CHANDLER, Ariz.--Feb. 8, 2006--Amkor Technology, Inc. (Nasdaq: AMKR) reported record fourth quarter sales of $643 million, up 42% from the fourth quarter of 2004 and up 17% from the third quarter of 2005. Amkor's fourth quarter net income was $54 million, or $0.30 per diluted share, compared with net loss of $36 million, or ($0.21) per share, in the fourth quarter of 2004.

Amkor's fourth quarter 2005 net income included a gain of $4.4 million on the previously announced sale of Amkor Test Services, a specialty test operation; and severance and separation costs of $3.3 million in connection with corporate realignment activities. These items have no tax effect due to our U.S. net operating loss carryforwards and the related valuation allowance. In addition, we recognized an income tax benefit of $9.9 million associated with the release of reserves for domestic and foreign taxes applicable to prior years.

For the full year 2005, Amkor's sales were a record $2.1 billion, up 10% over 2004. For 2005, Amkor's loss was $137 million, or ($.78) per share, and included a provision of $50 million for legal settlements. For 2004, Amkor's net loss was $38 million, or ($.21) per share.

"During 2005 we began to leverage our 2004 strategic initiatives, and we also experienced a broad-based strengthening of customer demand," said James Kim, Amkor's Chairman and Chief Executive Officer. "Our fourth quarter results reflect solid unit growth in strategic product areas, a richer product mix, a firmer pricing environment, and enhanced operating leverage in our newer factories."

"In 2005 we also began to refocus our organization for long-term success," said Kim. "This process is centered on enhancing operational effectiveness and financial performance, and includes alignment of our management team under Oleg Khaykin, COO, and Ken Joyce, CFO, both of whom report directly to me. Our goals are to increase profitability and generate levels of free cash flow that will allow us to reduce our debt."

"During the fourth quarter we successfully increased production in our existing factories as well as our newer operations to support strong demand in several end markets, including wireless communications and consumer electronics," said Kim. "Our leadership in wafer bumping, wafer level processing, flip chip, 3D packaging and other advanced package and test solutions has created what we believe is a strong pipeline of business. We are focused on optimizing our business opportunities, leveraging our strategic alliance with IBM, and laying the groundwork for expansion in Singapore and China."

"We have seen strong customer acceptance of our electroplated wafer bumping technology, including our lead-free bump, as well as wafer probe capability, and we expect to continue to strategically expand these resources," said Kim.

"Fourth quarter revenue and gross margin exceeded guidance due to stronger than expected customer demand; favorable product mix; improved pricing and recovery of increasing material costs; higher capacity utilization; and increasing contribution from our newer factories," said Ken Joyce, Amkor's Chief Financial Officer. "As a result, gross margin rose to 24.2% from 16.4% in the third quarter."

"As we seek to increase profitability, we are undertaking a comprehensive program designed to streamline our corporate-wide support organization and reduce SG&A costs," said Joyce. "Fourth quarter SG&A expenses included a charge of $3.3 million associated with employee reduction and separation expenses, which we expect to yield annualized savings of around $8 million. We intend to continue this process during 2006 with the goal of not only reducing costs, but also improving operational effectiveness."

"We expect that legal fees, which have been a major contributor to increased SG&A expenses during the past two years, should be lower now that the mold compound and Carsem IP litigation are substantially complete," said Joyce.

"Our goal is for 2006 SG&A expenses to be $25 to $30 million lower than in 2005," said Joyce.

"Fourth quarter capital additions totaled $61 million and were focused on test, chip scale packages and flip chip," said Joyce. "For 2006 we are currently budgeting capital additions of $300 million, including $50 million to facilitize our new factories in China and Singapore. In addition, we expect to undertake further capacity expansion that would be funded by customers under long-term supply agreements. We are prepared to adjust this estimate if business conditions change in the second half of the year."

"During the fourth quarter we completed a series of financing initiatives designed to improve our liquidity," said Joyce. "We completed a NT$1.8 billion (approximately $54 million) 5-year secured term loan with a group of Taiwanese lenders, and we replaced our $30 million secured revolving credit facility with a new $100 million senior secured revolver that is available through November 2009. In addition our chairman, James Kim, and members of his family, subscribed to an offering of $100 million of 6.25% convertible subordinated notes due 2013, the proceeds of which were used to repurchase $100 million of 5.75% convertible notes due June 1, 2006."

"We believe that these initiatives, together with improved cash flow from business operations, have enhanced our financial flexibility," said Joyce. "We currently have sufficient resources to retire the remaining '06 convertible notes at maturity and based on current forecasts we believe we will have sufficient liquidity available to satisfy the $146 million of 5% convertible notes due March 2007. As previously announced, during the first quarter of 2006 we purchased in the open market $30 million face value of our outstanding $471 million aggregate principal amount of 9.25% Senior notes due February 2008."

