Chartered Reports Results for Second Quarter 2006

-- Chartered revenues of $364.8 million in 2Q 2006, up 88.0 percent from 2Q 2005 and up 2.7 percent sequentially. Revenues including Chartered's share of SMP of $393.7 million, up 79.0 percent from 2Q 2005 and up 2.0 percent sequentially.

-- Net income of $12.3 million, compared to net loss of $67.1 million in 2Q 2005 and net income of $25.3 million in the previous quarter.

Chartered Semiconductor Manufacturing (Nasdaq:CHRT)(SGX-ST:CHARTERED), one of the world's top dedicated semiconductorfoundries, today announced its results for second quarter 2006.

"Chartered revenues in second quarter 2006 were up 88 percent andrevenues including our share of SMP were up 79 percent compared to theyear-ago quarter, in line with the guidance we provided on June 6,2006. Revenues from 0.13-micron and more advanced technologiesaccounted for approximately 50 percent of our total business baserevenues, reflecting the technology position we have today," saidGeorge Thomas, senior vice president and CFO of Chartered.

Summary of Second Quarter 2006 Performance

-- Revenues were $364.8 million in second quarter 2006, up 88.0 percent from $194.0 million in second quarter 2005. Revenues including Chartered's share of SMP were $393.7 million, up 79.0 percent from $219.9 million in second quarter 2005, primarily due to significant growth in the consumer sector followed by the communications and computer sectors. Sequentially, revenues were up 2.7 percent from $355.2 million in first quarter 2006. Revenues including Chartered's share of SMP were up 2.0 percent from $386.1 million in first quarter 2006 primarily due to strength in the computer sector and to a lesser extent the communications sector, partially offset by weakness in the consumer sector.

-- Gross profit was $87.9 million, or 24.1 percent of revenues, up from a gross profit of $0.4 million, or 0.2 percent of revenues in the year-ago quarter, primarily due to significantly higher revenues. Gross profit was down $4.5 million sequentially from $92.4 million, or 26.0 percent of revenues in first quarter 2006, despite higher revenues, due to higher cost per wafer resulting from a less favorable mix associated with production levels during the quarter.

-- Research and development (R&D) expenses were $38.2 million, compared to $27.7 million in the year-ago quarter, primarily due to higher activities related to the advanced 65nm technology node and development of design kits and intellectual property solutions. Sequentially, R&D expenses were higher compared to $34.1 million in first quarter 2006, primarily due to higher activities related to the advanced 65nm technology node.

-- Pre-production fab start-up cost was nil in second quarter 2006 as Fab 7 started commercial production during second quarter 2005. Pre-production fab start-up cost was $7.9 million in second quarter 2005.

-- Sales and marketing expenses were $12.2 million, up 20.2 percent compared to $10.1 million in the year-ago quarter, primarily due to higher payroll related expenses and higher financial support for pre-contract customer prototyping activities. Compared to the previous quarter, sales and marketing expenses were down 11.7 percent from $13.8 million, primarily due to lower expenses related to Electronic Design Automation (EDA) offerings.

-- General and administrative (G&A) expenses were $9.9 million, compared to $10.7 million in second quarter 2005.

-- Equity in income of Chartered's minority-owned joint-venture fab, SMP (Fab 5), was an income of $7.9 million compared to an income of $0.8 million in the year-ago quarter, primarily due to lower depreciation and higher revenues. Compared to the previous quarter, equity in income of SMP was down 21.9 percent from $10.2 million, primarily due to lower revenues.

-- Other income (loss), net, was a charge of $7.8 million compared to a credit of $3.6 million in the year-ago quarter and compared to a charge of $2.5 million in the previous quarter, primarily due to losses resulting from foreign currency fluctuations and changes in fair value of an interest rate swap.

-- Net interest expense was $10.1 million, compared to $8.6 million in the year-ago quarter, primarily due to higher interest expense resulting from higher interest rates and lower interest capitalization associated with the ramp of Fab 7, partially offset by higher interest income. Compared to the previous quarter, net interest expense was down 27.5 percent from $14.0 million primarily due to higher interest income resulting from higher principal balances and interest rates.

-- The financial position of Chartered's consolidated joint venture fab, Chartered Silicon Partners (CSP or Fab 6), continued to be in capital deficit in second quarter 2006, and therefore none of the loss of $7.8 million in the second quarter was allocated to the minority interest. At the end of second quarter 2006, CSP's capital deficit was $408.5 million.

