CHANDLER, Ariz., November 8, 2006 -- Amkor Technology, Inc. (NASDAQ: AMKR) reported record third quarter 2006 sales of $714 million, up 30% from the third quarter of 2005 and up 4% from the second quarter of 2006. Amkor's third quarter 2006 net income was $53 million, or $0.27 per diluted share, compared with a net loss of $19 million, or ($0.11) per share, in the third quarter of 2005.

"We completed a historic third quarter, marking the first time that Amkor's quarterly sales have exceeded $700 million," said James Kim, Chairman and Chief Executive Officer. "Our strong operating performance reflected continued progress in our strategy to enrich our product mix, enhance operating efficiencies, and generate higher returns on our capital investments."

"We achieved record sales and units in the third quarter, driven by seasonal builds for wireless and other mobile devices, and for high performance applications, including game consoles and networking," said Kim. "We continue to enrich our product mix, focusing on applications that require flip chip, 3D and chip scale packaging, and other advanced products. We also continue to redeploy production assets to support those parts of the business that generate higher returns. Our collaborations with leading silicon providers, technology partners, customers and OEMs are helping us to support existing growth opportunities and are giving Amkor better visibility to develop package solutions for strategic market applications."

"Our third quarter performance reflected strength in our core package and test operations, successful execution of production ramps, continued strong adoption of flip chip and other advanced packaging, and a stable pricing environment," said Ken Joyce, Amkor's Chief Financial Officer. "Third quarter gross margin was 24.9%. During the quarter we commenced operations in our new Singapore wafer bump factory and our new assembly and test factory in Shanghai. Fixed costs associated with these new operations will be absorbed as we build revenue over the next several quarters. "

"Third quarter SG&A expenses included approximately $10 million in professional fees associated with the review of our historical stock options granting practices and related activities, as conducted by the Special Committee of the Board of Directors and assisted by independent counsel," said Joyce. "Excluding these fees, third quarter SG&A expenses would have been slightly lower than in the second quarter of 2006, reflecting continued progress in controlling our core operating expenses. We currently estimate fourth quarter SG&A expenses will include approximately $5 million in professional fees associated with the options review and related activities."

"Capital additions totaled $48 million in the third quarter and $244 million for the first nine months. Our capacity expansion has been focused on strategic growth areas, including wafer bump, wafer level packaging, flip chip and test," said Joyce. "We expect full year 2006 capital additions of approximately $300 million."

"We have achieved positive free cash flow for the past four quarters, and given our current view of business conditions, we anticipate that this trend should continue for the fourth quarter and into 2007," said Joyce.

"Earlier this year we took important steps to address our near-term debt maturities," said Joyce. "Based on current forecasts, we believe we will have sufficient cash resources available to retire the remaining $142 million of 5% convertible notes due March 2007. Looking ahead, we believe we will have sufficient resources to retire both the remaining $88 million in 9.25% senior notes due in 2008 and the remaining $22 million in 10.5% senior subordinated notes due 2009."

For the full year 2006, we anticipate an effective tax rate of 7% which reflects the utilization of U.S. and foreign net operating loss carryforwards and tax holidays in certain of our foreign jurisdictions. At September 30, 2006, Amkor had U.S. net operating losses available for carryforward totaling $350 million expiring through 2025. Additionally, at September 30, 2006, we had $65 million of non-U.S. operating losses available for carryforward, expiring through 2011.

Selected operating data for the third quarter 2006 is included in a section before the financial tables.

Business Outlook

On the basis of our customers' forecasts, we have the following expectations for the fourth quarter of 2006:

  • Sales down 3% to 5% from the third quarter of 2006
  • Gross margin of approximately 24%
  • Net income in the range of $0.20 to $0.24 per diluted share

Amkor will conduct a conference call on November 8, 2006 at 5:00 p.m. eastern time. The call can be accessed by dialing 303-205-0033 or by visiting the investor relations page of our web site: or 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: 11071079.

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:

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: expectations regarding product mix, operating efficiencies and return on capital investments; expectations regarding sufficiency of cash resources to satisfy the notes due 2007, 2008 and 2009; expectations regarding absorption of fixed costs associated with new factories; expectations regarding performance of the factories over the next several quarters; expectations regarding the level of professional fees to be included in fourth quarter SG&A expectations regarding the level and focus of additional capital expenditures and the deployment of production assets; expectations regarding the achievement of positive free cash flow for the fourth quarter and into 2007; expectations regarding the effective tax rate for full year 2006 and the statements regarding sales, gross margin and net income per diluted share 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; 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 high leverage and restrictive covenants; failure to realize sufficient cash flow to fund capital expenditures; deterioration of the U.S. or other economies; 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; 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; 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 Form 10-K/A for the year ended December 31, 2005, and Form 10-Q/A for the quarter ended March 31, 2006, Form 10-Q for the quarter ended June 30, 2006, and current reports on Form 8-K. Amkor undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this document.