In December 2005, DongbuAnam Semiconductor completed the restructuring of its capitalization. Based on DongbuAnam's market value at December 31, 2005, we recorded an impairment on our equity investment of $736,000 rather than the $4 million we had originally expected.

At December 31, 2005 Amkor had U.S. net operating losses available for carryforward totaling $385 million expiring through 2025. Additionally, at December 31, 2005, we had $80 million of non-U.S. operating losses available for carryforward, expiring through 2011.

Selected operating data for the fourth quarter and full year 2005 is included in a section before the financial tables.

Business Outlook

First quarter revenues are normally down from 5% to 10%, reflecting a shorter work calendar and seasonal adjustments within the supply chain. However, our customers' forecasts suggest a less-than-typical decline in business activity for the first quarter.

On the basis of current customer forecasts, we have the following expectations for the first quarter of 2006:

  • Revenue in the range of 3% to 5% below the fourth quarter of 2005.
  • Gross margin in the range of 21% to 22%.
  • Net income in the range of $0.10 to $0.14 per share.

Amkor will conduct a conference call on February 8, 2006 at 5:00 p.m. eastern time. The call can be accessed by dialing 303-275-2170 or by visiting the investor relations page of our web site: www.amkor.com or CCBN's website, www.companyboardroom.com. 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: 11050206.

About Amkor

Amkor is a leading provider of advanced 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.

Forward Looking Statement Disclaimer

This press release contains forward-looking statements within the meaning of federal securities laws, including, without limitation, statements regarding the following: gross margin attainment goals; existence of a strong pipeline of business; plans to improve operational effectiveness; plans to announce an expansion of wafer bumping and wafer probe capability; plans to reduce legal expenses and SG&A costs; budgeted capital expenditures for 2006; having sufficient resources needed to retire the outstanding convertible notes due June 1, 2006 at maturity and to satisfy the $146 million of 5% convertible notes due March 2007; and the statements contained under Business Outlook. These forward-looking statements are subject to a number of risks and uncertainties that could affect future results and cause actual results and events to differ materially from historical and expected results, including, but not limited to, the following: the highly unpredictable nature of the semiconductor industry; 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; deterioration of the U.S. or other economies; the highly unpredictable nature of litigation and the risk of adverse results of litigation against us; our relationship with IBM; the satisfaction of conditions in the agreements entered into in connection with the IBM transaction; the incurrence of significant additional cost and expense necessary for the increase in Amkor's capacity; the impact on expected SG&A costs of the purported securities class action lawsuit recently filed against us; worldwide economic effects of terrorist attacks and military conflict; competitive pricing and declines in average selling prices; timing and volume of orders relative to the production capacity; fluctuations in manufacturing yields; competition; dependence on international operations and sales; dependence on raw material and equipment suppliers; exchange rate fluctuations; dependence on key personnel; the effect on operations of our realignment of management; difficulties in managing growth; enforcement of intellectual property rights; environmental regulations and technological challenges.

Further information on risk factors that could affect the outcome of the events set forth in these statements and that could affect the company's operating results and financial condition is detailed in the company's filings with the Securities and Exchange Commission, including the Report on Form 10-K/A for the year ended December 31, 2004 and Form 10-Q for the quarter ended September 30, 2005.

(selected operating data and tables to follow)

Selected operating data for the fourth quarter and full year of 2005

                                            4th Quarter    Full Year

--  Capital additions                       $61 million  $293 million

    Net increase in related accounts
     payable                                 $9 million    $3 million
                                             ----------    ----------
    Payments for property, plant &
     equipment                              $70 million  $296 million
                                            ===========  ============

--  Depreciation and amortization           $64 million  $248 million
--  Free cash flow (a)                      $30 million ($199 million)

(a) Reconciliation of free cash flow to the most directly comparable
    GAAP measure:

Net cash provided by operating activities  $100 million   $97 million
Less purchases of property, plant and
 equipment                                 ($70 million)($296 million)
                                            -----------  ------------
Free cash flow from continuing operations   $30 million ($199 million)
                                            ===========  ============

    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 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, 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.

--  Fourth quarter capacity utilization was approximately 90%.  We
    calculate capacity utilization as revenue divided by average
    revenue generating capacity (RGC) for the quarter.  We define RGC
    as 90% of installed capacity (based on the bottleneck limitations
    for each production line), using quarterly average selling price.

--  Assembly unit shipments for Q4 2005 were 2.1 billion, up 5% from
    Q3 2005.

--  Assembly unit shipments for FY 2005 were 7.4 billion, up 4% from
    2004.