-- Net income was $12.3 million, or 3.4 percent of revenues, compared to a net loss of $67.1 million, or negative 34.6 percent of revenues, in the year-ago quarter, and a net income of $25.3 million, or 7.1 percent of revenues, in the previous quarter.

-- Basic earnings per American Depositary Share (ADS) and basic earnings per share in second quarter 2006 were $0.04 and $0.00 respectively, compared with basic loss per ADS and basic loss per share of $0.27 and $0.03 respectively in second quarter 2005. Basic earnings (loss) per share is computed by deducting from net income or adding to net (loss) the accretion to redemption value of the convertible redeemable preference shares and using the weighted-average number of common shares outstanding.

Wafer Shipments and Average Selling Prices (eight-inch equivalent)

-- Shipments in second quarter 2006 were 327.0 thousand wafers, an increase of 60.4 percent compared to 203.8 thousand wafers in second quarter 2005, and an increase of 2.7 percent compared to 318.2 thousand wafers shipped in first quarter 2006. Shipments including Chartered's share of SMP in second quarter 2006 were 355.7 thousand wafers, an increase of 58.5 percent compared to 224.5 thousand wafers in second quarter 2005 and an increase of 1.8 percent compared to 349.4 thousand wafers in first quarter 2006.

-- Average selling price (ASP) was $1,089 per wafer in first quarter and second quarter 2006. ASP including Chartered's share of SMP was $1,082 per wafer in second quarter 2006, compared to $1,080 per wafer in first quarter 2006.

Capacity and Utilization

-- Capacity utilization in second quarter 2006 was 82 percent compared to 65 percent in the year-ago quarter, and 82 percent in first quarter 2006. Capacity in second quarter 2006 was up approximately 26 percent compared to second quarter 2005 and up approximately two percent compared to first quarter 2006. Capacity utilization is based on total wafer shipments and total capacity, both of which include Chartered's share of SMP.

Utilization Table

Data including Chartered's share of SMP
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
Thousand 8" equivalent wafers 2005 2005 2005 2006 2006
----------------------------------------------------------------------
Total wafers shipped 224.5 295.2 345.8 349.4 355.7
----------------------------------------------------------------------
Total capacity 346.5 401.4 435.9 427.5 436.4
----------------------------------------------------------------------
Utilization 65% 74% 79% 82% 82%
----------------------------------------------------------------------


Capacity by Fab

----------------------------------------------------------------------
(Thousand 8" 2Q 3Q 4Q 1Q 2Q Est. 3Q
equivalent wafers) 2005 2005 2005 2006 2006 2006
----------------------------------------------------------------------
Fab 2 137.7 139.2 145.7 142.6 144.1 145.7
----------------------------------------------------------------------
Fab 3 74.3 74.2 74.2 69.5 70.3 71.0
----------------------------------------------------------------------
Fab 5
(Chartered's share) 35.8 36.2 35.6 34.3 34.6 35.0
----------------------------------------------------------------------
Fab 6 89.4 100.5 112.9 114.5 115.8 117.0
----------------------------------------------------------------------
Fab 7 (a) 9.3 51.3 67.5 66.6 71.6 89.5
----------------------------------------------------------------------
Total 346.5 401.4 435.9 427.5 436.4 458.2
----------------------------------------------------------------------
(a) Fab 7 started commercial shipment in June 2005.

Market Dynamics

The following business statistics tables provide information onrevenues including Chartered's share of SMP by market sector, regionand technology.

Breakdown by Market Sector

Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Communications 44% 38% 29% 34% 34%
----------------------------------------------------------------------
Computer 34% 25% 22% 19% 25%
----------------------------------------------------------------------
Consumer 16% 32% 45% 45% 39%
----------------------------------------------------------------------
Other (b) 6% 5% 4% 2% 2%
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Breakdown by Region

Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Americas 58% 72% 74% 70% 75%
----------------------------------------------------------------------
Europe 17% 10% 9% 12% 9%
----------------------------------------------------------------------
Asia-Pacific 16% 11% 11% 15% 14%
----------------------------------------------------------------------
Japan 5% 4% 4% 3% 2%
----------------------------------------------------------------------
Other (b) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Breakdown by Technology (micron)

Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
0.09 and below 0% 24% 28% 25% 22%
----------------------------------------------------------------------
Up to 0.13 23% 17% 20% 25% 28%
----------------------------------------------------------------------
Up to 0.15 6% 4% 4% 2% 1%
----------------------------------------------------------------------
Up to 0.18 18% 9% 12% 11% 14%
----------------------------------------------------------------------
Up to 0.25 11% 10% 6% 9% 9%
----------------------------------------------------------------------
Up to 0.35 26% 21% 20% 18% 15%
----------------------------------------------------------------------
Above 0.35 12% 12% 8% 10% 11%
----------------------------------------------------------------------
Other (b) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
(b) 2Q 2005 - 4Q 2005: Includes revenues from services related to
generation of customers' mask sets.