Selected operating data for the third quarter and nine month 2006

                                         3rd Quarter     Nine Months

-- Capital additions                     $48 million     $244 million
   Net decrease in related accounts
    payable and deposits                 $34 million       $8 million
                                         -----------     ------------
   Payments for property,
    plant & equipment                    $82 million     $252 million
                                         ===========     ============

-- Depreciation and amortization         $69 million     $203 million
-- Free cash flow (1)                    $59 million     $129 million

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

       Net cash provided by operating
        activities                       $141 million    $381 million
       Less payments for property, plant
        and equipment                    ($82 million)  ($252 million)
                                         -------------  --------------
       Free cash flow from continuing
        operations                        $59 million    $129 million
                                         =============  ==============

We define free cash flow as net cash provided by operating activities less payments for 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 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.

For the Third Quarter of 2006:

  -- Capacity utilization was approximately 81%

  -- Assembly unit shipments were 2.2 billion, up slightly
      from Q2 2006

  -- Our top ten customers accounted for 46% of net sales

  -- End market distribution (an approximation based on a sampling
      of programs with some of our largest customers):

        Communications      40%
        Consumer            31%
        Computing           17%
        Other               12%

  -- As a percentage of net sales:

        Laminate packages   49%
        Leadframe packages  36%
        Other                5%
        Test                10%

                        AMKOR TECHNOLOGY, INC.

                         For the Three Months    For the Nine Months
                                Ended                   Ended
                            September 30,           September 30,
                       ----------------------- -----------------------
                          2006        2005        2006        2005
                                      (As                     (As
                                    restated)               restated)
                       ----------- ----------- ----------- -----------
                            (In thousands, except per share data)

Net sales                $713,829    $549,641  $2,045,549  $1,456,457
Cost of sales             536,062     459,342   1,543,721   1,256,357
                       ----------- ----------- ----------- -----------
Gross profit              177,767      90,299     501,828     200,100
                       ----------- ----------- ----------- -----------

Operating expenses:
   Selling, general
    and administrative     68,477      59,633     187,648     187,057
   Research and
    development             9,653       8,870      29,398      27,694
   Provision for legal
    settlements and
    contingencies               -           -       1,000      50,000
                       ----------- ----------- ----------- -----------
      Total operating
       expenses            78,130      68,503     218,046     264,751
                       ----------- ----------- ----------- -----------
Operating income
 (loss)                    99,637      21,796     283,782     (64,651)
                       ----------- ----------- ----------- -----------
Other (income)
   Interest expense,
    net                    36,573      40,859     118,330     122,767
   Interest expense,
    related party           1,563           -       4,914           -
   Foreign currency
    loss (gain), net        6,465       4,171      11,472       4,630
   Debt retirement
    costs, net                  -           -      27,389           -
   Other (income)
    expense, net             (878)        394       1,497       2,635
                       ----------- ----------- ----------- -----------
      Total other
       expense, net        43,723      45,424     163,602     130,032
                       ----------- ----------- ----------- -----------
Income (loss) before
 income taxes and
 minority interests        55,914     (23,628)    120,180    (194,683)
Income tax expense
 (benefit)                  2,881      (2,865)      8,465        (325)
                       ----------- ----------- ----------- -----------
Income (loss) before
 minority interests        53,033     (20,763)    111,715    (194,358)
Minority interests,
 net of tax                  (223)      1,250        (678)      3,187
                       ----------- ----------- ----------- -----------
Net income (loss)         $52,810    $(19,513)   $111,037   $(191,171)
                       =========== =========== =========== ===========

Net income (loss) per
 common share:
  Basic                     $0.30      $(0.11)      $0.63      $(1.08)
                       =========== =========== =========== ===========
  Diluted                   $0.27      $(0.11)      $0.60      $(1.08)
                       =========== =========== =========== ===========

Shares used in
 computing net income
 (loss) per common
  Basic                   178,108     176,715     177,537     176,271
                       =========== =========== =========== ===========
  Diluted                 204,482     176,715     197,539     176,271
                       =========== =========== =========== ===========
                        AMKOR TECHNOLOGY, INC.