--  Q4 2005 end market distribution (an approximation based on a
    sampling of programs with our largest customers):

      Communications                        37%
      Computing                             19%
      Consumer                              34%
      Other                                 10%

--  Q4 2005 percentage of revenue:
      Leadframe packages                    37%
      Laminate packages                     49%
      Other                                  4%
      Test                                  10%

(tables to follow)

                      AMKOR INC. TECHNOLOGY, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except per share data)
                              (unaudited)

                                            For the Three Months Ended
                                                  December 31,
                                            --------------------------
                                               2005            2004
                                            ----------      ----------

Net sales                                   $ 643,492       $ 453,254

Cost of sales                                 487,776         379,812
                                            ----------      ----------

Gross profit                                  155,716          73,442
                                            ----------      ----------

Operating expenses:
  Selling, general and administrative          56,242          56,380
  Research and development                      9,653           9,166
  Gain on sale of specialty test operations    (4,408)            ---
                                            ----------      ----------
    Total operating expenses                   61,487          65,546
                                            ----------      ----------

Operating income                               94,229           7,896
                                            ----------      ----------

Other expense (income):
  Interest expense, related party                 521             ---
  Interest expense, net                        42,584          41,177
  Foreign currency loss                         4,688           1,977
  Other income, net                            (3,024)           (350)
                                            ----------      ----------

    Total other expense                        44,769          42,804
                                            ----------      ----------
Income (loss) before income taxes and
 minority interest                             49,460         (34,908)
Minority interest income (expense)               (685)            717
                                            ----------      ----------
Income (loss) before income taxes              48,775         (34,191)

Provision for income taxes (benefit)           (5,226)          1,901
                                            ----------      ----------
Net income (loss)                           $  54,001       $ (36,092)
                                            ==========      ==========

Net income (loss) per common share:
  Basic                                     $    0.31       $   (0.21)
                                            ==========      ==========
  Diluted                                   $    0.30       $   (0.21)
                                            ==========      ==========

Shares used in computing basic net income
 (loss) per common share:
  Basic                                       176,721         175,718
                                            ==========      ==========
  Diluted                                     181,267         175,718
                                            ==========      ==========
                        AMKOR TECHNOLOGY, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except per share data)
                              (unaudited)

                                          For the Twelve Months Ended
                                                  December 31,
                                          ----------------------------
                                              2005            2004
                                          ------------    ------------

Net sales                                 $ 2,099,949     $ 1,901,279

Cost of sales                               1,743,996       1,533,447
                                          ------------    ------------

Gross profit                                  355,953         367,832
                                          ------------    ------------

Operating expenses:
  Selling, general and administrative         243,155         220,415
  Research and development                     37,347          36,707
  Provision for legal settlement and
   contingencies                               50,000           1,500
  Gain on sale of specialty test
   operations                                  (4,408)            ---
                                          ------------    ------------
    Total operating expenses                  326,094         258,622
                                          ------------    ------------

Operating income                               29,859         109,210
                                          ------------    ------------

Other expense (income):
  Interest expense, related party                 521             ---
  Interest expense, net                       165,351         148,902
  Foreign currency loss                         9,318           6,190
  Other income, net                              (389)        (24,442)
                                          ------------    ------------

    Total other expense                       174,801         130,650
                                          ------------    ------------
Loss before income taxes and minority
 interest                                    (144,942)        (21,440)
Minority interest income (expense)              2,502            (904)
                                          ------------    ------------
Loss before income taxes                     (142,440)        (22,344)

Provision for income taxes (benefit)           (5,551)         15,192
                                          ------------    ------------
Net loss                                  $  (136,889)    $   (37,536)
                                          ============    ============

Net loss per common share:
  Basic                                   $     (0.78)    $    (0.21)
                                          ============    ============
  Diluted                                 $     (0.78)    $    (0.21)
                                          ============    ============

Shares used in computing basic net loss
 per common share:
  Basic                                       176,385         175,342
                                          ============    ============
  Diluted                                     176,385         175,342
                                          ============    ============
                        AMKOR TECHNOLOGY, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)
                              (unaudited)

                                          December 31,    December 31,
                                              2005            2004
                                          ------------    ------------

                                Assets

Current assets:
  Cash and cash equivalents               $   206,575     $   372,284
  Accounts receivable:
    Trade, net of allowance of $4,947 in
     2005 and $5,074 in 2004                  381,495         265,547
    Other                                       5,089           3,948
  Inventories, net                            138,109         111,616
  Other current assets                         35,222          32,591
                                          ------------    ------------
    Total current assets                      766,490         785,986

Property, plant and equipment, net          1,419,472       1,380,396
Goodwill                                      653,717         656,052
Intangibles, net                               38,391          47,302
Investments                                     9,668          13,762
Other assets                                   67,353          81,870
                                          ------------    ------------
    Total assets                          $ 2,955,091     $ 2,965,368
                                          ============    ============

