Amkor Reports Third Quarter 2009 Results

• Press Release
• Source: Amkor Technology, Inc.
• On 4:07 pm EDT, Tuesday October 27, 2009

CHANDLER, Ariz.--(BUSINESS WIRE)--Amkor Technology, Inc. (NASDAQ: AMKR - News), a leading provider of semiconductor assembly and test services, today reported its financial results for the quarter ended September 30, 2009.

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