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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 000-29472

AMKOR TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 23-1722724
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)

1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

SECURITIES REGISTERED PURSUANT TO SECTION
12(b) OF THE ACT: NONE SECURITIES
REGISTERED PURSUANT TO SECTION 12(g) OF
THE ACT:
COMMON STOCK, $0.001 PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days. Yes [ X ] No [ ]

The number of outstanding shares of the registrant's Common Stock
as of August 7, 2001 was 161,368,048.
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PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------------ ----------------------------------
2001 2000 2001 2000
---------------- -------------- ---------------- ---------------
(UNAUDITED) (UNAUDITED)

Net revenues.......................................... $ 350,169 $ 547,036 $ 830,792 $ 1,101,847
Cost of revenues -- including purchases from ASI...... 342,158 407,441 740,996 847,221
---------------- --------------- ---------------- ---------------
Gross profit.......................................... 8,011 139,595 89,796 254,626
---------------- --------------- ---------------- ---------------
Operating expenses:
Selling, general and administrative............. 51,365 46,884 105,359 88,781
Research and development........................ 8,135 4,872 18,637 8,243
Amortization of goodwill and acquired
intangibles................................... 20,573 15,440 42,485 21,802
---------------- --------------- ---------------- ---------------
Total operating expenses................... 80,073 67,196 166,481 118,826
---------------- --------------- ---------------- ---------------
Operating income (loss)............................... (72,062) 72,399 (76,685) 135,800
---------------- --------------- ---------------- ---------------
Other expense (income):
Interest expense, net........................... 40,411 29,428 85,206 44,857
Foreign currency loss (gain).................... 2,375 1,756 1,065 2,592
Other expense (income), net..................... (57) (322) 111 2,038
---------------- --------------- ---------------- ---------------
Total other expense........................ 42,729 30,862 86,382 49,487
---------------- --------------- ---------------- ---------------
Income (loss) before income taxes, equity in loss
of investees and minority interest.............. (114,791) 41,537 (163,067) 86,313
Provision (benefit) for income taxes.................. (25,673) 6,230 (30,983) 15,186
Equity in loss of investees........................... (26,345) (4,371) (52,593) (3,035)
Minority interest..................................... (828) -- (828) --
---------------- --------------- ---------------- ---------------
Net income (loss)..................................... $ (116,291) $ 30,936 $ (185,505) $ 68,092
================ =============== ================ ===============
Per Share Data:
Basic net income (loss) per common share........ $ (0.76) $ 0.21 $ (1.21) $ 0.49
=============== =============== =============== ===============
Diluted net income (loss) per common share...... $ (0.76) $ 0.20 $ (1.21) $ 0.47
=============== =============== =============== ===============
Shares used in computing basic net income
(loss) per common share....................... 153,950 148,530 153,068 139,701
================ =============== ================ ===============
Shares used in computing diluted net income
(loss) per common share....................... 153,950 157,617 153,068 148,078
================ =============== ================ ===============

The accompanying notes are an integral part of these statements.

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AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

