CHANDLER, Ariz., May 4 -- Amkor Technology, Inc. (Nasdaq: AMKR) reported first quarter 2005 sales of $418 million, down 8% sequentially and down 10% from the first quarter of 2004. Amkor's first quarter net loss was $119 million, or ($0.68) per share, and included a provision for legal settlements, with no tax benefit, of $50 million, or ($0.28) per share. For the first quarter of 2004, Amkor's net income was $11 million, or $0.06 per share, and included charges, with no tax benefit, of $2.7 million, or ($0.02) per share, in connection with the prepayment of Amkor's term loan under its senior secured credit facility, and a provision for legal settlement of $1.5 million, or ($0.01) per share.

"Our first quarter operating results reflect a bottoming out of the current semiconductor industry correction and the impact of higher factory costs and operating expenses associated with the capacity expansion and growth initiatives we put in place last year," said James Kim, Amkor's chairman and chief executive officer. "These initiatives, which include our collaboration with IBM and acquisition of Unitive, have created a strong pipeline of new business opportunities. Our goal is to execute successfully on these opportunities and achieve above-industry revenue growth in 2005 and 2006."

"We are encouraged with the way business developed over the first quarter of 2005," said John Boruch, Amkor's president and chief operating officer. "Rising customer forecasts signify to us that the semiconductor industry inventory correction has generally run its course. We have gained major business wins for graphics and gaming applications requiring wafer bump, flip chip assembly, and associated probe and test, and also for CDMA related packaging and test. Our wafer level packaging is ramping to meet Q2 requirements, and the business outlook for Stacked CSP, System-in-package, MicroLeadFrame®, Chip Scale BGA, Memory Cards, and Test is looking strong. We are focused on executing on our business opportunities."

"We are also seeing the results of an increased focus on customer satisfaction, and I'm pleased to note that since mid-2004 we have received recognition awards from a broad range of customers, including Altera, Atheros, Conexant, Infineon, Intel, Qualcomm, QuickLogic, Silicon Labs, Texas Instruments and Volterra," said Boruch. "The transfer of IBM's outsourced assembly and test business is moving forward under our supply agreement."

"First quarter gross margin of 10.4% was at the lower end of our guidance, reflecting the combined impact of an increased fixed cost structure attributable to our 2004 capacity expansion and growth initiatives, seasonally lower revenues, and greater than expected erosion of average selling prices for our products," said Ken Joyce, Amkor's chief financial officer.

"First quarter SG&A expenses included $4 million in legal costs, principally in connection with the mold compound litigation and our patent infringement lawsuit against Carsem," said Joyce. "As previously disclosed, in April 2005 we reached settlements, totaling $45 million, of two cases in the mold compound litigation. We will continue to incur legal expenses as we defend the two remaining cases related to the mold compound litigation and have accrued an additional $5 million loss contingency in connection with these remaining mold compound cases."

First quarter capital expenditures totaled $47 million. "We are investing primarily in key growth areas, such as wafer bumping, flip chip assembly, probe and final test, which are associated with the strategic initiatives we put in place in 2004, and which have translated into major program wins that should drive revenue in the second half of 2005 and into 2006," said Joyce. "We are currently budgeting second quarter capital expenditures of $145 million."

"In our Form 10-K filing, we said that 2005 capital expenditures could reach $300 million and would depend on the performance of our business, the need for additional capacity to service anticipated customer demand and the availability of suitable financing."

Selected operating data for the first quarter of 2005 is included in a separate section of this release before the financial tables.

Business outlook

Our customer forecasts are rising for a broad range of existing package products and also for turnkey flip chip programs that have resulted from our Unitive acquisition and IBM collaboration. We anticipate a stronger-than-normal revenue increase for the second quarter; however profitability will be constrained by the combined effects of continued pricing pressure and a significant ramp in capital and factory resources being deployed to support Q3 and Q4 business expectations. On the basis of current forecasts, we have the following expectations for the second quarter of 2005:

     *  Sequential revenue increase in the range of 10% to 13%.
     *  Gross margin in the range of 12% to 14%.
     *  Net loss in the range of 28 cents to 32 cents per diluted share.