Recent Highlights and Events

-- Chartered signed an agreement with Microsoft for the manufacturing of CPU products - using 65nm Silicon-on-Insulator (SOI) semiconductor technology - for Microsoft's Xbox 360 game consoles. Production is expected to begin in the first quarter of 2007. This follows Chartered's successful manufacturing of 90nm SOI CPU products for Xbox 360 game consoles, through an agreement with IBM.

-- Chartered announced the licensing of 90nm SOI technology from IBM. The agreement enables Chartered to expand the use of the technology to areas such as consumer, multi-media, communications, automotive and industrial applications, thereby delivering more choice and flexibility to foundry customers for manufacturing their leading-edge products.

-- Chartered began first revenue shipments of AMD64 processors in June 2006. AMD and Chartered ramped 300mm production at Fab 7 in record time, hitting all major milestones and starting production at mature yields. Initial shipments out of Chartered consisted of microprocessors manufactured on 90nm process technology.

Review and Outlook

"As we go into the third quarter, we are seeing changes in outlookfrom our customers," said Thomas. "We believe customers are cautiousabout their inventory positions, and some are reacting tosofter-than-usual seasonality in some of the end markets. As a resultof this, our outlook for the third quarter 2006 is now weaker thanwhat we had anticipated earlier. However, this weakness is offset to asignificant extent by the new businesses such as the AMDmicroprocessor ramp in the third quarter.

"Based on our current outlook, we expect Chartered revenues forthird quarter 2006 to be essentially flat and revenues including ourshare of SMP to be slightly down, compared to the second quarter. Incomparison to the second quarter, we see significant weakness in theconsumer sector, primarily due to decline in revenues from video gamedevices. The communications sector is expected to be weaker to alesser extent, offset by strength in the computer sector. We expect autilization rate of approximately 75 percent for the third quarter,after comprehending a sequential increase in capacity of approximatelyfive percent. Revenues from 0.13-micron and below technologies,including 90nm, are expected to represent around 51 percent of ourtotal business base revenues. 90nm revenues alone are expected to growapproximately 25 percent sequentially and contribute approximately 28percent of our total business base revenues."

The outlook for third quarter 2006 is as follows:

2Q 2006 3Q 2006 Guidance
-------- -----------------------------
Actual Midpoint and Sequential
range change
----------------------------- -------- ----------------- -----------
Down 2% to
Revenues $364.8M $362M, +/- $6M up 1%
----------------------------- -------- ----------------- ----------
Revenues including Flat to
Chartered's share of SMP $393.7M $387M, +/- $7M down 3%
----------------------------- -------- ----------------- ----------
Up 1% to
ASP (c) $1,089 $1,117, +/- $20 up 5%
----------------------------- -------- ----------------- ----------
ASP including Chartered's Flat to
share of SMP (c) $1,082 $1,102, +/- $25 up 4%
----------------------------- -------- ----------------- ----------
Utilization 82% 75%, +/- 3% -
----------------------------- -------- ----------------- ----------
Gross profit (loss) $87.9M $90M, +/- $6M -
----------------------------- -------- ----------------- ----------
Net income (loss) (d) $12.3M $11M, +/- $5M -
----------------------------- -------- ----------------- ----------
Basic earnings (loss) per ADS $0.04 $0.03, +/- $0.02 -
----------------------------- -------- ----------------- ----------
(c) Eight-inch equivalent wafers.
(d) Net income includes the negative profit impact from losses
attributable to minority interest, which was $3.8 million in
second quarter 2006, and is projected to be approximately $4.0
million in third quarter 2006.

CEO Closing Comments

"The recent change in the semiconductor market outlook is largelyunanticipated. While we are on track to capitalize on new engagementssuch as AMD and customers using our value-added solutions, we do seethe general market weakness slowing our overall growth plan for thisyear," said Chia Song Hwee, president & CEO of Chartered.

