while ago, S.K.? How much stock does Mosel have left? What do they still own?

Right now, below 2 million -- 2 million shares. And I think I didn’t hear any information as to how many shares they sold after they announced to their beneficiaries. So currently, they probably hold 1.8 million or 1.9 million shares.

Is there any way to get a number on that? I mean, can you check with the DTC to see how much they have or is that because it’s 144A stock, it’s not filed anywhere?

Let me check. I have no idea. Let me tell that probably we can find out the numbers.

Okay. All right. I think you guys are doing a great job and I think we are on the cusp of having the best year ever and I want to congratulate you on all the hard work you’ve done and keep up the good work. Thanks. I’ll get out, let somebody else ask a question.

Okay. Thank you.

(Operator Instruction) Our next question is coming from the line of Aaron Martin with AIGH Investment Partners. Please state your question.

Hi guys. Congratulations on the fantastic quarter. OpEx came in a little higher than I expected. I expected to step up a little bit quarter-over-quarter. Any particular reason why there was such a large jump up there in OpEx and how should we think about it going forward?

The change of the OpEx system did appear related to the -- going almost down to our top primes. Since that we must record some issuance’s related to stock option trend which is related to this top product. So we understand that this is -- our number changes. It appears that it is more than…

What was in terms of cash operating expenses? What was the number and how does that relate to last quarter?

It was about -- roughly $2 million. It would be a stock option trend.

How much was in Q2?

Wait a minute. Q2 is now $1.2 million related to the stock option and for Q3, it’s about $2 million.

Okay. So that’s nice. That’s a big part of the step-up there. Rather than going forward, ex -- not counting stock, covenants were issued. How should we view OpEx as stable in so range?

OpEx will be 6% to 7% of our earnings in each quarter.

And on a -- I was talking through the dollar basis, should we consider to be

On a dollar basis, it would be around $10 million in Q4 as we estimate it.

Okay. That’s $10 million excluding stock compensation?

Including.

Including stock compensation.

Yeah.

Okay. Now, change to different topic, one of your customers who you traditionally have not had a very large market share has started using little more 12-inch on the LCD space. But I think we’ve been hoping to get a larger market share there as they transition to 12-inch wafers. Has that materialized for you?

I will say yeah. But you know that right now only the LCD device is to be used for the small panel. They were booked to 12-inch wafers especially for the smartphone and tablet PC. So for this part of business, we would get large market shares as compared to the 8-inch wafer stock. So we qualified as the customer demand on LCD device, we moved to 12-inch wafer, we will gain market share from there.

Okay. Are you starting to see that already or still has it happens?

We are really seeing order continuing to increase.

Okay. Great. Well, thanks. Congratulation, guys. And I'll follow-up with you offline.

Okay.

Okay. Thank you.

Our next question is coming from the line of Scott Bishins with Caffeine Holdings. Please state your questions.

Yeah. Hi, S.J. and S.K. great quarter. Actually everything came in very much in line with what you guys gave guidance. I have a couple of questions talking about 2013. Could you give us an idea, what the depreciation would be for the full year of 2013, I know it was about $160 million for 2012?

We'll be around $120 million.

About a $120 million.

Yeah.

So, you are saying it will be about $40 million less than last year?

Yeah. We -- for the 2012, the depreciation will be around 158.

Okay. So, another words, we should expect about another $1.20 or so in earnings less taxes which we probably bring this probably about $2 a share for 2013?

Yeah. As we can maintain the revenue, the business loadings and right product mix. I’m sure that we can maintain the gross margin and cash flow.

Yeah. Because actually I’m taking a look at this without any revenue growth for 2013, we do have a five -- I’m talking about revenue growth, do you have any idea yet on what kind of revenue growth we are looking for 2013?

Scott. This is S.J. Right now, it’s early too to say the whole year of 2013, but as -- among the management team, we said that we’ll try and manage balance sheet for us. We’re trying to -- I take a conservative position in capital expenditure and which trying to control and maintain, we increase 10% on annual revenue. I told this probably was during the secondary offering to the most of the shareholders. And we are more focused on the increased efficiency, further cost reduction and use our engineer effort to expand our equipment lifetime. And we are continuing to generate free cash flow and pay down the debt instead of -- due to higher capital investment for the revenue growth.

Okay. And so couple questions. I know that Brian mentioned about the buyback and I guess the limitation on the cash that’s available in Bermuda. Is there any reason why ChipMOS Taiwan can buy -- do a buyback on ChipMOS -- on IMOS shares?

Actually, we had some discussion with our board and with our legal counsel and they don’t recommend we do so, because that would create so called derivative party transition.

Across earning issues, the Taiwanese securities laws they put EBITDAs to -- for EBITDA ChipMOS Taiwan to hold mature issue holders shares. So, as any companies hold ChipMOS Taiwan more than 50%, the ChipMOS Taiwan couldn’t use money to buy their shares.

Was there any way to dividend some money from ChipMOS Taiwan to ChipMOS Bermuda to do a buyback?

Yeah. We can do that. I think so, ChipMOS Taiwan making money in 2012. So, we should do dividend these situations by Q2 next year.

After a shareholders need their approval?

Yeah.