                 Liabilities and Stockholders' Equity

Current liabilities:
  Short-term borrowings and current
   portion of long-term debt              $   184,389     $    52,147
  Trade accounts payable                      326,712         211,808
  Accrued expenses                            123,631         175,075
                                          ------------    ------------
    Total current liabilities                 634,732         439,030

Long-term debt, related party                 100,000             ---
Long-term debt                              1,856,247       2,040,813
Other non-current liabilities                 135,861         109,317
                                          ------------    ------------
    Total liabilities                       2,726,840       2,589,160
                                          ------------    ------------

Minority interest                               3,950           6,679
                                          ------------    ------------

Stockholders' equity:
  Common stock                                    178             176
  Additional paid-in capital                1,326,426       1,323,579
  Accumulated deficit                      (1,105,961)       (969,072)
  Accumulated other comprehensive income        3,658          14,846
                                          ------------    ------------
    Total stockholders' equity                224,301         369,529
                                          ------------    ------------
    Total liabilities and stockholders'
     equity                               $ 2,955,091     $ 2,965,368
                                          ============    ============
                        AMKOR TECHNOLOGY, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands)
                              (unaudited)

                                            For the Three Months Ended
                                                  December 31,
                                            --------------------------
                                               2005            2004
                                            ----------      ----------

Cash flows from operating activities:
  Net income (loss)                         $  54,001       $ (36,092)
  Depreciation and amortization                63,611          61,180
  Gain on sale of specialty test services      (4,408)            ---
  Other non-cash items                         17,203           6,962
  Changes in assets and liabilities
   excluding effects of sales and
   acquisitions                               (30,002)        (45,518)
                                            ----------      ----------
    Net cash provided by (used in)
     operating activities                     100,405         (13,468)
                                            ----------      ----------

Cash flows from investing activities:
  Payments for property, plant and equipment  (69,501)         (1,511)
  Proceeds from sale of specialty test
   services                                     6,587             ---
  Advances for acquisition of minority
   interest                                   (19,250)            ---
  Other investing activities                    1,066             511
                                            ----------      ----------
    Net cash used in investing activities     (81,098)         (1,000)
                                            ----------      ----------

Cash flows provided by financing activities    28,814         153,660
                                            ----------      ----------

Effect of exchange rate fluctuations on cash
 and cash equivalents                          (1,064)          1,781
                                            ----------      ----------

Net increase in cash and cash equivalents      47,057         140,973

Cash and cash equivalents, beginning of
 period                                       159,518         231,311
                                            ----------      ----------

Cash and cash equivalents, end of period    $ 206,575       $ 372,284
                                            ==========      ==========

Supplemental disclosures of cash flow
 information:
  Cash paid during the period for:
    Interest                                $  43,739       $  40,747
    Income taxes                            $   2,386       $   1,686

  Noncash investing and financing activities:
    Note receivable from sale of specialty
     test services                          $     890       $     ---
                        AMKOR TECHNOLOGY, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands)
                              (unaudited)

                                          For the Twelve Months Ended
                                                  December 31,
                                          ----------------------------
                                              2005            2004
                                          ------------    ------------
Cash flows from operating activities:
  Net loss                                $  (136,889)    $   (37,536)
  Depreciation and amortization               248,322         230,344
  Gain on sale of specialty test services      (4,408)            ---
  Other non-cash items                         49,412             764
  Changes in assets and liabilities
   excluding effects of sales and
   acquisitions                               (59,325)         25,167
                                          ------------    ------------
    Net cash provided by operating
     activities                                97,112         218,739
                                          ------------    ------------

Cash flows from investing activities:
  Payments for property, plant and
   equipment                                 (295,943)       (407,740)
  Proceeds from sale of specialty test
   services                                     6,587             ---
  Advances for acquisition of minority
   interest                                   (19,250)            ---
  Other investing activities                    1,596          12,032
                                          ------------    ------------
    Net cash used in investing activities    (307,010)       (395,708)
                                          ------------    ------------

Cash flows provided by financing
 activities                                    47,683         235,175
                                          ------------    ------------

Effect of exchange rate fluctuations on
 cash and cash equivalents                     (3,494)            819
                                          ------------    ------------

Net (decrease) increase in cash and cash
 equivalents                                 (165,709)         59,025

Cash and cash equivalents, beginning of
 period                                       372,284         313,259
                                          ------------    ------------
Cash and cash equivalents, end of period  $   206,575     $   372,284
                                          ============    ============

Supplemental disclosures of cash flow
 information:
  Cash paid during the period for:
    Interest                              $   168,564     $   136,957
    Income taxes                          $     1,885     $    23,800

  Noncash investing and financing
   activities:
    Note receivable from sale of specialty
     test services                        $       890     $       ---


Contact:
     Amkor Technology, Inc., Chandler
     Jeffrey Luth
     VP Corporate Communications
     480-821-5000 ext. 5130
     jluth@amkor.com