Greetings and welcome to the ChipMOS Bermuda's second quarter 2013 results conference call. At this time, all participants are in a listen-only mode. A brief 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 sir, you may begin.

Thank you, operator. Welcome everyone to ChipMOS' second quarter 2013 results conference call. Joining us today from the company are Mr. S.J. Cheng, Chairman and Chief Executive Officer; and Mr. 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 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. At this time, 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 second quarter 2013 conference call. This was another strong quarter for us our result was in line with guidance. Outside of ChipMOS, industry comments have created a lot of noise in the market, while the OSAT companies reporting, at what outlook may be. It is worth nothing for those new to ChipMOS or the OSAT outside sector. Thus OSAT companies performed to grow very differently based on the end market broachers, this is compound by customer-based serves we any given market. CapEx spending and tightening of (Inaudible) further compounds the impact of both the upside and the downside. So with ChipMOS we had continued to outperform most of our peers. This is due to decision made a few years back, and as certainly do we continue to execute on. We made strategic decision to give out our LCD driver business, we reduce exposure in the commodity [wise size] and we are (Inaudible) the four customers we sought had defendable market positions. Those customers have continued to grow and we have mutual benefits from our relationships. Our second quarter results, represented the same of our strategy, this also (Inaudible) continued conversation as we move through the second half. We'll be giving more details in a minute. Our Board of Directors have approved an increase in our CapEx budget for 2013, demand is so strong in our LCD driver business. Thus we need to put in CapEx by about 6 months for 2014. This will allow us to support our customers growth program and capital end markets. With that as background, Q2 revenue was US$164.9 million up about 12% compared to Q1, Q2 gross margins on a consolidated basis was 15.4% this comparing to the 13.9% in Q1. As we benefit from a favorable…

Thank you, S.J. All dollars amount starting our business starts in U.S. dollars putting up variety post U.S. dollars and (Inaudible) in our press release. The following numbers are based on the (Inaudible) on NT$39.96 against the US$1 as of June 28, 2013. As S.J. has just reviewed our revenue and margins; I will provide details on the rest of our Q2 results. Net income for the second quarter of 2013 was 12 million and US$0.41 per basic common shares, and US$0.40 per diluted common shares, compared to net income of 12.1 million and US$0.42 per basic common shares and US$0.41 per diluted common shares in the third quarter of 2013. Our operating expense in Q2 was 14.1 million compared to 9.6 million in Q1, which included an additional 2 million of royalty accrued in other operating expense and an increase of 1.6 million of G&A expenses mainly from professional fee and employee [conversations]. In our cost of goods sold, we accrue approximately additional 1.3 million of inventory loss due to a decline in the price of gold. We also incurred approximately 0.8 million in additional expenses on valuations of employees, stock options and shares appreciating rights, given the increase in the price of our common share. Other income in Q2 was 9.2 million, which included 2.5 million of gains on equipment and scrap materials disposal, 2.2 million of allowance reversal for top four receivables, and 4.1 million of reversal of royalty fees. Now operating income in Q2 was 0.5 million, including foreign exchange gains of 1.6 million and net interest expense of 1.3 million. Income tax expenses in Q2 was increased to 6.4 million which included 2.3 without impact for the dividend distributing from ChipMOS Taiwan to ChipMOS Bermuda. As amended Q2's revenue [went] downward 24% in testing, 32%…

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Thank you. Our first question comes from the line of Tim Arcuri with Cowen Capital. Please proceed with your question.

First of all, S.K. can you give us some sense of what gross margin will look like by segment in Q3?

In Q2 or Q3?

In the Q3, September.

In September, the gross margins for the third should be around 20% to 21% and for the assembly should be around of 12% to 13%, drive IC is 31% and the (Inaudible) should be 16%, 17%.

Great okay thanks for that. And can you give us a sense of what the 10% customers were in June? Thanks.

10% customers in June, [Novatech] is number one close to 20%, micron is number two 15.02% the revenue contributions and the third one is (Inaudible) 8.3% and that’s been 10%, we only have two customers which is more than 10% revenue contribution in June quarter.

Great, and then just last thing from me. Can you give us a sense on the update related to the timing of the offering, should we expect that in the next couple of weeks or what’s your set there? Thanks so much.