"There are near-term challenges that we need to address due to thecurrent market environment. However, we remain committed to our growthstrategy and the direction of our company remains unchanged. As weexecute on our 90nm engagements, we are also currently engagingmultiple customers at the 65nm node and are pursuing opportunitiesfrom new markets and customers," concluded Chia.

Webcast Conference Call Today

Chartered will be discussing its second quarter 2006 results andthird quarter 2006 outlook on a conference call today, July 21, 2006,at 8:30 a.m. Singapore time (US time 5:30 p.m. PT/8:30 p.m. ET,Thursday, July 20, 2006). A webcast of the conference call will beavailable to all interested parties on Chartered's Web site atwww.charteredsemi.com, under Investor Relations, or athttp://ir.charteredsemi.com.

Mid-Quarter Guidance

The Company provides a guidance update midway through eachquarter. For third quarter 2006, the Company anticipates issuing itsmid-quarter guidance update, via news release, on Wednesday, September6, 2006, Singapore time.

APPENDIX A

US GAAP Reconciliation Table

In order to provide investors additional information regarding the
company's financial results as determined in accordance with US GAAP,
in this report Chartered also provides information on its total
business base revenues, which include the Company's share of Silicon
Manufacturing Partners ("Revenues including Chartered's share of
SMP"). SMP is a minority-owned joint-venture company and under US GAAP
reporting, SMP revenues are not consolidated into Chartered's revenues
("Revenues"). References to revenues including Chartered's share of
SMP in this report are therefore not in accordance with US GAAP. To
ensure clarity, the tables below provide a reconciliation.

----------------------------------------------------------------------
3Q 2006
2Q 2005 1Q 2006 2Q 2006 Guidance
Actual Actual Actual Midpoint
----------------------------------------------------------------------
Revenues (e) $194.0M $355.2M $364.8M $362M
----------------------------------------------------------------------
Chartered's share of SMP
revenues $25.9M $30.9M $28.9M $25M
----------------------------------------------------------------------
Revenues including Chartered's
share of SMP $219.9M $386.1M $393.7M $387M
----------------------------------------------------------------------


----------------------------------------------------------------------
ASP (e) (f) $913 $1,089 $1,089 $1,117
----------------------------------------------------------------------
ASP of Chartered's share of
SMP revenues (f) $1,253 $992 $1,004 $925
----------------------------------------------------------------------
ASP including Chartered's
share of SMP (f) $944 $1,080 $1,082 $1,102
----------------------------------------------------------------------
(e) Determined in accordance with US GAAP.
(f) Eight-inch equivalent wafers.


Breakdown by Market Sector

Revenues (US GAAP) (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Communications 43% 36% 28% 31% 32%
----------------------------------------------------------------------
Computer 32% 24% 19% 18% 24%
----------------------------------------------------------------------
Consumer 18% 35% 48% 49% 41%
----------------------------------------------------------------------
Other (g) 7% 5% 5% 2% 3%
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Chartered's share of SMP revenues (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Communications 44% 54% 42% 75% 63%
----------------------------------------------------------------------
Computer 51% 37% 51% 22% 32%
----------------------------------------------------------------------
Consumer 3% 7% 6% 3% 5%
----------------------------------------------------------------------
Other 2% 2% 1% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Communications 44% 38% 29% 34% 34%
----------------------------------------------------------------------
Computer 34% 25% 22% 19% 25%
----------------------------------------------------------------------
Consumer 16% 32% 45% 45% 39%
----------------------------------------------------------------------
Other (g) 6% 5% 4% 2% 2%
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Breakdown by Region

Revenues (US GAAP) (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Americas 63% 74% 76% 72% 78%
----------------------------------------------------------------------
Europe 11% 9% 8% 12% 8%
----------------------------------------------------------------------
Asia-Pacific 17% 11% 11% 13% 13%
----------------------------------------------------------------------
Japan 5% 3% 3% 3% 1%
----------------------------------------------------------------------
Other (g) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Chartered's share of SMP Revenues (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Americas 17% 43% 49% 45% 37%
----------------------------------------------------------------------
Europe 66% 28% 28% 18% 21%
----------------------------------------------------------------------
Asia-Pacific 4% 9% 17% 30% 29%
----------------------------------------------------------------------
Japan 13% 20% 6% 7% 13%
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
Americas 58% 72% 74% 70% 75%
----------------------------------------------------------------------
Europe 17% 10% 9% 12% 9%
----------------------------------------------------------------------
Asia-Pacific 16% 11% 11% 15% 14%
----------------------------------------------------------------------
Japan 5% 4% 4% 3% 2%
----------------------------------------------------------------------
Other (g) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Breakdown by Technology (micron)

