IBM and Chartered Extend Manufacturing Arrangement to Include 90nm SOI Semiconductors

EAST FISHKILL, N.Y. and SINGAPORE - January 14, 2004 - IBM and Chartered Semiconductor Manufacturing (Nasdaq: CHRT and SGX-ST: Chartered) today announced an agreement under which Chartered will manufacture selected 90 nanometer (nm) SOI products for IBM in volume-driven, high-performance solutions.

This manufacturing agreement follows the joint development agreements signed by IBM and Chartered in November 2002 and has resulted in a foundry platform solution supported by both companies. Under the initial agreements, the two companies are jointly developing 90nm and 65nm bulk CMOS processes for foundry chip production on 300-millimeter (mm) silicon wafers and are engaged in a reciprocal manufacturing arrangement that provides dual-sourcing flexibility for their customers.

"IBM's 90nm SOI technology is the most advanced in the world and it is increasingly being utilized by a number of our customers across several applications segments," said Dr. John E. Kelly III, senior vice president and group executive, IBM Technology Group. "This manufacturing agreement, with our partner, Chartered, enables IBM to provide the dual sourcing clients want and the flexibility we need to meet increasing demand for our leading-edge technologies."

Chartered is expected to begin production of the 90nm SOI parts in its 300mm Fab 7 in Singapore by mid 2005.

"We are pleased that our relationship with IBM is progressing, offering further opportunities for business collaboration to benefit customers," said Chia Song Hwee, president & CEO at Chartered. "Our shared vision of providing customers a common technology platform and sourcing flexibility is a testament to the critical role we can play together in the electronics supply chain."

About IBM Microelectronics

IBM Microelectronics is a key contributor to IBM's role as the world's premier information technology supplier. It develops, manufactures and markets state-of-the-art semiconductor and interconnect technologies, products and services. Its superior integrated solutions can be found in many of the world's best-known electronic brands. IBM is a recognized innovator in the chip industry, having been first with advances like more power-efficient copper wiring in place of aluminum, and faster silicon-on-insulator (SOI) and silicon germanium transistors. These and other innovations have contributed to IBM's standing as the number one U.S. patent holder for 11 consecutive years. More information about IBM Microelectronics can be found at: http://www.ibm.com/chips.

About Chartered

Chartered Semiconductor Manufacturing, one of the world's top three dedicated semiconductor foundries, is forging a customized approach to outsourced semiconductor manufacturing by building lasting and collaborative partnerships with its customers. The Company provides flexible and cost-effective manufacturing solutions for customers, enabling the convergence of communications, computing and consumer markets. In Singapore, Chartered operates five fabrication facilities and has a sixth fab, which will be developed as a 300mm facility.

A company with both global presence and perspective, Chartered is traded on both the Nasdaq Stock Market (Nasdaq: CHRT) and on the Singapore Exchange (SGX-ST: CHARTERED). Chartered's 3,500 employees are based at 11 locations around the world. Information about Chartered can be found at www.charteredsemi.com.

Chartered Safe Harbor Statement under the provisions of the United States Private Securities Litigation Reform Act of 1995
This news release contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, without limitation, statements relating to our joint development and manufacturing activities with IBM; the development, implementation and availability of new process technologies, including the expected availability and production dates; our plans for Fab 7; the extent of IBM's outsourcing to us; the impact on our manufacturing capabilities and product offerings, reflect our current views with respect to future events, and are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated. Among the factors that could cause actual results to differ materially are: successful implementation of our joint development and manufacturing efforts with IBM; changes in market outlook and trends, specifically in the foundry services and communications and computer segments; the rate of semiconductor market recovery; economic conditions in the United States as well as globally; customer demands; unforeseen delays or interruptions in our plans for our fabrications facilities (including Fab 7); the performance level or and technology mix in our fabrication facilities; the outsourcing strategy of integrated device manufacturers; and competition. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained. In addition to the foregoing factors, a description of certain other risks and uncertainties which could cause actual results to differ materially can be found in the section captioned "Risk Factors" in our Annual Report on Form 20-F and our First Quarter 2003 Quarterly Report on Form 6K filed with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.