JUNE 30, DECEMBER 31,
2001 2000
---------------- ---------------
(UNAUDITED)
ASSETS

Current assets:
Cash and cash equivalents..................................................... $ 339,135 $ 93,517
Accounts receivable:
Trade, net of allowance for doubtful accounts of $1,838 and $2,426....... 229,192 301,915
Due from affiliates...................................................... 2,504 1,634
Other.................................................................... 7,898 6,465
Inventories................................................................... 83,801 108,613
Other current assets.......................................................... 46,437 36,873
---------------- ---------------
Total current assets................................................ 708,967 549,017
---------------- ---------------
Property, plant and equipment, net.................................................. 1,453,275 1,478,510
---------------- ---------------
Investments......................................................................... 448,822 501,254
---------------- ---------------
Other assets:
Due from affiliates........................................................... 22,143 25,013
Goodwill and acquired intangibles, net........................................ 717,475 737,593
Other......................................................................... 106,080 101,897
---------------- ---------------
845,698 864,503
---------------- ---------------
Total assets........................................................ $ 3,456,762 $ 3,393,284
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft................................................................ $ 13,784 $ 25,731
Current portion of long-term debt............................................. 30,272 73,586
Trade accounts payable........................................................ 142,375 133,047
Due to affiliates............................................................. 8,829 32,534
Accrued expenses.............................................................. 123,606 129,301
Accrued income taxes.......................................................... 16,621 52,232
---------------- ---------------
Total current liabilities........................................... 335,487 446,431
Long-term debt .................................................................... 1,876,219 1,585,536
Other noncurrent liabilities........................................................ 58,246 46,483
---------------- ---------------
Total liabilities................................................... 2,269,952 2,078,450
---------------- ---------------
Commitments and contingencies
Minority interest................................................................... 2,406 --
---------------- ---------------
Stockholders' equity:
Preferred stock............................................................... -- --
Common stock.................................................................. 156 152
Additional paid-in capital.................................................... 1,030,857 975,026
Retained earnings............................................................. 158,381 343,886
Receivable from stockholder................................................... (3,276) (3,276)
Accumulated other comprehensive loss.......................................... (1,714) (954)
---------------- ---------------
Total stockholders' equity.......................................... 1,184,404 1,314,834
---------------- ---------------
Total liabilities and stockholders' equity.......................... $ 3,456,762 $ 3,393,284
================ ===============

The accompanying notes are an integral part of these statements.

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AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(IN THOUSANDS)

ADDITIONAL RECEIVABLE
COMMON STOCK PAID-IN RETAINED FROM
SHARES AMOUNT CAPITAL EARNINGS STOCKHOLDER
------------------------------------------------------------

Balance at December 31, 1999.................................. 130,660 $ 131 $ 551,964 $ 189,733 $ (3,276)
Net income................................................. -- -- -- 68,092 --
Unrealized losses on investments,
net of tax.............................................. -- -- -- -- --

Comprehensive income.......................................

Issuance of 20.5 million common stock shares
and 3.9 million common stock warrants................... 20,500 21 409,979 -- --
Issuance of stock through employee
stock purchase plan and stock options................... 382 -- 4,684 -- --
Debt conversion............................................ 248 -- 3,460 -- --
--------- ---------- --------- --------- ----------
Balance at June 30, 2000...................................... 151,790 $ 152 $ 970,087 $ 257,825 $ (3,276)
========= ========== ========= ========= ==========

Balance at December 31, 2000.................................. 152,118 $ 152 $ 975,026 $ 343,886 $ (3,276)
Net income (loss).......................................... -- -- -- (185,505) --
Unrealized gains on investments,
net of tax.............................................. -- -- -- -- --
Cumulative translation adjustment.......................... -- -- -- -- --

Comprehensive loss.........................................

Issuance of stock through employee
stock purchase plan and stock options................... 533 1 6,869 -- --
Debt conversion............................................ 3,716 3 48,962 -- --
--------- ---------- --------- --------- ----------
Balance at June 30, 2001...................................... 156,367 $ 156 $1,030,857 $ 158,381 $ (3,276)
========= ========== ========== ========= ==========

ACCUMULATED
OTHER
COMPREHENSIVE COMPREHENSIVE
LOSS TOTAL INCOME
----------------------------------------

Balance at December 31, 1999.................................................... $ (811) $ 737,741
Net income................................................................... -- 68,092 $ 68,092
Unrealized losses on investments,
net of tax................................................................ (17) (17) (17)
-----------
Comprehensive income......................................................... $ 68,075
===========
Issuance of 20.5 million common stock shares
and 3.9 million common stock warrants..................................... -- 410,000
Issuance of stock through employee
stock purchase plan and stock options..................................... -- 4,684
Debt conversion.............................................................. -- 3,460
---------- ----------
Balance at June 30, 2000........................................................ $ (828) $1,223,960
========== ==========

Balance at December 31, 2000.................................................... $ (954) $1,314,834
Net income (loss)............................................................ -- (185,505) $ (185,505)
Unrealized gains on investments,
net of tax................................................................ -- -- --
Cumulative translation adjustment............................................ (760) (760) (760)
-----------
Comprehensive loss........................................................... $ (186,265)
===========
Issuance of stock through employee
stock purchase plan and stock options..................................... -- 6,870
Debt conversion.............................................................. -- 48,965
---------- ----------
Balance at June 30, 2001........................................................ $ (1,714) $1,184,404
========== ==========

The accompanying notes are an integral part of these statements.

