Amkor Reports Third Quarter 2009 Results

Third quarter net sales of $616 million were up 22% sequentially from the second quarter of 2009 and down 14% from the third quarter of 2008. Third quarter net income was $81 million or $0.31 per diluted share, compared to $9 million or $0.05 per diluted share in the second quarter.

Net income for the third quarter of 2009 includes income tax benefits of $34 million or $0.12 per diluted share primarily from the release of a tax valuation allowance at our subsidiary in Korea. Net income for the third quarter of 2008 was $29 million, or $0.15 per diluted share. Net income for the third quarter of 2008 included a charge of $52 million or $0.25 per diluted share, relating to the resolution of a patent license dispute.

"We performed well in the third quarter, delivering strong results," said Ken Joyce, chief executive officer of Amkor. "Net sales increased 22%, reflecting higher than typical seasonal growth, primarily driven by demand for communications and consumer applications. We achieved gross margin of 25% for the quarter, up sequentially from 20% in the second quarter of 2009, as we benefited from higher levels of capacity utilization and our earlier cost reduction efforts. As the global economy continues to improve, we are prudently investing in expanding capacity for our advanced interconnect technologies in close alignment with customer product roadmaps."

"Looking ahead to the fourth quarter, we expect net sales to be flat, plus or minus 2%, from the third quarter of 2009 and gross margin of 23% to 25% based on current forecasts from our customers," added Joyce.

"We generated $81 million in free cash flow in the third quarter and ended the quarter with a cash balance of $447 million and total debt of just under $1.5 billion," said Joanne Solomon, Amkor's chief financial officer. "During the third quarter, we repurchased $25 million of our 7.125% senior notes due 2011 and $49 million of our 7.75% senior notes due 2013. We have an aggregate of $86 million of debt coming due through the end of 2010, and the remaining $119 million of our 7.125% notes and 2.5% convertible notes mature in 2011."

"Third quarter 2009 capital additions were $78 million. We expect capital additions for the fourth quarter to be approximately $70 million and approximately $200 million for the full year 2009 with full year capital intensity of approximately 9%. Our third quarter 2009 and planned capital additions are primarily related to expanding our capacity in response to increased levels of customer demand," said Solomon.

Selected operating data for the third quarter of 2009 is included in a section before the financial tables.

Business Outlook

Based upon the latest available information, we have the following expectations for the fourth quarter of 2009:

-- Net sales flat, plus or minus 2%, from the third quarter of 2009

-- Gross margin between 23% and 25%

-- Net income -- in the range of $0.17 to $0.23 per diluted share

Conference Call Information

Amkor will conduct a conference call on October 27, 2009 at 5:00 p.m. eastern time. This call is being webcast and can be accessed at Amkor's web site at www.amkor.com. You may also access the call by dialing 888-561-1799. A replay of the call will be made available at Amkor's web site or by dialing 800-406-7325 (access passcode # 4169497). The webcast is also being distributed over Thomson Financial's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through Thomson Financial individual investor center at www.companyboardroom.com or by visiting any of the investor sites in Thomson Financial's Individual Investor Network. Institutional investors can access the call via Thomson Financial's password-protected event management site, StreetEvents (www.streetevents.com).

About Amkor

Amkor is a leading provider of semiconductor assembly and test services to semiconductor companies and electronics OEMs. More information on Amkor is available from the company's SEC filings and on Amkor's website: www.amkor.com.

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: expectations regarding net sales and gross margin in the fourth quarter of 2009; the expected dollar amount and focus of our capital additions and the expected level of capital intensity; and the statements made under Business Outlook including those regarding net sales, gross margin and net income. 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;

-- the effect of the global economy on credit markets, financial institutions, customers, suppliers and consumers;

-- 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 additions;

-- the effects of a recession in the U.S. and other economies worldwide;

-- the highly unpredictable nature and costs of litigation and other legal activities and the risk of adverse results of such matters;

-- worldwide economic effects of terrorist attacks, natural disasters and military conflict;

-- our ability to reduce costs;

