Amkor Technology (AMKR) 8-K Amkor Technology Reports Financial Results for the Third Quarter 2010

Exhibit 99.1

News Release

Amkor Technology Reports Financial Results for the Third Quarter 2010

• Net sales $794 million

• Gross margin 24%

• Net income $78 million

• Earnings per diluted share $0.30

CHANDLER, Ariz. — November 4, 2010 —Amkor Technology, Inc. (NASDAQ: AMKR), a leading provider of semiconductor assembly and test services, today announced financial results for the third quarter ended September 30, 2010, with net sales of $794 million, net income of $78 million, and earnings per diluted share of $0.30.

“Amkor set a new record for sales in the third quarter reflecting solid growth across all of our end markets, with notable strength in the consumer and communications areas,” said Ken Joyce, Amkor’s president and chief executive officer. “Gross margin was lower than expectations primarily due to an unanticipated shift in product mix to packages with higher material content. The lower gross margin, together with a foreign currency loss and increased income tax expense, led to lower than anticipated earnings in the quarter.”

     Select financial information for the third quarter 2010 is as follows:

• Net Sales: $794 million, up 6% from $749 million in the prior quarter, and up 29% from $616 million in the third quarter of 2009

• Gross Margin: 24%, compared to 24% in the prior quarter and 25% in the third quarter of 2009

• Net Income: $78 million, up from $59 million in the prior quarter, and down from $81 million in the third quarter of 2009

• Earnings Per Diluted Share: $0.30, up from $0.23 in the prior quarter, and down from $0.31 in the third quarter of 2009

Net sales grew 6% in the third quarter, with ball grid array packages delivering the strongest performance. Unit shipments grew 5%, to 2.9 billion units, principally driven by leadframe packaging services.

“High demand for ball grid array packages in support of gaming and TVs, which have higher material content, contributed to lower than expected gross margin. Gross margin was also compressed by lower than anticipated utilization of some of our leadframe and chip scale capacity as some of our customers in the consumer electronics area adjusted their demand.” said Joanne Solomon, Amkor’s executive vice president and chief financial officer.

“In addition, our earnings were reduced by an $8 million foreign currency loss, or $0.03 per diluted share, primarily attributable to the appreciation of the Korean won and the resulting revaluation of Amkor’s Korean employee benefit plan liability. Income taxes were $5 million higher than expected, or $0.02 per diluted share, primarily due to higher than anticipated profits in Taiwan,” added Solomon.

“Capital additions were $171 million during the third quarter, primarily in support of the communications area,” continued Solomon.

Cash and cash equivalents were $417 million, and total debt was $1.4 billion, at September 30, 2010.

Selected operating data for the third quarter 2010 is included in a section before the financial tables.

Business Outlook

“As we look ahead to the fourth quarter, demand in the communications market continues to be solid,” said Joyce. “At the same time, we see seasonal softness in demand for gaming and lower demand forecasts by some of our customers in the consumer electronics and networking areas.”

Based upon the currently available information, we have the following expectations for the fourth quarter of 2010:

• Net sales of $715 million to $754 million, down 5% to down 10% from the prior quarter

• Gross margin between 22% and 24%

• Net income of $60 million to $81 million, or $0.23 to $0.31 per diluted share

• Capital additions of approximately $75 million for the fourth quarter, and $480 million for the full year, or a full year capital intensity of approximately 16% of net sales

Conference Call Information

Amkor will conduct a conference call on November 4, 2010, at 5:00 p.m. Eastern Daylight Time. This call is being webcast and can be accessed at Amkor’s web site: www.amkor.com. You may also access the call by dialing 877-941-1468. A replay of the call will be made available at Amkor’s web site or by dialing 800-406-7325 (access pass code #4376952). The webcast is also being distributed over Thomson Reuters’ Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through Thomson Reuters’ individual investor center at www.companyboardroom.com or by visiting any of the investor sites in Thomson Reuters’ Individual Investor Network. Institutional investors can access the call via Thomson Reuters’ password-protected event management site, Street Events (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, the statements made regarding our current business outlook for the fourth quarter of 2010, including demand in the communications market, demand for gaming, consumer electronics, and networking, our expected net sales, gross margin, net income, capital additions and capital intensity. 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;

• dependence on key customers;

• weakness in the forecasts of our customers;

• customer modification of and follow through with respect to forecasts provided to us;

• 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 or other downturn in the U.S. and other economies worldwide;

• disruptions or deficiencies in our controls resulting from the implementation of our new enterprise resource planning system;

• 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 control 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 and precious metal 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, 2009 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.