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AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

FOR THE SIX MONTHS ENDED
2001 2000
---------------- ---------------
(UNAUDITED)

Cash flows from operating activities:

Net income (loss)........................................................................ $ (185,505) $ 68,092
Adjustments to reconcile net income to net cash provided
by operating activities --
Depreciation and amortization......................................................... 216,586 130,629
Deferred debt issuance costs.......................................................... 14,124 2,626
Debt conversion expense............................................................... -- 272
Provision for accounts receivable..................................................... (588) --
Provision for excess and obsolete inventory........................................... 11,628 3,500
Deferred income taxes................................................................. (155) 1,935
Equity in (income) loss of investees.................................................. 52,593 3,035
Loss on sale of fixed assets and investments.......................................... 1,522 1,012
Minority interest..................................................................... 828 --
Changes in assets and liabilities excluding effects of acquisitions --
Accounts receivable................................................................... 73,369 (38,218)
Repurchase of accounts receivable under securitization agreement...................... -- (71,500)
Other receivables..................................................................... (1,433) 2,363
Inventories........................................................................... 24,014 (2,585)
Due to/from affiliates, net........................................................... (21,705) 3,947
Other current assets.................................................................. (6,054) (13,129)
Other noncurrent assets............................................................... 2,875 (10,372)
Accounts payable...................................................................... 9,300 62,089
Accrued expenses...................................................................... (25,302) 8,353
Accrued income taxes.................................................................. (35,611) 3,658
Other long-term liabilities........................................................... 3,722 3,473
---------------- ---------------
Net cash provided by operating activities........................................... 134,208 159,180
---------------- ---------------
Cash flows from investing activities:
Purchases of property, plant and equipment............................................... (112,664) (288,837)
Acquisition of Amkor Iwate............................................................... (7,338) --
Acquisition of K1, K2 and K3, net of cash acquired....................................... -- (924,548)
Investment in ASI........................................................................ -- (339,000)
Cash held in escrow to fund ASI investment commitment.................................... -- (120,000)
Acquisition of Integra Technologies, LLC................................................. -- (7,580)
Proceeds from the sale of property, plant and equipment.................................. 793 --
Proceeds from the sale (purchase) of investments......................................... (161) 136,988
---------------- ---------------
Net cash used in investing activities............................................... (119,370) (1,542,977)
---------------- ---------------
Cash flows from financing activities:
Net change in bank overdrafts and short-term borrowings.................................. 764 8,574
Net proceeds from issuance of long-term debt............................................. 750,995 1,029,154
Payments of long-term debt............................................................... (527,440) (30,386)
Net proceeds from the issuance of 20.5 million common shares in a private equity
offering.............................................................................. -- 410,000
Proceeds from issuance of stock through employee stock
purchase plan and stock options....................................................... 6,870 4,684
---------------- ---------------
Net cash provided by financing activities................................................... 231,189 1,422,026
---------------- ---------------
Effect of exchange rate fluctuations on cash and cash equivalents........................... (409) --
---------------- ---------------
Net increase (decrease) in cash and cash equivalents........................................ 245,618 38,229
Cash and cash equivalents, beginning of period.............................................. 93,517 98,045
---------------- ---------------
Cash and cash equivalents, end of period.................................................... $ 339,135 $ 136,274
================ ===============
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest.............................................................................. $ 68,899 $ 41,531
Income taxes.......................................................................... $ (158) $ 8,255

The accompanying notes are an integral part of these statements.