We anticipate recognizing approximately $2 million per quarter in foreign tax expense during 2005. At March 31, 2005 our company had U.S. net operating loss carryforwards totaling $330 million expiring through 2025. Additionally, at March 31, 2005 we had $66 million of non-U.S. net operating loss carryforwards expiring through 2010.

Amkor will conduct a conference call on May 4, 2005 at 5:00 p.m. eastern time to discuss the results of the first quarter in more detail. The call can be accessed by dialing 303-205-0066 or by visiting the investor relations page of our web site: or Thompson 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: 11029599.

Amkor 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:

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: the pending industry recovery; the ramp of our wafer level packaging business; the business outlook for Stacked CSP, System-in-package, MicroLeadFrame®, Chip Scale BGA, Memory Cards, and Test; planned expansion wafer bumping, probe, assembly and final test; the transfer of IBM's outsourced assembly and test business; ongoing legal expenses; Amkor's financial performance, including expected revenue, gross margin, and net loss; expected asset utilization, competitive pricing actions, and absorption of costs associated with recent acquisitions; Amkor's positioning for the long term; budgeted capital expenditure; 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; 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; 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; the risk of adverse results of litigation against us; dependence on international operations and sales; dependence on raw material and equipment suppliers; exchange rate fluctuations; dependence on key personnel; 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 for the year ended December 31, 2004.

     Jeffrey Luth
     VP Corporate Communications
     480-821-5000 ext. 5130

     Selected operating data for the first quarter of 2005

     *  Capital expenditures                             $47 million
        Net change in related accounts payable           $20 million
        Purchases of property, plant & equipment         $67 million

     *  Depreciation and amortization                    $61 million

     *  Free cash flow *                                ($73 million)
     *  Reconciliation of free cash flow to the most directly comparable GAAP

        Net cash used in operating activities           ($6 million)
        Purchases of property, plant & equipment        ($67 million)
        Free cash flow                                  ($73 million)

        We define free cash flow as net cash (used in) provided by operating
        activities less purchases of property, plant and equipment.  Free cash
        flow is not defined by generally accepted accounting principles, and
        our definition of free cash flow may not be comparable to similar

     *  Capacity utilization, calculated as quarterly revenue divided by
        revenue generating capacity (RGC) at quarter-end, was approximately
        69%.  We define RGC as 90% utilization of installed capacity (based on
        the limiting equipment set on each production line), using quarterly
        average selling price.

     *  Assembly unit shipments were 1.54 billion, down 1% from Q4 2004.

     *  Percentage of revenue:

           Leadframe packages        42%
           Laminate packages         44%
           Other                      4%
           Test                      10%

                            AMKOR TECHNOLOGY, INC.
                    (in thousands, except per share data)

                                                  For the Three Months Ended
                                                           March 31,
                                                      2005           2004

    Net sales                                       $417,481       $464,646
    Cost of sales                                    374,086        352,798
      Gross profit                                    43,395        111,848
    Operating expenses:
      Selling, general and administrative             58,492         52,178
      Research and development                         8,900          8,977
      Amortization of intangibles                      1,974          1,328
      Provision for legal settlements                 50,000          1,500
        Total operating expenses                     119,366         63,983
    Operating income (loss)                          (75,971)        47,865
    Other expense (income):
      Interest expense, net                           40,513         33,290
      Foreign currency exchange loss                   2,232             75
      Other expense (income), net                        178           (923)
      Debt retirement expense (1)                         --          2,720
        Total other expense (income)                  42,923         35,162
    Income (loss) before income taxes
    and minority interest                           (118,894)        12,703
    Minority interest                                  1,011           (358)
    Income (loss) before income taxes               (117,883)        12,345
    Provision for income taxes                         1,187          1,435
    Net income (loss)                              $(119,070)       $10,910

    Per Share Data:
      Basic and diluted net income (loss)
       per common share                               $(0.68)         $0.06

      Shares used in computing basic net income
       (loss) per common share                       175,718        174,622

      Shares used in computing diluted net income
       (loss) per common share                       175,718        180,202

     (1) Debt retirement costs include the
           Call premium                                  $--         $1,687
           Unamortized deferred debt acquisition
            costs                                         --          1,033
                                                         $--         $2,720

