ASE subsidiary absorbing materials business

May 2, 2006 – In a move to focus on core competencies, semiconductor assembly and test services provider Advanced Semiconductor Engineering Inc. says it plans to transfer its substrates and packaging materials business department to subsidiary ASE Electronics Inc. The proposed deal will be voted upon at the company’s annual shareholders meeting in June.

The transaction will involve transferring assets of roughly US $129.1 million, as well as about $62.3 million in liabilities, for a net value of about $70.6 million. ASE will receive 1 common share of ASE Electronics Inc. for every NT$10 of total net value of the materials business department to be transferred, and will receive a total of 225,467,364 new shares issued by ASE Electronic Inc. Total paid-in capital will amount to about $71.6 million. ASE Electronic Inc. will remain a wholly owned subsidiary of the company.

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