Revenues (US GAAP) (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
0.09 and below - 26% 31% 27% 24%
----------------------------------------------------------------------
Up to 0.13 26% 18% 21% 27% 30%
----------------------------------------------------------------------
Up to 0.15 - - - - -
----------------------------------------------------------------------
Up to 0.18 14% 6% 9% 7% 9%
----------------------------------------------------------------------
Up to 0.25 12% 11% 7% 9% 9%
----------------------------------------------------------------------
Up to 0.35 29% 23% 21% 19% 16%
----------------------------------------------------------------------
Above 0.35 15% 13% 9% 11% 12%
----------------------------------------------------------------------
Other (g) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Chartered's share of SMP Revenues (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
0.09 and below - - - - -
----------------------------------------------------------------------
Up to 0.13 3% - - - -
----------------------------------------------------------------------
Up to 0.15 50% 47% 45% 26% 19%
----------------------------------------------------------------------
Up to 0.18 47% 43% 40% 56% 75%
----------------------------------------------------------------------
Up to 0.25 - 5% 3% 5% 4%
----------------------------------------------------------------------
Up to 0.35 - 5% 12% 13% 2%
----------------------------------------------------------------------
Above 0.35 - - - - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------


Revenues including Chartered's share of SMP (Percentage of Total)
----------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q
2005 2005 2005 2006 2006
----------------------------------------------------------------------
0.09 and below - 24% 28% 25% 22%
----------------------------------------------------------------------
Up to 0.13 23% 17% 20% 25% 28%
----------------------------------------------------------------------
Up to 0.15 6% 4% 4% 2% 1%
----------------------------------------------------------------------
Up to 0.18 18% 9% 12% 11% 14%
----------------------------------------------------------------------
Up to 0.25 11% 10% 6% 9% 9%
----------------------------------------------------------------------
Up to 0.35 26% 21% 20% 18% 15%
----------------------------------------------------------------------
Above 0.35 12% 12% 8% 10% 11%
----------------------------------------------------------------------
Other (g) 4% 3% 2% - -
----------------------------------------------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------------------------------------------
(g) 2Q 2005 - 4Q 2005: Includes revenues from services related to
generation of customers' mask sets.

About Chartered

Chartered Semiconductor Manufacturing (Nasdaq:CHRT)(SGX-ST:CHARTERED), one of the world's top dedicated semiconductorfoundries, offers leading-edge technologies down to 65 nanometer (nm),enabling today's system-on-chip designs. The company further servesthe needs of customers through its collaborative, joint developmentapproach on a technology roadmap that extends to 45nm. Chartered'sstrategy is based on open and comprehensive design enablementsolutions, manufacturing enhancement methodologies, and a commitmentto flexible sourcing. In Singapore, the company operates a 300mmfabrication facility and four 200mm facilities. Information aboutChartered can be found at www.charteredsemi.com.

Safe Harbor Statement under the provisions of the United StatesPrivate Securities Litigation Reform Act of 1995