Okay. Well, I mean if that the case and as we look in the second quarter 2013, when the money would get there. Is there any way to borrow money at the ChipMOS Bermuda level? I know that we’ve used assets before when we used to have loans at ChipMOS Bermuda. Is there any way to borrow money where we could use that money maybe do a buyback, it just seems so crazy at these prices I mean…

It is not crazy -- it is not crazy. It’s still worth, but we don’t recommend to do this. We would reserve this as downloading capacity for other purpose, so for example for the corporate restructure or some other activities.

Is it your belief that we might need the money in ChipMOS Bermuda to do when there is tender rough possibly to pay cash out for share of ChipMOS Bermuda?

This one of -- I think that one of the use of the -- our financial resources seeing my tender.

Okay. Just a couple of other questions about the Micron business, I know with -- it looks narrow that the approval for the Elpida is going to go through. What kind of increase do you feel that we would get through the merger now with Elpida and Micron, do you believe that that will give us a bigger revenue bump in 2013?

This is S.J. based on the -- right now it’s too early to say, because Japanese bankruptcy that’s approve process by the whole idea is not done yet. But in the Q4, we see that good supplier for the DRAM pricing, especially for ASP, Elpida is a very low environment. And you can see in Taiwan promote is all again and small chip is under the water and also not there further cut down the output and including Elpida, so although DRAM commodity environment is not good as we expected. So for long worldwide we maintain a very healthy relationship and then also follow a relationship with Micron. Once that is done, I think we can depend on it. That will give us same statement in conference call.

Okay. That answers everything for me. So, thank you very much and again congratulations. Hopefully it looks like year 2013 is going to be the year that we get our true valuation, so again thanks -- thank you very much and keep up the great work.

Yeah.

Our next question is coming from the line of Richard Shannon with Craig-Hallum. Please state your question.

Hey, guys. Just a couple quick follow-ups. I think Scott asked the few questions on some of your 2013 numbers. I just want to dive in to couple other ones and also confirm at so S.J. I think you made a comment and expectation for CapEx for next year. What should we view that’s -- that number in a range or kind of the sealing number that we should think about?

I see it as pretty similar like this year.

Similar to this year?

Yeah. And we still try to control our capital expenditure within our 15% of our annual revenue.

15% okay. And then how should we think about free cash flow, I mean clearly haven’t given this revenue growth target per se, but you talked about the depreciation. Any reason why free cash flow can’t be in a similar range to 2012 as well?

Free cash flow for 2013 that we have downward -- that we can maintain the CapEx at the level we have right now that free cash flow should be the around $80 million, $90 million at least for next year.

Okay. And then S.K. just for modeling purposes, how should we think about the overall tax rate and then how do we think about that non-controlling stake from the non-controlling stake back out for next year as well?

Tax rate 17% and for modeling should be around $15 million for whole year. And yeah, about $15 million and we say around $5 million in Q4, $2 million in Q1, $3.5 million, Q2, $4.6 million for Q3.

Okay. Great. And then just a couple other quick questions for me. Can you identify and quantify your 10% customers in the third quarter?

10%, Novatek 21%, Micron is 13% and third largest, it’s Winbond 7%.

7%, okay, great. And then just follow-up question from earlier from another caller, your share in bumping you differentiated between share in 8 inch and 12 inch. Can you help us quantify what you think your share is in 8 inch and where you think you could go in 12 inch and give us a sense of what kind of share gains you could get as that transition occurs?

Richard, this is S.K. Right now, we don’t have any guidance to increase our 8 inch gold bumping capacity. We focused our effort and result in 12 inch, which including that they always gain capacity. And 8 inch we have further for the immediately improving and cost reduction, this is the valuation. Regarding the 8 inch, right now we give very high dilution rate, the running rate is around 85,000 with one that’s fully utilized.

Okay. Great. I think that will do for me, guys. Thanks once again.

Okay.

Our next question is coming from the line of [Al Tobaya with Sirius Partners]. Please state your question.

Hi. Thank you. My question was answered. It was really pertaining to the buyback and we’ve been through that now.

Okay.

Thank you. Our next question is coming from the line of Scott Bishins with Caffeine Holdings. Please state your questions.

Yeah. Hi again, just a follow-up on the taxes. I know that we have been accruing taxes now for last two quarters and I was just wondering don’t we have any carry back taxes and why we will be paying taxes now if we do have some carrier backs?

We currently we don’t have the losses carry-- it is a credit related -- the tax credit carry on for the company so we take we -- the average effective rate for the company is up 17%.

17%.

Yeah, 17%.

But don’t we have accumulative losses from last three, four years?

No. Accumulative losses -- we have only one company that accumulate low losses that is ChipMOS Shanghai. It’s not for hiring and for ChipMOS Taiwan.

Okay. Okay. Thank you.

Yeah.

There are no further questions at this time. I would now like to turn the floor back over to management for closing remarks.

Yeah. Thank you everyone for listening to our Q3 conference call. Management team will give our best effort to continue to deliver good results in the coming quarter. Thank you again, thank you for your joining. Bye-bye.

Thank you. Bye-bye.

Ladies and gentlemen, this does today's teleconference. You may disconnect your lines at this time. And we thank you for your participation.