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AMKOR TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. INTERIM FINANCIAL STATEMENTS

The consolidated financial statements and related disclosures as of June
30, 2001 and for the three and six months ended June 30, 2001 and 2000 are
unaudited, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In our opinion, these financial statements include all adjustments
(consisting only of normal recurring adjustments) necessary for the fair
presentation of the results for the interim periods. These financial statements
should be read in conjunction with our latest annual report as of December 31,
2000 filed on Form 10-K with the Securities and Exchange Commission. The results
of operations for the three and six months ended June 30, 2001 are not
necessarily indicative of the results to be expected for the full year.

Certain previously reported amounts have been reclassified to conform with
the current presentation.

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 141, "Business Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 addresses
financial accounting and reporting for business combinations and supercedes APB
Opinion No. 16, "Business Combinations." SFAS No. 141 requires the purchase
method of accounting be used for all business combinations initiated after June
30, 2001, and establishes specific criteria for the recognition of intangible
assets separately from goodwill. These provisions are effective for business
combinations for which the date of acquisition is subsequent to June 30, 2001.
SFAS No. 142 addresses the accounting for goodwill and intangible assets
subsequent to their acquisition and eliminates the requirement to amortize
goodwill and long-lived assets with indefinite lives. SFAS No. 142 requires an
annual impairment test be performed to evaluate the carrying value of such
assets. The provisions for SFAS No. 142 will be effective for fiscal years
beginning after December 15, 2001. We are currently evaluating the impact these
pronouncements will have on our financial position or results of operations.

2. RISKS AND UNCERTAINTIES

Our future results of operations involve a number of risks and
uncertainties. Factors that could affect future operating results and cause
actual results to vary materially from historical results include, but are not
limited to, dependence on the highly cyclical nature of the semiconductor
industry, uncertainty as to the demand from our customers over both the long-and
short-term, competitive pricing and declines in average selling prices we
experience, our dependence on our relationship with Anam Semiconductor, Inc.
(ASI) for all of our wafer fabrication output, the timing and volume of orders
relative to our production capacity, the absence of significant backlog in our
business, availability of manufacturing capacity and fluctuations in
manufacturing yields, the availability of financing, our high leverage and the
restrictive covenants contained in the agreements governing our indebtedness,
our competition, our dependence on international operations and sales, our
dependence on raw material and equipment suppliers, exchange rate fluctuations,
our dependence on key personnel, our difficulties managing our growth, the
enforcement of intellectual property rights by or against us, our need to comply
with existing and future environmental regulations and the results of ASI as it
impacts our financial results.

3. ACQUISITIONS

In January 2001, Amkor Iwate Corporation commenced operations with the
acquisition of a packaging and test facility at a Toshiba factory located in the
Iwate prefecture in Japan. Amkor Iwate provides packaging and test services to
Toshiba's Iwate factory under a long-term supply agreement. We currently own 60%
of Amkor Iwate and Toshiba owns the balance of the outstanding shares. By
January 2004 we are required to purchase the remaining 40% of the outstanding
shares of Amkor Iwate from Toshiba. The share purchase price will be determined
based on the performance of the joint venture during the three-year period but
cannot be less than 1 billion Japanese yen and cannot exceed 4 billion Japanese
yen. The results of Amkor Iwate have been included in the accompanying
consolidated financial statements since the date of acquisition. Goodwill and
acquired intangibles as of the acquisition date, based on preliminary estimates
of fair value, were $21.9 million and are being amortized on a straight-line
basis over 5 to 10 years. Acquired intangibles include the value of acquired
technology and of a workforce-in-place. We do not expect that the final purchase
price allocation will differ significantly from the preliminary purchase price
allocation.

On May 1, 2000 we completed our purchase of ASI's three remaining
packaging and test factories, known as K1, K2 and K3, for a purchase price of
$950.0 million. In addition we made a commitment to make a $459.0 million equity
investment in ASI. Pursuant to that commitment we made an equity investment in
ASI of $309.0 million on May 1, 2000. We fulfilled the remaining equity
investment

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commitment of $150.0 million in three installments of which $30.0 million was
invested on June 30, 2000, and $60.0 million was invested on each of August 30,
2000 and October 27, 2000. We financed the acquisition and investment with the
proceeds of a $258.8 million convertible subordinated notes offering, a $410.0
million private equity financing, $750.0 million of secured bank debt and
approximately $103 million from cash on hand. As of June 30, 2001, we invested a
total of $500.6 million in ASI and owned 42% of the outstanding voting stock. We
report ASI's results in our financial statements through the equity method of
accounting.