                                           September 30,  December 31,
                                                2006          2005
                                           -------------- ------------
                                                 (In thousands)
Current assets:
  Cash and cash equivalents                     $190,567     $206,575
  Restricted cash                                  2,570            -
  Accounts receivable:
    Trade, net of allowance for doubtful
     accounts of $4,775 and $4,947               425,351      381,495
    Other                                          6,557        5,089
  Inventories, net                               164,404      138,109
  Other current assets                            38,679       35,222
                                           -------------- ------------
          Total current assets                   828,128      766,490

  Property, plant and equipment, net           1,456,553    1,419,472
  Goodwill                                       671,534      653,717
  Intangibles, net                                32,068       38,391
  Investments                                      7,794        9,668
  Restricted cash                                  1,755        1,747
  Other assets                                    49,749       65,606
                                           -------------- ------------
          Total assets                        $3,047,581   $2,955,091
                                           ============== ============

Current liabilities:
  Short-term borrowings and current
   portion of long-term debt                    $200,552     $184,389
  Trade accounts payable                         312,238      326,712
  Accrued expenses                               170,346      124,027
                                           -------------- ------------
          Total current liabilities              683,136      635,128

  Long-term debt                               1,727,200    1,856,247
  Long-term debt, related party                  100,000      100,000
  Pension and severance obligations              155,677      129,752
  Other non-current liabilities                   30,933        6,109
                                           -------------- ------------
          Total liabilities                    2,696,946    2,727,236
                                           -------------- ------------

Commitments and contingencies (see Note
Minority interests                                 4,066        3,950
                                           -------------- ------------

Stockholders' equity:
  Preferred stock, $0.001 par value,
   10,000 shares authorized, designated
   Series A, none issued                               -            -
  Common stock, $0.001 par value, 500,000
   shares authorized, issued and
   outstanding of 178,109 in 2006 and
   176,733 in 2005                                   178          178
  Additional paid-in capital                   1,440,035    1,431,543
  Accumulated deficit                         (1,100,437)  (1,211,474)
  Accumulated other comprehensive income           6,793        3,658
                                           -------------- ------------
         Total stockholders' equity              346,569      223,905
                                           -------------- ------------
         Total liabilities and
          stockholders' equity                $3,047,581   $2,955,091
                                           ============== ============
                        AMKOR TECHNOLOGY, INC.

                                                For the Nine Months
                                                   September 30,
                                                 2006         2005
                                              ------------ -----------
                                                   (in thousands)
Cash flows from operating activities:
  Net income (loss)                              $111,037   $(191,171)
  Depreciation and amortization                   203,065     184,711
  Other non-cash items                             56,889       6,944
  Changes in assets and liabilities excluding
   effects of acquisitions                          9,665      (3,777)
                                              ------------ -----------
   Net cash provided by (used in) operating
    activities                                    380,656      (3,293)
                                              ------------ -----------

Cash flows from investing activities:
 Payments for property, plant and equipment      (252,401)   (226,442)
 Proceeds from the sale of property, plant
  and equipment                                     2,524         530
 Changes in restricted cash                        (2,578)          -
                                              ------------ -----------
    Net cash (used in) investing activities      (252,455)   (225,912)
                                              ------------ -----------

Cash flows provided from financing
 Net change in bank overdrafts                          -        (102)
 Borrowings under the revolving credit
  facility                                        143,659     127,494
 Payments under the revolving credit facility    (134,419)   (116,811)
 Proceeds from issuance of long-term debt         590,000      43,586
 Payment of debt issuance costs                   (15,087)          -
 Payments of long-term debt, including
  redemption discount                            (734,861)    (38,036)
 Proceeds from issuance of stock through
  stock compensation plans                          4,981       2,738
                                              ------------ -----------
    Net cash (used in) provided by financing
     activities                                  (145,727)     18,869

Effect of exchange rate fluctuations on cash
 and cash equivalents                               1,518      (2,430)
                                              ------------ -----------

Net decrease in cash and cash equivalents         (16,008)   (212,766)
Cash and cash equivalents, beginning of
 period                                           206,575     372,284
                                              ------------ -----------
Cash and cash equivalents, end of period         $190,567    $159,518
                                              ============ ===========

Supplemental disclosures of cash flow
 Cash paid during the period for:
  Interest                                       $121,078    $124,825
  Income taxes                                     $6,123       $(501)

 Noncash investing and financing activities:
  Goodwill acquired upon closing of
   acquisition of minority interest               $17,822          $-


Amkor Technology, Inc., Chandler
Jeffrey Luth
VP Corporate Communications
480-821-5000 ext. 5130