“We expect margin pressure to continue in the near term as we are moving away from the impact of unfavorable work-in-progress build-up in this and the prior quarter, to that of dealing with the challenges of rising input costs. Crude oil price increases, a weaker US dollar and input cost increases in items such as chemicals, process gases and supplies are nullifying the results of our cost reduction and productivity improvement efforts. Specifically, we expect a substantial increase in our energy cost in the fourth quarter due to the expiration of our long-term fixed rate contract for power supply. Due to the unprecedented situation and limited opportunities to offset such increases through internal cost reduction measures in the near term, we have initiated discussions with our customers to share the cost increases,” said Chia Song Hwee, president & CEO of Chartered.

“Though we have not seen any broad-based reduction in our customer demand, we continue to be cautious about the worsening economic situation as we manage our business. However, we are not losing sight of the longer-term opportunities ahead of us, and we are at a point where we can no longer defer enabling 45nm capacity. An additional cash-flow based capital expenditure of $160 million for the year is required to support our early customers at 45nm in 2009 as well as for rebalancing the mix between 65nm and 45nm. As we further ramp our 65nm programs and execute on our 45nm offering and production ramp, we are addressing the margin challenges internally as well as in collaboration with our customers and suppliers in order to improve our financial performance,” concluded Chia.

Webcast Conference Call Today

Chartered will be discussing its second quarter 2008 and third quarter 2008 outlook on a conference call today, July 25, 2008, at 8:30 a.m. Singapore time (US time 5:30 p.m. PT/8:30 p.m. ET, Thursday, July 24, 2008). A webcast of the conference call will be available to all interested parties on Chartered’s website at www.charteredsemi.com, under Investor Relations, or at http://ir.charteredsemi.com.

Mid-Quarter Guidance

The Company provides a guidance update midway through each quarter. For third quarter 2008, the Company anticipates issuing its mid-quarter guidance update, via news release, on Wednesday, September 10, 2008, Singapore time.