This news release contains forward-looking statements, as definedin the safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. These forward-looking statements,including without limitation, statements relating to our outlook forthe third quarter of 2006; projected revenues and average sellingprices (including Chartered's share of SMP), utilization rate, grossprofit, net income or profit and earnings per ADS and the expectedgrowth of wafer shipments and revenue (including Chartered's share ofSMP); our expectation of revenue contribution from 0.13-micron andbelow technologies including 90nm; the revenue from (i) 0.13-micronand below technologies and (ii) 90nm as a percentage of our totalbusiness base revenues; the percentage growth of 90nm revenues; theinventory positions of our customers; the weakness in our outlook forthe third quarter 2006 and the possible offset by new businesses suchas the AMD microprocessor ramp; the weakness in the consumer sectorand communications sector and possible offset by the strength in thecomputer sector; our commitment to our growth strategy and thedirection of our company; our customer engagement at 65nm node and theestimated capacity by fabs for the third quarter 2006 reflect ourcurrent views with respect to future events and financial performanceand are subject to certain risks and uncertainties, which could causeactual results to differ materially from historical results or thoseanticipated. Among the factors that could cause actual results todiffer materially are changes in the demands from our major customers,excess inventory, life cycle, market outlook and trends or specificproducts; competition from other foundries; unforeseen delays,interruptions, performance level and technology mix in our fabricationfacilities; our progress on leading-edge products; changes in capacityplans, allocation and process technology mix, unavailability ofmaterials, equipment, manpower and expertise; access to or delays intechnological advances or our development of process technologies; thesuccessful implementation of our partnership, technology and supplyalliances (including our joint development agreements with IBM,Infineon and Samsung); the growth rate of fabless companies, theoutsourcing strategy of integrated device manufacturers ("IDM") andour expectation that IDMs will utilize foundry capacity moreextensively; demand and supply outlook in the semiconductor market andthe economic conditions in the United States as well as globally.Although we believe the expectations reflected in such forward-lookingstatements are based upon reasonable assumptions, we can give noassurance that our expectations will be attained. In addition to theforegoing factors, a description of certain other risks anduncertainties which cause actual results to differ materially can befound in "Item 3. Key Information -- D. Risk Factors" in our 2005annual report on Form 20-F filed with the US SEC. You are cautionednot to place undue reliance on these forward-looking statements, whichreflect management's current analysis of future events. We undertakeno obligation to publicly update or revise any forward-lookingstatements, whether as a result of new information, future events orotherwise.

CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of US Dollars, except share and per share data)

Determined in accordance with US GAAP

Three Months Ended Six Months Ended
June 30, June 30,
2005 2006 2005 2006
--------- --------- ---------- ---------
Net revenue $194,035 $364,829 $ 375,388 $720,060
Cost of revenue 193,591 276,965 384,658 539,807
--------- --------- ---------- ---------
Gross profit (loss) 444 87,864 (9,270) 180,253
--------- --------- ---------- ---------

Operating expenses:
Research and development 27,676 38,173 54,991 72,317
Fab start-up costs 7,876 - 22,697 -
Sales and marketing 10,112 12,158 20,619 25,928
General and
administrative 10,663 9,856 19,974 20,153
Other operating
expense (income) 3,874 184 3,850 (3,767)
--------- --------- ---------- ---------
Total operating
expenses 60,201 60,371 122,131 114,631
--------- --------- ---------- ---------

Operating income (loss) (59,757) 27,493 (131,401) 65,622
Equity in income (loss)
of SMP 776 7,947 (8,256) 18,117
Other income (loss), net 3,628 (7,821) 5,651 (10,350)
Interest expense, net (8,601) (10,125) (11,027) (24,097)
--------- --------- ---------- ---------
Income (loss) before
income taxes (63,954) 17,494 (145,033) 49,292
Income tax expense 3,147 5,170 6,586 11,698
--------- --------- ---------- ---------
Net income (loss) (67,101) 12,324 (151,619) 37,594
Less: Accretion to
redemption value of
convertible redeemable
preference shares - 2,358 - 4,782
--------- --------- ---------- ---------
Net income (loss)
available to common
shareholders $(67,101) $ 9,966 $(151,619) $ 32,812
========= ========= ========== =========

Net earnings (loss) per
common share and ADS

Basic net earnings
(loss) per common share $ (0.03) $ 0.00 $ (0.06) $ 0.01
Diluted net earnings
(loss) per common share $ (0.03) $ 0.00 $ (0.06) $ 0.01

Basic net earnings
(loss) per ADS $ (0.27) $ 0.04 $ (0.60) $ 0.13
Diluted net earnings
(loss) per ADS $ (0.27) $ 0.03 $ (0.60) $ 0.11

Number of common shares
(in millions) used in
computing:
Basic net earnings
(loss) per common
share 2,511.0 2,527.2 2,510.4 2,520.5
Effect of dilutive
options - 332.6 - 339.4
--------- --------- ---------- ---------
Diluted net earnings
(loss) per common
share 2,511.0 2,859.8 2,510.4 2,859.9
========= ========= ========== =========
Number of ADS (in
millions) used in
computing:
Basic net earnings
(loss) per ADS 251.1 252.7 251.0 252.1
Effect of dilutive
options - 33.3 - 33.9
--------- --------- ---------- ---------
Diluted net earnings
(loss) per ADS 251.1 286.0 251.0 286.0
========= ========= ========== =========



CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)