                              AMKOR TECHNOLOGY, INC.
                                  (in thousands)
                                                   March 31,    December 31,
                                                      2005          2004
    Current assets:
      Cash and cash equivalents                     $286,760       $372,284
      Accounts receivable:
        Trade, net of allowance of $5,115 in
         2005 and $5,074 in 2004                     265,137        265,547
        Other                                          5,912          3,948
      Inventories, net                               111,638        111,616
      Other current assets                            33,348         32,591
          Total current assets                       702,795        785,986

    Property, plant and equipment, net             1,372,149      1,380,396
    Goodwill                                         655,858        656,052
    Intangibles, net                                  44,918         47,302
    Investments                                       11,646         13,762
    Other assets                                      78,971         81,870
          Total assets                            $2,866,337     $2,965,368

           Liabilities and Stockholders' Equity
    Current liabilities:
      Bank overdraft                                     $--           $102
      Short-term borrowings and current portion
       of long-term debt                              42,245         52,147
      Trade accounts payable                         201,577        211,706
      Accrued expenses                               209,666        175,075
          Total current liabilities                  453,488        439,030

    Long-term debt                                 2,042,411      2,040,813
    Other non-current liabilities                    117,663        109,317
          Total liabilities                        2,613,562      2,589,160

    Minority interest                                  5,807          6,679

    Stockholders' equity:
      Common stock                                       176            176
      Additional paid-in capital                   1,323,579      1,323,579
      Accumulated deficit                         (1,088,142)      (969,072)
      Accumulated other comprehensive income          11,355         14,846
          Total stockholders' equity                 246,968        369,529
          Total liabilities and stockholders'
           equity                                 $2,866,337     $2,965,368

                              AMKOR TECHNOLOGY, INC.
                                  (in thousands)

                                                 For the Three Months Ended
                                                          March 31,
                                                      2005           2004

    Cash flows from operating activities:
      Net income (loss)                            $(119,070)       $10,910
      Depreciation and amortization                   60,858         52,397
      Other non-cash items                             1,382          5,262
      Changes in assets and liabilities
       excluding effects of acquisitions (1)          51,173         16,215
        Net cash (used in) provided by
         operating activities                         (5,657)        84,784

    Cash flows from investing activities:
      Purchases of property, plant and
       equipment (1)                                 (67,497)      (131,297)
      Other investing activities                         156          6,454
        Net cash used in investing activities        (67,341)      (124,843)

    Cash flows (used in) provided by
     financing activities                            (11,816)        71,752

    Effect of exchange rate fluctuations
     on cash and cash equivalents                       (710)           544

    Net change in cash and cash equivalents          (85,524)        32,237
    Cash and cash equivalents, beginning
     of period                                       372,284        313,259
    Cash and cash equivalents, end of period        $286,760       $345,496

    Supplemental disclosures of cash flow
      Cash paid during the period for:
        Interest                                     $40,170        $27,519
        Income taxes                                  $2,733        $11,781

     Prior to March 31, 2005, the Company did not exclude from capital
     expenditures reported in the statement of cash flows, capital
     expenditures that were unpaid and included in accounts payable at each
     balance sheet date.  Thus capital expenditures were reported in the cash
     flow statement on an accrual basis rather than on a cash basis.  This
     presentation caused an over/understatement of cash flows from investing
     activities with an equal over/understatement of cash flows from operating
     activities.  For the three months ended March 31, 2004, the non cash
     amount of capital expenditures was an estimated $39.5 million.  The
     Company has corrected the amounts within the accompanying condensed
     consolidated cash flow statement for the three months ended March 31,
     2004, to reduce net cash provided by operating activities and net cash
     used in investing activities by $39.5 million, compared with the amounts
     previously reported.  The Company is currently evaluating the impact of
     the inclusion of these non cash amounts in the cash flow statement on its
     previously reported financial statements as well as management's
     assessment of the effectiveness of internal control over financial
     reporting.  The ultimate resolution of this matter will not impact the
     Company's previously reported balance sheets; statements of operations
     including its net income (loss), earnings (loss) per share; stockholders'
     equity; or its disclosure of free cash flow.