The amount by which the cost of our investment exceeds our share of the
underlying assets of ASI as of the date of our investment is being amortized on
a straight-line basis over a five-year period. The amortization is included in
our consolidated statement of income within equity in income of investees. As of
June 30, 2001, the unamortized excess of the cost of our equity investment in
ASI above our share of the underlying net assets is $136.4 million.

The acquisition of K1, K2 and K3 was accounted for as a purchase.
Accordingly, the results of K1, K2 and K3 have been included in the accompanying
consolidated financial statements since the date of acquisition. Goodwill and
acquired intangibles as of the acquisition date were $555.8 million and are
being amortized on a straight-line basis over a 10 year period. Acquired
intangibles include the value of acquired patent rights and of a
workforce-in-place. The fair value of the assets acquired and liabilities
assumed was approximately $394 million for fixed assets, $9 million for
inventory and other assets, and $9 million for assumed liabilities.

Pro Forma Financial Information for Amkor

The pro forma information below assumes that the May 2000 acquisition of
K1, K2 and K3 occurred at the beginning of 2000. The pro forma adjustments
include a provision for amortization of goodwill and other identified
intangibles, an adjustment of depreciation expense based on the fair market
value of the acquired assets, interest expense on debt issued to finance the
acquisitions and income taxes related to the pro forma adjustments. The pro
forma results are not necessarily indicative of the results we would actually
have achieved if the acquisition had been completed as of the beginning of 2000,
nor are they necessarily indicative of future consolidated results.

FOR THE SIX MONTHS ENDED
June 30,
-------------------------------------
ACTUAL PRO FORMA
2001 2000
---------------- ---------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Net revenues.................................................................. $ 830,792 $ 1,112,068
Income before income taxes and equity in income
(loss) of investees........................................................ (163,067) 104,788
Net income (loss)............................................................. (185,505) 86,457
Earnings per share:
Basic net income (loss) per common share................................... (1.21) 0.57
Diluted net income (loss) per common share.................................... (1.21) 0.55

The pro forma adjustments exclude the effects of our investments in ASI.
Had we included pro forma adjustments for the six months ended June 30, 2000
related to our investments in ASI, pro forma net income would have been $83.0
million and pro forma earnings per share on a diluted basis would have been
$0.52.

Financial Information for ASI

The following summary consolidated financial information was derived from
the consolidated financial statements of ASI. ASI's results of operation for the
six months ended June 30, 2000, reflected their packaging and test operations as
discontinued operations. Net income for the six months ended June 30, 2000
includes a $436.8 million gain on sale of K1, K2 and K3, which was eliminated
for purposes of calculating our equity in income of ASI.

SIX MONTHS ENDED
JUNE 30, JUNE 30,
2001 2000
---------------- ---------------
(IN THOUSANDS)

SUMMARY INCOME STATEMENT INFORMATION FOR ASI

Net revenues....................................................... $ 70,449 $ 157,596
Gross profit (deficit).............................................. (49,662) 29,264
Loss from continuing operations..................................... (84,335) (19,254)
Net income (loss)................................................... (84,335) 459,310

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JUNE 30, DECEMBER 31,
2001 2000
---------------- ---------------
SUMMARY BALANCE SHEET INFORMATION FOR ASI (IN THOUSANDS)

Cash, including restricted cash and bank deposits...............................$ 124,475 $ 224,629
Property, plant and equipment, net.............................................. 721,074 793,850
Current assets.................................................................. 171,643 303,486
Noncurrent assets (including property, plant and equipment)..................... 862,749 943,458
Current liabilities............................................................. 131,784 158,910
Total debt and other long-term financing (including current portion)............ 283,255 370,976
Noncurrent liabilities (including debt and other long-term financing)........... 225,140 326,708
Total stockholders' equity...................................................... 677,468 761,326

