CHANDLER, Ariz., Jan. 5 -- Amkor Technology, Inc. (Nasdaq: AMKR) today completed the acquisition of its semiconductor assembly and test joint venture with Toshiba by purchasing Toshiba's 40% interest in Amkor Iwate Co. Ltd. for around $14 million. The buyout is being executed according to the schedule agreed by Amkor and Toshiba when the original deal was signed three years ago. The $14 million includes a payment of $2 million to terminate a commitment to purchase a tract of land adjacent to the Amkor Iwate facility.
Amkor's J1 factory, located near Kitakami, in Iwate Prefecture, Japan, has become Japan's leading source for contract semiconductor assembly and test services, supporting not only Toshiba, but more than a dozen other Japanese semiconductor companies. The factory, which has been expanded since commencement of the joint venture, now employs more than 800 people and produces over 200 package formats. During the past three years, Amkor has upgraded the factory's manufacturing capacity and installed assembly technology necessary to produce a broad range of advanced packaging solutions, including stacked-die and very thin chip scale packages, that are widely used in cell phones and other high-end consumer electronics.
"When the joint venture was first announced three years ago, we called it a landmark agreement that would bring a new dimension of contract assembly and test services to Japan - and that is exactly what has happened," said John Boruch, Amkor's president and chief operating officer. "This innovative collaboration has proven to be very successful for both Toshiba and Amkor, even during the most severe downturn in semiconductor industry history. Based on the win-win nature of this partnership, Toshiba has become Amkor's largest customer, and Amkor has made great strides penetrating the Japanese market for IC assembly and test."
"During the past three years, Amkor Iwate Co. has achieved great success in lowering our cost of assembly and test, in direct support of Toshiba's corporate goals," said Shigeo Koguchi, President and CEO of Toshiba Corporation's Semiconductor Company. "As we look ahead to the semiconductor industry recovery and the next phase of Toshiba's growth, we expect Amkor to play an important role supporting Toshiba's leadership position in high technology electronics."
Japan is among the world's largest markets for semiconductor assembly and test, with Japanese IC companies spending an estimated $6 billion or more per year on assembly and test. Historically, nearly all of this has been performed by either the semiconductor company or related parties. Fueled by the success of its Iwate factory, Amkor business with Japanese IC companies has grown dramatically. During 2003 Amkor expects its Japan-related business to exceed 6% of the available market.
"The high visibility created by our successful collaboration with Toshiba, coupled with our Tokyo-based design, engineering and support teams, has enabled Amkor to develop close relationships with an increasing number of Japanese IC companies," said Jim Fusaro, senior vice president and general manager of Amkor Japan. "We believe the extraordinary growth Amkor has achieved over the past few years still represents the early stage of what should be broad-based outsourcing trend in Japan."
Amkor Technology, Inc. is a leading provider of contract semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronic design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's web site: www.amkor.com .
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, including Amkor's role as a supplier to Toshiba, the prospects regarding Amkor's market share in Japan and business trends in Japan. These forward-looking statements represent expectations and beliefs that are subject to a number of risks and uncertainties, and actual results may differ materially. These risks and uncertainties include, without limitation, the following: the level at which Toshiba uses Amkor as a supplier; the highly unpredictable nature of the semiconductor industry in Japan and elsewhere; and volatility of consumer demand for products incorporating our semiconductor packages in Japan. Further information on 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 is detailed in our filings with the Securities and Exchange Commission, including our Report on Form 10-K for the fiscal year ended December 31, 2002 and our Report on Form 10-Q for the fiscal quarter ended September, 2003.
For further information, please contact: Jeffrey Luth, VP Corporate Communications of Amkor Technology, +1-480-821-5000 Ext. 5130, firstname.lastname@example.org