April 7, 2004 – As expected, Singapore’s ST Assembly Test Services Ltd. (STATS) and ChipPAC Inc. have announced their combined capital expenditure budget in 2004 will be $300-$390 million, lower than their previous individual spending plans for both this year and 2003, according to Reuters.

Before STATS’ acquisition of ChipPAC was announced in February, their combined capex budgets for 2004 totaled roughly $410 million, up from $362.6 million in 2003, but ChipPAC chairman and CEO Dennis McKenna admitted that the merger would create “an opportunity for capex to be lower.”

In January, STATS revealed it had budgeted $200-$250 million for capital spending this year for investments in test equipment and packaging technology, and expanding facilities in Singapore, Taiwan, and China.

The companies also have revealed that their 2004 spending plan, which involves increasing test and assembly capacity and replacing existing machinery, may require taking on additional debt or equity financing.