4. INVENTORIES

Inventories consist of raw materials and purchased components that are
used in the semiconductor packaging process. Inventories are located at our
facilities in the Philippines, Korea, Japan and China. Components of inventories
follow:

JUNE 30, DECEMBER 31,
2001 2000
---------------- ---------------
(IN THOUSANDS)

Raw materials and purchased components........................ $ 75,031 $ 99,570
Work-in-process............................................... 8,770 9,043
---------------- ---------------
$ 83,801 $ 108,613
================ ===============

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

JUNE 30, DECEMBER 31,
2001 2000
---------------- ---------------
(IN THOUSANDS)

Land .................................................................... $ 80,038 $ 80,048
Buildings and improvements................................................ 450,180 445,785
Machinery and equipment................................................... 1,607,217 1,506,774
Furniture, fixtures and other equipment................................... 89,549 79,691
Construction in progress.................................................. 95,002 70,753
---------------- ---------------
2,321,986 2,183,051
Less -- Accumulated depreciation and amortization......................... (868,711) (704,541)
---------------- ---------------
$ 1,453,275 $ 1,478,510
================ ===============

6. INVESTMENTS

Investments include equity investments in affiliated companies and
noncurrent marketable securities as follows:

JUNE 30, DECEMBER 31,
2001 2000
---------------- ---------------
(IN THOUSANDS)

Equity investments under the equity method:
ASI (ownership of 42%)................................................ $ 425,802 $ 478,943
Other equity investments (20% - 50% owned)
Taiwan Semiconductor Technology Corporation........................ 18,134 17,488
Other.............................................................. 787 664
---------------- ---------------
Total equity investments......................................... 444,723 497,095
Marketable securities classified as available for sale................... 4,099 4,159
---------------- ---------------
$ 448,822 $ 501,254
================ ===============

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7. DEBT

Following is a summary of short-term borrowings and long-term debt:

JUNE 30, DECEMBER 31,
2001 2000
---------------- ---------------
(IN THOUSANDS)

Secured bank facility:
Term A loan, LIBOR plus 2.75% due March 2005.................................... -- 297,500
Term B loan, LIBOR plus 3% due September 2005................................... 223,625 347,375
$200.0 million revolving line of credit, LIBOR plus 2.75% due March 2005........ -- 80,000
9.25% Senior notes due May 2006.................................................... 425,000 425,000
9.25% Senior notes due February 2008............................................... 500,000 --
10.5% Senior subordinated notes due May 2009....................................... 200,000 200,000
5.75% Convertible subordinated notes due May 2006.................................. 250,000 --
5.75% Convertible subordinated notes due May 2003.................................. -- 50,191
5% Convertible subordinated notes due March 2007................................... 258,750 258,750
Other debt......................................................................... 49,116 306
---------------- ---------------
1,906,491 1,659,122
Less -- Short-term borrowings and current portion of long-term debt................ (30,272) (73,586)
---------------- ---------------
$ 1,876,219 $ 1,585,536
================ ===============

In May 2001, we sold $250.0 million principal amount of our 5.75%
convertible subordinated notes due 2006 in a private placement. The notes are
convertible into Amkor common stock at a conversion price of $35.00 per share.
We used $122.0 million of the $243.0 million of the net proceeds of that
offering to repay amounts outstanding under the Term B loans of our secured bank
facility, and the balance of the net proceeds was available to be used for
general corporate and working capital purposes. In connection with the repayment
in May 2001 of the Term B loans, we expensed $2.3 million of unamortized
deferred debt issuance costs.

In May 2001, we called for the redemption of all of the 5.75% convertible
subordinated notes due May 2003. In anticipation of the redemption,
substantially all of the holders of the convertible notes opted to convert their
notes into Amkor common stock and, accordingly, $50.2 million of the convertible
notes were converted to 3.7 million of our common stock. In connection with the
conversion of the 5.75% convertible subordinated notes due May 2003, $1.2
million of unamortized deferred debt issuance costs was charged to additional
paid-in capital.