Right now is actually we involved in the legal process so we couldn’t provide the details stages or timings on this but I was sure of that we actually maintained the [10] schedules for our distinct applications, as we mentioned before that this will be in November of this year, that we will submit all applications. And right now we are working on these the reductions so that [power] specimens and working on the bigger company to make the list in requirements.

Our next question comes from the line of Richard Shannon with Craig-Hallum. Please proceed with the question.

Hey, S.J. and S.K. how are you doing?

(Inaudible)

Excellent. Well very nice results again and looks like you had some good momentum in the LCD side of your business. I would like to ask a couple of questions on your new CapEx outlook especially for LCD here. S.J. in your prepared comments you said that you are investing prudently and not investing too far ahead of demand. Is there any sense of contracts or agreements in place that you have the customers to back sell this capacity and can you give us any sense and certainty of that?

Yeah. Richard to answer your question like recently seems our customer switching that product to the higher performance wide especially for high resolution TV and smartphone. As those kinds of IC need a longer testing pad I compare with the existing product. And as so we do need a longer testing pad to serve the same to sell to the customers. So that's a major reason we increased CapEx to add testing equipment and those capacity already for customer.

Okay. You referenced potentially gaining some new customers with this CapEx any more detail on that, and perhaps by large screen or small screen or anything along those lines we would be great to hear about?

We think to say so it's product for [testing] product segment, both majority coming from the larger screen. And also small screen is a smartphone, so both. And also one of the new applications we had a other customers they use the same LCD driver solutions for the finger print (Inaudible) so that’s also nimble capacity product.

Okay. Fair enough. And then what’s this increasing investment here is this you expect to gain share or is this just kind of investing to keep up with the market in any way?

I think we will maintain allocation percentage for our existing customers. And also gain the product is switching.

Okay. And then just one last question on this topic S.J. is it you said you talked about it being a pull in CapEx so does this suggest that CapEx for 2014 will marginally downward by the same amount you are raising this year or how can you give us a sense of how that will trend?

Yeah as you just, we are very focused on pursuing higher margin revenue opportunity in our key market areas. So we are not providing the interest for 2014 CapEx at this moment but we can assume you we will remain conservative in our CapEx spending. And we don’t have any intention of spending ahead of the demand. So by putting CapEx by about six months we are able to take advantage of existing company opportunities in our higher margin LCD driver spend. And we expect to see continuous growth on capacity use is [made] by new application in the mobile consumer space. because many of them require longer testing time. So based on the current requirements, the CapEx we invest six months earlier in 2013 fully talked about customer already and by 2014 we cannot talk right now but we will keep updating in the Q3 conference call.

Okay, that’s fair enough and a couple more questions for me and I'll jump in the line, guys. The follow up on the previous questions regarding the Taiwan listing update. As you've gone through the process over the last quarter, are there any significant roadblocks that have come up here? It sounds like generally confirming the timeframe by which you expect to complete the process in the second quarter next year were there any road blocks that have popped up and then also getting the stake of ChipMOS Taiwan below 70%, any more clear sense of the timing of that?

Yes, as S.K mentioned, a [recourse] a couple million [recourse], I think they have legal [problems]. So we cannot, very limited in providing update on potential timings, but we can tell you is so far so good. They are under the right tracks and as our previous occasions.

Okay, that’s great and just one last question for me. It sounds like you're really improving your business in NAND Flash. Can you give us a sense of percentage of sales for that? Where it could go maybe in a few quarters and then I think you talked about the assembly business growing substantially in the third quarter as a significant portion of that coming from NAND?

Yes. I think maybe your next question is how about the [Micro] one, okay that, let me take this opportunity to answer your question also including the Micro’s one. We continue a very stable relationship with [Micro]. As you know, we helped to support [Micro] and commodity and several (Inaudible) assembly but we also recently been spreading into NAND Flash opportunity. And we make a small CapEx investment to supporting that growth, that means with that investment (Inaudible) and hamper our capacity into the NAND. And recent comments of [Micro] indicate that as a portion of the testing in the assembly (Inaudible) after Micro consolidation of (Inaudible) would not be shipped this is being due to the avoid any disruption. So in summary, we continue have a stable relationship with our customers and we expand our relationships. So we have increased our revenue of opportunity maintaining our durability, (Inaudible) of new NAND Flash revenue effect by a small CapEx investment. And overall this is partly positioned for us because we are continue to with our given share a spend the NAND Flash revenue, why not needed to make larger CapEx commitment and (Inaudible) we provided NAND Flash assembly also for some (Inaudible) company in Asia.

