Amkor Reports Strong Fourth Quarter 2007 Results

CHANDLER, Ariz.—(BUSINESS WIRE)—February 13, 2008— Amkor Technology, Inc. (NASDAQ: AMKR) today reported its financial results for the fourth quarter and year ended December 31, 2007.

Net sales of $747 million for the fourth quarter of 2007 were up 8.4% from the third quarter of 2007 and up 9.4% from the fourth quarter of 2006. Fourth quarter net income was $94 million, up 54.5% from the third quarter of 2007 and 58.6% from the fourth quarter of 2006. Fourth quarter earnings per diluted share was $0.46, up 53.3% from $0.30 in both the third quarter of 2007 and fourth quarter of 2006.

For the full year 2006 and 2007, Amkor's net sales were $2.7 billion. Amkor's full year 2007 net income of $220 million was up $50 million, or 29.3%, from $170 million for the full year 2006. Full year 2007 earnings per diluted share was $1.11, up 23.3% from $0.90 for the full year 2006.

"We exceeded both our sales and profitability targets in the fourth quarter of 2007 with stronger than expected customer demand primarily for high-end wireless communications, computing and gaming applications," said James Kim, Amkor's chairman and chief executive officer. "Our strong fourth quarter performance demonstrates that our business model is working, as we enrich our product mix, leverage our advanced packaging technologies and maintain a disciplined approach to capital spending."

"We anticipate solid first quarter 2008 sales when compared with historical levels," said Kim. "However, in view of exceptionally strong sales in the fourth quarter of 2007, we expect first quarter 2008 sales to be down 7% to 9% sequentially, which is generally in line with seasonal expectations."

"Net sales for the fourth quarter of 2007 increased $58 million or 8.4% sequentially, while unit shipments increased 4.2% with higher unit volumes across most of our product lines," said Joanne Solomon, Amkor's chief financial officer. "Fourth quarter 2007 sales reflect the increasing importance of our advanced packaging technologies and the benefit of our investments in flip chip and wafer level packaging, 3D packaging and test. For the full year 2007 compared with 2006, unit shipments were down slightly reflecting a shift in our mix from traditional leadframe packages to advanced technologies including flip chip and 3D packaging," said Solomon.

Gross margin in the fourth quarter of 2007 was 27.2%, up from 24.7% in the third quarter of 2007 and 25.3% in the fourth quarter of 2006. The improvement principally reflects the operating leverage of higher revenues and the enriched product mix. Amkor generated $367 million of free cash flow in 2007, an increase of $159 million or 76% from the $208 million of free cash flow generated in 2006.

"Total debt at the end of 2007 was $1.8 billion down $241 million from the prior year. Our cash balance at the end of 2007 was $410 million. We will repay $88 million of 9.25% senior notes at maturity on February 15, 2008 and repay approximately $64 million of maturing debt held by our subsidiaries throughout 2008. Net interest expense for 2007 decreased $31 million from 2006 reflecting the results of ongoing debt reduction efforts and selective refinancing of high cost debt in prior periods," said Solomon.

"Capital additions totaled $101 million in the fourth quarter of 2007 and $294 million for the full year," said Solomon. "Capital additions as a percentage of revenues, or capital intensity, were 10.7% for 2007 compared with 11.0% for 2006. We expect our capital intensity for 2008 to be around 11% to 14% of revenues, of which approximately 70% is expected to be in support of packaging, 20% for test and 10% for infrastructure. For the first quarter of 2008 we expect around $110 million of capital additions which are focused on specific opportunities for our largest customers and ongoing infrastructure investments. We currently expect our capital spending will be weighted more heavily in the first half of 2008 as a result of investments to expand our wafer bumping capacity."

The effective income tax rate for 2007 was 5.4%, and the anticipated effective tax rate for 2008 is approximately 10%. This increase is primarily attributable to the full utilization of foreign net operating loss carry-forwards and tax credit carry-forwards in Taiwan. At December 31, 2007, Amkor had U.S. net operating losses available for carry-forward totaling $364 million, expiring through 2027, and $48 million of non-U.S. operating losses available for carry-forward, expiring through 2012.

Selected operating data for the fourth quarter 2007 is included in a section before the financial tables.

Business Outlook

On the basis of customers' forecasts, we have the following expectations for the first quarter of 2008:

-- Sales - Down 7% to 9% from the fourth quarter of 2007

-- Gross Margin - in the range of 24% to 25%

-- Net income - in the range of $0.25 to $0.29 per diluted share

Amkor will conduct a conference call on February 13, 2008 at 5:00 p.m. eastern time. The call can be accessed by dialing 303-262-2190, or by visiting the investor relations page of our website: or CCBN's website: An archive of the webcast can be accessed through the same links, and will be available until our next quarterly earnings conference call. An audio replay of the call will be available for 48 hours following the conference call by dialing 303-590-3000 passcode: 11105972.