-- 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, 2008 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 Operating Data
Sales Data:                                              Q3 2009          Q2 2009          Q3 2008
Packaging services:
Wirebond - leadframe                                         28    %          25    %          29    %
Wirebond - laminate                                          44    %          43    %          40    %
Flip chip and wafer level processing                         17    %          20    %          20    %
Packaging services                                           89    %          88    %          89    %
Test services                                                11    %          12    %          11    %
Total sales                                                  100   %          100   %          100   %
Packaged units (in millions):
Wirebond - leadframe                                         1,802            1,229            1,957
Wirebond - laminate                                          419              330              390
Flip chip and wafer level processing                         126              134              157
Total packaged units                                         2,347            1,693            2,504
Net sales from top ten customers                             54    %          54    %          49    %
Capacity utilization                                         82    %          66    %          86    %
End Market Distribution Data (an approximation based on a
sampling of our largest customers):
Communications                                               50    %          49    %          42    %
Consumer                                                     30    %          30    %          33    %
Computing                                                    13    %          14    %          15    %
Other                                                        7     %          7     %          10    %
Total                                                        100   %          100   %          100   %
Earnings per Share Data:                                 Q3 2009          Q2 2009          Q3 2008
                                                         (in millions, except per share data)
Net income attributable to Amkor - basic                 $   81           $   9            $   29
Adjustment for dilutive securities on net income:
Interest on 2.5% convertible notes due 2011, net of tax      -                -                1
Interest on 6.25% convertible notes due 2013, net of tax     2                -                2
Interest on 6.0% convertible notes due 2014, net of tax      4                4                -
Net income attributable to Amkor - diluted               $   87           $   13           $   32
Weighted average shares outstanding - basic                  183              183              183
Effect of dilutive securities:
Stock options                                                -                -                1
2.5% convertible notes due 2011                              3                -                13
6.25% convertible notes due 2013                             13               -                13
6.0% convertible notes due 2014                              83               83               -
Weighted average shares outstanding - diluted                282              266              210
Net income attributable to Amkor per common share:
Basic                                                    $   0.44         $   0.05         $   0.16
Diluted                                                  $   0.31         $   0.05         $   0.15
                                                         Q3 2009          Q2 2009          Q3 2008
                                                         (in millions)
Capital Investment Data:
Property, plant and equipment additions                  $   78           $   27           $   92
Net change in related accounts payable and deposits          (36   )          -                34
Purchases of property, plant and equipment               $   42           $   27           $   126
Depreciation and amortization                            $   74           $   77           $   79
Free Cash Flow Data:
Net cash provided by operating activities        $   123        $   96         $   173
Less purchases of property, plant and equipment      (42 )          (27 )          (126 )
Free cash flow*                                  $   81         $   69         $   47
*We define free cash flow as net cash provided by operating
activities less purchases of 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 additions. 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 companies.

AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                     For the Three Months           For the Nine Months
                                                     Ended September 30,            Ended September 30,
                                                     2009           2008            2009             2008
                                                     (In thousands, except per share data)
Net sales                                            $  616,205     $  719,731      $  1,511,497     $  2,109,890
Cost of sales                                           461,589        590,700         1,206,455        1,645,776
Gross profit                                            154,616        129,031         305,042          464,114
Operating expenses:
Selling, general and administrative                     53,619         60,467          156,132          193,357
Research and development                                13,364         14,084          33,546           43,035
Gain on sale of real estate                             (146    )      -               (146      )      (9,856    )
Total operating expenses                                66,837         74,551          189,532          226,536
Operating income                                        87,779         54,480          115,510          237,578
Other (income) expense:
Interest expense, net                                   24,465         30,119          77,436           83,866
Interest expense, related party                         3,813          1,562           9,187            4,687
Foreign currency loss (gain)                            8,259          (23,026 )       2,161            (44,100   )
Loss (gain) on debt retirement, net                     1,226          -               (15,658   )      -
Other income, net                                       (126    )      (256    )       (77       )      (955      )
Total other expense, net                                37,637         8,399           73,049           43,498
Income before income taxes                              50,142         46,081          42,461           194,080
Income tax (benefit) expense                            (30,854 )      16,313          (25,940   )      26,551
Net income                                              80,996         29,768          68,401           167,529
Net income attributable to noncontrolling interests     133            613             407              1,146
Net income attributable to Amkor                     $  80,863      $  29,155       $  67,994        $  166,383
Net income attributable to Amkor per common share:
Basic                                                $  0.44        $  0.16         $  0.37          $  0.91
Diluted                                              $  0.31        $  0.15         $  0.32          $  0.84
Shares used in computing per common share amounts:
Basic                                                   183,060        183,001         183,048          182,633
Diluted                                                 282,356        209,989         238,568          209,848

AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                                   September 30,          December 31,
                                                                   2009                   2008
                                                                   (In thousands)
ASSETS
Current assets:
Cash and cash equivalents                                          $    446,716           $    424,316
Restricted cash                                                         2,679                  4,880
Accounts receivable:
Trade, net of allowances                                                341,677                259,630
Other                                                                   5,171                  14,183
Inventories                                                             142,264                134,045
Other current assets                                                    42,316                 23,862
Total current assets                                                    980,823                860,916
Property, plant and equipment, net                                      1,372,578              1,473,763
Intangibles, net                                                        11,650                 11,546
Restricted cash                                                         6,317                  1,696
Other assets                                                            58,141                 36,072
Total assets                                                       $    2,429,509         $    2,383,993
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt        $    69,834            $    54,609
Trade accounts payable                                                  324,981                241,684
Accrued expenses                                                        220,349                258,449
Total current liabilities                                               615,164                554,742
Long-term debt                                                          1,149,300              1,338,751
Long-term debt, related party                                           250,000                100,000
Pension and severance obligations                                       94,812                 116,789
Other non-current liabilities                                           9,813                  30,548
Total liabilities                                                       2,119,089              2,140,830
Equity:
Amkor stockholders' equity:
Preferred stock                                                         -                      -
Common stock, $0.001 par value, 500,000 shares authorized, issued
and outstanding of 183,102 in 2009 and 183,035 in 2008
                                                                        183                    183
Additional paid-in capital                                              1,499,299              1,496,976
Accumulated deficit                                                     (1,210,227 )           (1,278,221 )
Accumulated other comprehensive income                                  14,606                 18,201
Total Amkor stockholders' equity                                        303,861                237,139
Noncontrolling interests in subsidiaries                                6,559                  6,024
Total equity                                                            310,420                243,163
Total liabilities and equity                                       $    2,429,509         $    2,383,993

AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                                   For the Nine Months Ended
                                                                   September 30,
                                                                   2009              2008
                                                                   (In thousands)
Cash flows from operating activities:
Net income                                                         $     68,401      $     167,529
Depreciation and amortization                                            230,887           229,501
Gain on debt retirement, net                                             (15,658  )        -
Other operating activities and non-cash items                            (12,080  )        20,947
Changes in assets and liabilities                                        (114,740 )        39,414
Net cash provided by operating activities                                156,810           457,391
Cash flows from investing activities:
Purchases of property, plant and equipment                               (111,929 )        (317,109 )
Proceeds from the sale of property, plant and equipment                  1,570             15,257
Proceeds from sale of investment                                         -                 2,460
Other investing activities                                               (8,573   )        (702     )
Net cash used in investing activities                                    (118,932 )        (300,094 )
Cash flows from financing activities:
Borrowings under revolving credit facilities                             -                 619
Payments under revolving credit facilities                               -                 (633     )
Proceeds from issuance of short-term debt                                15,000            -
Proceeds from issuance of long-term debt                                 100,000           -
Proceeds from issuance of related party debt                             150,000           -
Payments of long-term debt                                               (272,214 )        (135,913 )
Payments for debt issuance costs                                         (8,479   )        -
Proceeds from issuance of stock through stock compensation plans         348               10,201
Net cash used in financing activities                                    (15,345  )        (125,726 )
Effect of exchange rate fluctuations on cash and cash equivalents        (133     )        2,197
Net increase in cash and cash equivalents                                22,400            33,768
Cash and cash equivalents, beginning of period                           424,316           410,070
Cash and cash equivalents, end of period                           $     446,716     $     443,838

SOURCE: Amkor Technology, Inc.

Amkor Technology, Inc., Chandler 
Joanne Solomon 
Corporate Vice President & CFO 
480-821-5000 ext. 5416 
joanne.solomon@amkor.com