Okay. Great guys that all from me I will jump at line thank you.

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

Hi another excellent quarter. S.K. I wanted to ask you real quickly, you reported earlier in the quarter that there was an US$8 million payment made to [Free Scale], how does that impact the income statement and revenue and where do we see that going through here?

Okay, we tend our US$8 million and this is a record in the two months. In the other operating incomes, we have the reversals of the royalty of US$4.1 million. But again we accrued another US$2 million for the royalties for the Tessera case. So overall for the company we have 2.1 million reversal of the royalties into the (Inaudible). Other operating incomes we have 4.1 million reversals and in the other operating sense we have 2 million accruals, so the operating income we have roughly 2.1 million increase - in this operating income we have US$2.1 million increase on this case.

Okay, and (Inaudible) scale so that’s out of the question. What is ended up with the results from Tessera?

Tessera case is still ongoing and actually from to time in it has been about the mediations, but we didn’t come to a solid discussion with them on this issues.

Okay, and there are already expense accrued for that?

Yes, we have 2 million accrual for this case.

Okay. One last thing S.J. mentioned you bought around 83,000 shares of stock. Why the slow pace of buybacks, I mean the stock has come down a lot in the last month and a half, just had a nice run in the last couple of days because we got a significant new investor. Why the slow pace of buyback?

We actually have limited the buyback amount per say, and we said in (Inaudible) organisms and mechanism for this. So the purpose of this buyback is to enhance shareholders value. So we have this program enter with 18 products which add value initiative. So we don't buy the share apparently from a market, we just try to generate more profit for our shareholders.

Okay, it was a small program, shouldn’t we be more aggressive in buying the stock back, it’s very cheap

I think your message is very clear for us. We will remain active in the market for the rest of the purchase and we may go to our Board to review the program to see how can we stay more active in the market.

Our next question comes from the line of (Inaudible) with Credit Suisse. Please proceed with your question.

Hi good evening, S.J., S.K. congratulation on good quarter. Two questions on the LCD side, just want to be clear that S.J. has mentioned that your new capacity or new CapEx spending will be for testing only or you are also be adding more capacity on COG, COF packaging or bumping? That’s the first question. Second question is that could S.J. give more color on the growth driver for the LCD business in third quarter, is that coming from smartphone related or is mainly coming from larger size TV? Thank you.

Yeah [Jerry] to answer your question, majority of the CapEx are going to invest in the industry test does take a majority of it, and we also prepare some letting and the (Inaudible) machines thus for both COF and COG and (Inaudible) supporting including for their process assembly and for LCD driver business for the two next quarters. For existing customers we are trying to maintain our allocation percentage right now and trying to get a more allocation in the market and we also get some new customers via the new application, they can apply for our existing COF capacity The product is finger print sensor not (Inaudible) for new cellphone, smartphone and some mobile and security products and we also get some customers who go (Inaudible) application. Jerry, did I answer your question?

Okay, so I think what you mentioned is that you are gaining share across the board and then but on end multi-demand can you help us understand that for the third quarter, what the strongest gross product? Is it for smartphone or it's from our largest site given a TV or IT monitors?

Yes, actually coming, the major one is still coming is from 2K, 4K TV. As you may know, the new UHD TV, 2K, the driver quantity is two times and 4K the driver quantity is four times. That’s what driver wise and I think right now I think market clearly has some noise about the inventory assessments but based on our capital of 4K, this deal has very solid [competence] on our guidance.

(Operator Instructions) It appears we have no further questions at this time. I would now like to turn the floor back over to management for closing comments.

Thank you, everybody for joining our Q2 conference call. Thank you very much. Bye, bye.

Thank you. Have a nice day.

And ladies and gentlemen this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.