About Amkor

Amkor is a leading provider of semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronics design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's website:

Forward Looking Statement Disclaimer

This press release contains forward-looking statements within the meaning of federal securities laws. All statements other than statements of historical fact are considered forward looking statements including, without limitation, statements regarding the following: our focus on enriching product mix, leveraging our advanced packaging technologies and continuing a disciplined approach to capital spending; our expectations regarding capital intensity and the allocation of capital expenditures among our businesses; the expected dollar amount of our capital additions and the focus of our capital spending; the timing of our capital spending during the year; expectations regarding our effective tax rate for 2008, and the statements regarding sales, gross margin and net income per diluted share contained under Business Outlook. These forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could affect future results and cause actual results and events to differ materially from historical and expected results and those expressed or implied in the forward looking statements, including, but not limited to, the following: the highly unpredictable nature of the semiconductor industry; inability to achieve high capacity utilization rates; volatility of consumer demand for products incorporating our semiconductor packages; weakness in the forecasts of Amkor's customers; customer modification of and follow through with respect to forecasts provided to Amkor; curtailment of outsourcing by our customers; our substantial indebtedness and restrictive covenants; failure to realize sufficient cash flow to fund capital expenditures; deterioration of the U.S. or other economies; the highly unpredictable nature and costs of litigation and other legal activities and the risk of adverse results of such matters; the outcome of the pending SEC investigation; worldwide economic effects of terrorist attacks, natural disasters and military conflict; competitive pricing and declines in average selling prices; timing and volume of orders relative to production capacity; fluctuations in manufacturing yields; competition; dependence on international operations and sales; dependence on raw material and equipment suppliers and changes in raw material costs; exchange rate fluctuations; dependence on key personnel; difficulties in managing growth; enforcement of intellectual property rights; environmental and other governmental regulations; and technological challenges.

Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect our operating results and financial condition are discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2006 and in the company's subsequent filings with the Securities and Exchange Commission made prior to or after the date hereof. Amkor undertakes no obligation to review or update any forward looking statements to reflect events or circumstances occurring after the date of this press release.
                        AMKOR TECHNOLOGY, INC.
                       Selected Financial Data

                                 Q4 2007 Q3 2007 Q4 2006  2007  2006
                                               -------  -------  -------    ----    -----
                                                                                          (in  millions)
Capital  Investment  Data:
Capital  additions                                    $101        $  78        $  55    $  294    $  299
Net  change  in  related  accounts
  payable  and  deposits                              (25)        (20)            9        (58)        17
                                                                  -------  -------  -------  ------  ------
Payments  for  property,  plant  and
  equipment                                                  $  76        $  58        $  64    $  236    $  316
                                                                  =======  =======  =======  ======  ======
Depreciation  and  amortization            $  72        $  70        $  71    $  283    $  274

Free  Cash  Flow  Data:
Net  cash  provided  by  operating
  activities                                                $189        $160        $143    $  603    $  524
Less  payments  for  property,
  plant  and  equipment                                (76)        (58)        (64)    (236)    (316)
                                                                  -------  -------  -------  ------  ------
Free  cash  flow*                                        $113        $102        $  79    $  367    $  208
                                                                  =======  =======  =======  ======  ======
    *We  define  free  cash  flow  as  net  cash  provided  by  operating
      activities  less  payments  for  property,  plant  and  equipment.  Free
      cash  flow  is  not  defined  by  generally  accepted  accounting
      principles.  However,  we  believe  free  cash  flow  to  be  relevant  and
      useful  information  to  our  investors  because  it  provides  them  with
      additional  information  in  assessing  our  liquidity,  capital
      resources  and  financial  operating  results.  Our  management  uses  free
      cash  flow  in  evaluating  our  liquidity,  our  ability  to  service  debt
      and  our  ability  to  fund  capital  expenditures.  However,  this  measure
      should  be  considered  in  addition  to,  and  not  as  a  substitute  for,
      or  superior  to,  cash  flows  or  other  measures  of  financial
      performance  prepared  in  accordance  with  generally  accepted
      accounting  principles,  and  our  definition  of  free  cash  flow  may  not
      be  comparable  to  similarly  titled  measures  reported  by  other

                                                                  Q4  2007  Q3  2007  Q4  2006    2007      2006
                                                                  -------  -------  -------    ----      ----
Sales  Data:
Packaging  services:
    Wirebond  -  leadframe                              31%          33%          34%        33%        37%
    Wirebond  -  laminate                                40%          40%          38%        39%        38%
    Flip  chip  and  wafer  level
      processing                                                18%          16%          17%        17%        15%
                                                                  -------  -------  -------  ------  ------
Packaging  services                                      89%          89%          89%        89%        90%
Test  services                                                11%          11%          11%        11%        10%
                                                                  -------  -------  -------  ------  ------
Total  sales                                                  100%        100%        100%      100%      100%
                                                                  =======  =======  =======  ======  ======

Packaged  units  (in  billions)                2.4          2.3          2.2        8.7        8.8
Net  sales  from  top  ten  customers          49%          48%          46%        47%        44%
Capacity  utilization                                  86%          83%          79%

End  Market  Distribution  Data  (an  approximation  based  on  a  sampling  of
  our  largest  customers):
Communications                                              40%          40%          36%
Consumer                                                          34%          32%          33%
Computing                                                        17%          19%          21%
Other                                                                  9%            9%          10%
                                                                  -------  -------  -------
Total                                                              100%        100%        100%
                                                                  =======  =======  =======

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