Contact:

Amkor Technology, Inc., Chandler
Joanne Solomon
Executive Vice President & Chief Financial Officer
480-786-7878
joanne.solomon@amkor.com

AMKOR TECHNOLOGY, INC.
Selected Operating Data

Sales Data:	Q3 2010			Q2 2010			Q3 2009
Packaging services (in millions):
Chip scale package	$	244		$	234		$	206
Ball grid array		212			194			129
Leadframe		204			202			172
Other packaging		52			48			42
Packaging services		712			678			549
Test services		82			71			67
Total sales	$	794		$	749		$	616
Packaging services:
Chip scale package		31	%		31	%		33	%
Ball grid array		27	%		26	%		21	%
Leadframe		26	%		27	%		28	%
Other packaging		6	%		6	%		7	%
Packaging services		90	%		90	%		89	%
Test services		10	%		10	%		11	%
Total sales		100	%		100	%		100	%
Packaged units (in millions):
Chip scale package		618			580			481
Ball grid array		72			61			57
Leadframe		2,185			2,093			1,802
Other packaging		8			7			7
Total packaged units		2,883			2,741			2,347
Net sales from top ten customers		55	%		55	%		54	%
Capacity utilization		87	%		87	%		82	%

End Market Distribution Data(an approximation including representative devices and applications based on a sampling of our largest customers. Prior periods were revised for an expanded sampling methodology and refinement of our classifications):

Communications (cell phones, Ethernet, WiMAX, wireless LAN, Bluetooth)	34	%	34	%	40	%
Consumer (gaming, set top boxes, TV, portable media)	30	%	30	%	28	%
Computing (PCs, servers, displays, hard disk drive, printers, other peripherals)	14	%	14	%	13	%
Networking (infrastructure, routers, network servers)	13	%	13	%	12	%
Other (auto, industrial)	9	%	9	%	7	%
Total	100	%	100	%	100	%

AMKOR TECHNOLOGY, INC.
Selected Operating Data (continued)

	Q3 2010				Q2 2010			Q3 2009
Gross Margin Data:
Net sales		100	%			100	%		100	%
Cost of sales:
Materials		43	%			42	%		39	%
Labor		12	%			13	%		13	%
Other manufacturing		21	%			21	%		23	%
Gross margin		24	%	��		24	%		25	%
Packaging services gross margin		22	%			24	%		25	%
Test services gross margin		36	%			27	%		28	%
Earnings per Share Data:	(in millions, except per share data)
Net income attributable to Amkor — basic	$	78			$	59		$	81
Adjustment for dilutive securities on net income :
Interest on 2.5% convertible notes due 2011, net of tax		—				—			—
Interest on 6.25% convertible notes due 2013, net of tax		2				2			2
Interest on 6.0% convertible notes due 2014, net of tax		4				4			4
Net income attributable to Amkor — diluted	$	84			$	65		$	87
Weighted average shares outstanding — basic		183				183			183
Effect of dilutive securities:
Stock options and unvested restricted shares		—				1			—
2.5% convertible notes due 2011		3				3			3
6.25% convertible notes due 2013		13				13			13
6.0% convertible notes due 2014		83				83			83
Weighted average shares outstanding — diluted		282				283			282
Net income attributable to Amkor per common share:
Basic	$	0.42			$	0.32		$	0.44
Diluted	$	0.30			$	0.23		$	0.31
Capital Investment Data:
Property, plant and equipment additions	$	171			$	158		$	78
Net change in related accounts payable and deposits		(37	)			(82	)		(36	)
Purchases of property, plant and equipment	$	134			$	76		$	42
Depreciation and amortization	$	83			$	78		$	74
Free Cash Flow Data:
Net cash provided by operating activities	$	176			$	87		$	123
Less purchases of property, plant and equipment		(134	)			(76	)		(42	)
Free cash flow*	$	42			$	11		$	81

^* 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 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 additions. However, this measure should be considered in addition to, and not as a substitute for, 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.

AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2010			2009			2010			2009
	(In thousands, except per share data)
Net sales	$	793,971		$	616,205		$	2,188,874		$	1,511,497
Cost of sales		605,713			461,589			1,684,461			1,206,455
Gross profit		188,258			154,616			504,413			305,042
Operating expenses:
Selling, general and administrative		57,735			53,619			180,387			156,132
Research and development		12,669			13,364			36,437			33,546
Gain on sale of real estate		—			(146	)		—			(146	)
Total operating expenses		70,404			66,837			216,824			189,532
Operating income		117,854			87,779			287,589			115,510
Other (income) expense:
Interest expense		19,614			24,946			66,393			78,961
Interest expense, related party		3,812			3,813			11,437			9,187
Interest income		(695	)		(481	)		(2,275	)		(1,525	)
Foreign currency loss		8,456			8,259			9,010			2,161
Loss (gain) on debt retirement, net		235			1,226			18,042			(15,658	)
Equity in earnings of unconsolidated affiliate		(2,174	)		—			(4,883	)		—
Other income, net		(85	)		(126	)		(475	)		(77	)
Total other expense, net		29,163			37,637			97,249			73,049
Income before income taxes		88,691			50,142			190,340			42,461
Income tax expense (benefit)		10,321			(30,854	)		8,954			(25,940	)
Net income		78,370			80,996			181,386			68,401
Net income attributable to noncontrolling interests		(350	)		(133	)		(19	)		(407	)
Net income attributable to Amkor	$	78,020		$	80,863		$	181,367		$	67,994
Net income attributable to Amkor per common share:
Basic	$	0.42		$	0.44		$	0.99		$	0.37
Diluted	$	0.30		$	0.31		$	0.70		$	0.32
Shares used in computing per common share amounts:
Basic		183,340			183,060			183,280			183,048
Diluted		282,495			282,356			282,523			238,568

AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	September 30,			December 31,
	2010			2009
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	417,498		$	395,406
Restricted cash		2,679			2,679
Accounts receivable:
Trade, net of allowances		450,146			328,252
Other		17,630			18,666
Inventories		203,873			155,185
Other current assets		44,239			32,737
Total current assets		1,136,065			932,925
Property, plant and equipment, net		1,533,439			1,364,630
Intangibles, net		15,360			9,975
Investments		26,019			19,108
Restricted cash		12,997			6,795
Other assets		98,024			99,476
Total assets	$	2,821,904		$	2,432,909
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	144,885		$	88,944
Trade accounts payable		540,907			361,263
Accrued expenses		215,604			155,630
Total current liabilities		901,396			605,837
Long-term debt		985,137			1,095,241
Long-term debt, related party		250,000			250,000
Pension and severance obligations		97,858			83,067
Other non-current liabilities		6,510			9,063
Total liabilities		2,240,901			2,043,208
Equity:
Amkor stockholders’ equity:
Preferred stock		—			—
Common stock, $0.001 par value, 500,000 shares authorized, issued and outstanding of 183,436 in 2010 and 183,171 in 2009		183			183
Additional paid-in capital		1,503,968			1,500,246
Accumulated deficit		(940,874	)		(1,122,241	)
Accumulated other comprehensive income		11,489			5,021
Treasury stock, at cost, 45 shares in 2010		(274	)		—
Total Amkor stockholders’ equity		574,492			383,209
Noncontrolling interests in subsidiaries		6,511			6,492
Total equity		581,003			389,701
Total liabilities and equity	$	2,821,904		$	2,432,909

AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Nine Months Ended
	September 30,
	2010			2009
	(In thousands)
Cash flows from operating activities:
Net income	$	181,386		$	68,401
Depreciation and amortization		237,225			230,887
Loss (gain) on debt retirement, net		10,562			(15,658	)
Other operating activities and non-cash items		(707	)		(12,080	)
Changes in assets and liabilities		(61,504	)		(114,740	)
Net cash provided by operating activities		366,962			156,810
Cash flows from investing activities:
Purchases of property, plant and equipment		(276,672	)		(111,929	)
Proceeds from the sale of property, plant and equipment		2,399			1,570
Financing lease payment from unconsolidated affiliate		10,087			—
Other investing activities		(10,781	)		(8,573	)
Net cash used in investing activities		(274,967	)		(118,932	)
Cash flows from financing activities:
Borrowings under revolving credit facilities		3,261			—
Payments under revolving credit facilities		(34,253	)		—
Proceeds from issuance of short-term working capital facility		15,000			15,000
Payments of short-term working capital facility		(15,000	)		—
Proceeds from issuance of long-term debt		611,007			100,000
Proceeds from issuance of long-term debt, related party		—			150,000
Payments of long-term debt, net of redemption premiums and discounts		(643,793	)		(272,214	)
Payments for debt issuance costs		(7,737	)		(8,479	)
Proceeds from issuance of stock through share-based compensation plans		881			348
Net cash used in financing activities		(70,634	)		(15,345	)
Effect of exchange rate fluctuations on cash and cash equivalents		731			(133	)
Net increase in cash and cash equivalents		22,092			22,400
Cash and cash equivalents, beginning of period		395,406			424,316
Cash and cash equivalents, end of period	$	417,498		$	446,716