STATS and Infineon Sign Wafer Testing Agreement; Ten-year agreement names STATS as test subcontractor for Infineon's semiconductor products.

Business Editors and Technology Writers

SINGAPORE and MILPITAS, Calif.--(BUSINESS WIRE)--May 17, 2000

ST Assembly Test Services ("STATS")(Nasdaq:STTS)(SGX:ST Assembly), a leading independent semiconductor test and advanced packaging service provider, announced today the signing of a ten-year agreement with Infineon Technologies AG ("Infineon")(FSE/NYSE:IFX).

Infineon is one of the world's top ten semiconductor manufacturers of application-oriented semiconductor solutions for wireless communications, automotive and industrial electronics, security and chip cards, and memory products.

The agreement names STATS as a provider of wafer sort test services and periodic test program conversions for integrated circuits manufactured by Infineon and its subsidiaries worldwide.

"Under the agreement, STATS will operate as an extension of Infineon's manufacturing structure," said Dr. Benno Fritzler, Infineon's Silicon Foundry Director. "The ability to test both digital and mixed-signal semiconductor products makes STATS a 'virtual' complement to our state-of-the-art semiconductor manufacturing facilities around the world."

"This seamless outsourcing structure will further improve the level of responsiveness and service we provide to our customers," added Dr. Fritzler.

The high-speed digital and mixed-signal test services will be provided to Infineon from STATS' 560,000 sq. ft., ISO 9001/14001-registered and SAC Level 1-certified test and assembly facility in Singapore.

"We're delighted that a leading semiconductor company of Infineon's stature has chosen STATS to complement their global manufacturing capability," said Ray Lilley, European Director for STATS. "This long term partnership with Infineon could potentially generate significant revenues for STATS over the next ten years."

ST Assembly Test Services ("STATS" -- Nasdaq:STTS and SGX:ST Assembly), known for its advanced packaging principles and both mixed-signal and high speed digital test capabilities, supports the outsourcing requirements of wafer foundries, integrated device manufacturers, and fabless semiconductor companies worldwide. STATS provides complete back-end turnkey solutions in partnership with today's leading system manufacturers in the computer, networking, and communication markets. With 2,300+ employees and principle operations in Singapore, STATS maintains ISO 9001/14001-registered and SAC Level-1 certified quality system environments throughout its facilities in Singapore and the United States. Further information is available at www.StatsUS.com.

Certain statements in this press release are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. For a discussion of certain factors that could cause actual results to differ, we refer you to our SEC filings, including the STATS annual report on Form 20-F for our fiscal year ended December 31, 1999.