Determined in accordance with US GAAP

As of
-----------------------------

December 31, June 30,
2005 2006
-------------- ------------
(Unaudited)
ASSETS

Cash and cash equivalents $ 819,856 $ 937,942
Marketable investments 22,467 23,078
Receivables, net 184,897 219,261
Inventories 134,240 167,576
Other current assets 122,116 17,018
-------------- ------------
Total current assets 1,283,576 1,364,875
Investment in SMP 50,384 47,825
Technology licenses, net 106,612 97,101
Property, plant and equipment, net 2,049,695 2,092,971
Other non-current assets 27,027 44,622
-------------- ------------
Total assets $ 3,517,294 $3,647,394
============== ============

LIABILITIES, CONVERTIBLE REDEEMABLE
PREFERENCE SHARES AND SHAREHOLDERS' EQUITY

Payables $ 166,681 $ 230,987
Current installments of long-term debt
and capital lease obligations 322,453 161,746
Other current liabilities 244,119 211,332
-------------- ------------
Total current liabilities 733,253 604,065
Long-term debt and capital lease
obligations, excluding current
installments 1,169,034 1,363,681
Other non-current liabilities 17,970 28,163
-------------- ------------
Total liabilities 1,920,257 1,995,909

Convertible redeemable preference shares 250,663 241,481

Shareholders' equity 1,346,374 1,410,004
-------------- ------------

Total liabilities, convertible
redeemable preference shares
and shareholders' equity $ 3,517,294 $3,647,394
============== ============



CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US Dollars)


Determined in accordance with US GAAP

For The Six Months Ended
-----------------------------

June 30, June 30,
2005 2006
-------------- ------------

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) $(151,619) $ 37,594
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Equity in income (loss) of SMP 8,256 (18,117)
Cash dividends received from SMP 6,300 20,683
Depreciation and amortization 239,356 264,458
Foreign exchange (gain) loss, net 354 2,503
Gain on disposal of property, plant
and equipment (91) (4,025)
Others, net 5,309 12,481
Changes in assets and liabilities:
Receivables 14,321 (38,227)
Inventories (44,393) (33,336)
Other current assets (2,528) (2,820)
Payables and other liabilities 103,891 20,861
-------------- ------------
Net cash provided by operating activities 179,156 262,055
-------------- ------------

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment (347,950) (231,507)
Payments for technology licenses (3,088) (5,000)
Purchases of other investments - (600)
Refundable deposits placed with a vendor - (15,000)
Refund of deposits placed with a vendor - 111,656
Proceeds from sale of property, plant and
equipment 127 8,659
Proceeds from redemption and maturity of
marketable investments 30,000 -
Return of capital from SMP - 4,133
Others (950) (3,537)
-------------- ------------
Net cash used in investing activities (321,861) (131,196)
-------------- ------------

CASH FLOWS FROM FINANCING ACTIVITIES

Debt
Borrowings 472,124 493,100
Repayments (343,134) (513,548)
Capital lease payments - (2,185)
Receipts of customer deposits 80,000 45,183
Refund of customer deposits (1,634) (42,707)
Issuance of ordinary shares 1,162 1,612
Others - 5,752
-------------- ------------
Net cash provided by (used in) financing
activities 208,518 (12,793)
-------------- ------------

Net increase in cash and cash
equivalents 65,813 118,066
Effect of exchange rate changes on cash
and cash equivalents (352) 20
Cash and cash equivalents at the
beginning of the period 539,399 819,856
-------------- ------------
Cash and cash equivalents at the
end of the period $ 604,860 $ 937,942
============== ============

All currency figures stated in this report are in US dollars.

The financial statement amounts in this report are determined inaccordance with US GAAP.

In order to provide investors additional information regarding theCompany's financial results as determined in accordance with US GAAP,in this report Chartered also provides information on its totalbusiness base revenues, which include the Company's share of SiliconManufacturing Partners ("Revenues including Chartered's share ofSMP"). Silicon Manufacturing Partners (SMP or Fab 5) is aminority-owned joint-venture company and under US GAAP reporting, SMPrevenues are not consolidated into Chartered's revenues ("Revenues").References to revenues including Chartered's share of SMP in thisreport are therefore not in accordance with US GAAP. To ensureclarity, in Appendix A of this report we have included areconciliation table which provides comparable data based on revenuesdetermined in accordance with US GAAP, which do not include theCompany's share of SMP.