Advanced Semiconductor Engineering, Inc.’s (ASE) common stock price has appreciated significantly since our 4Q 08 and FY 2008 update report reflecting broader index movements during the period and an improved business outlook for the company. On 06 May 2009 the company announced an 11.3% m-o-m increase (-27.1% y-o-y) in April 2009 total net revenues with the expectation that it will report a more than 40% q-o-q increase in total net revenues in 2Q 09, primarily due to strengthening of the Chinese market. In view of this and a better-than-expected margin performance in 1Q 09, we expect to revise upwards our net revenue and margin estimates in our next update report. Accordingly, we maintain our HOLD rating for ASE, although the common stock target price does not support a HOLD rating at current price levels. We will reassess the common stock rating and target price for ASE in our next update report. We maintain our SELL rating for the ADR (1 ADR = 5 common shares), in line with our fundamental outlook and anticipated negative currency impact on the ADR over our 6-12 month investment horizon. We will reassess our target price and rating in our next update report.

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