In February 2001, we sold $500.0 million principal amount of our 9.25%
senior notes due 2008 in a private placement. We used $387.5 million of the
$490.0 million of the net proceeds of that offering to repay amounts outstanding
under the Term A loans and revolving line of credit of our secured bank
facility, and the balance of the net proceeds was available to be used for
general corporate and working capital purposes. In connection with the repayment
in February 2001 of the Term A loans, we expensed $7.1 million of unamortized
deferred debt issuance costs.

Other debt as of June 30, 2001 included the financing related to Amkor
Iwate's acquisition of a packaging and test facility at a Toshiba factory
located in the Iwate prefecture in Japan.

In connection with our issuance of the 5.75% convertible subordinated
notes due 2006 in May 2001, we incurred debt issuance costs of $7.0 million. In
connection with our issuance of the 9.25% senior notes due 2008 and the
amendment to our secured bank facility in February 2001, we incurred debt
issuance costs of $11.0 million. The debt issuance costs have been deferred and
are being amortized over the life of the associated debt. Deferred debt issuance
costs are included, net of amortization, in other noncurrent assets in the
consolidated balance sheet.

Interest expense related to short-term borrowings and long-term debt is
presented net of interest income of $5.4 million and $8.3 million for the six
months ended June 30, 2001 and 2000, respectively, in the accompanying
consolidated statements of income.

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8. EARNINGS PER SHARE

SFAS No. 128, "Earnings Per Share," requires dual presentation of basic
and diluted earnings per share on the face of the income statement. Basic EPS is
computed using only the weighted average number of common shares outstanding for
the period while diluted EPS is computed assuming conversion of all dilutive
securities, such as options. As a result of the net loss for the three and six
months ended June 30, 2001, potentially dilutive securities are excluded from
the diluted weighted average shares calculation for the three and six months
ended June 30, 2001 because the result would be antidilutive. The following
table presents a reconciliation of basic and diluted earnings, weighted average
shares and per share amounts for the three and six months ended June 30, 2000:

FOR THE THREE MONTHS ENDED JUNE 30, 2000
---------------------------------------------------------
WEIGHTED
EARNINGS AVERAGE SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- --------------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Basic earnings per share............................... $ 30,936 148,530 $ 0.21
Impact of convertible notes............................ 606 3,726
Dilutive effect of options
and warrants........................................ -- 5,361
---------------- --------------- --------------
Diluted earnings per share............................. $ 31,542 157,617 $ 0.20
================ =============== ==============

FOR THE SIX MONTHS ENDED JUNE 30, 2000
----------------------------------------------------------
WEIGHTED
EARNINGS AVERAGE SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------------------------------------------------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Basic earnings per share.......................... $ 68,092 139,701 $ 0.49
Impact of convertible notes....................... 1,190 3,771
Dilutive effect of options
and warrants................................... -- 4,606
---------------- --------------- --------------
Diluted earnings per share........................ $ 69,282 148,078 $ 0.47
================ =============== ==============

9. SEGMENT INFORMATION

In accordance with SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," we have two reportable segments, packaging
and test services and wafer fabrication services. These segments are managed
separately because the services provided by each segment require different
technology and marketing strategies.

Packaging and Test Services. Through our factories located in the
Philippines, Korea, Japan and China, we offer a complete and integrated set of
packaging and test services including integrated circuit (IC) packaging design,
leadframe and substrate design, IC package assembly, final testing, burn-in,
reliability testing and thermal and electrical characterization.

Wafer Fabrication Services. Through our wafer fabrication services
division, we provide marketing, engineering and support services of ASI's wafer
foundry, under a long-term supply agreement.

We derive a substantial portion of our wafer fabrication revenues from
Texas Instruments (TI). Total net revenues derived from TI accounted for 7.5%
and 15.4% of our consolidated net revenues for the six months ended June 30,
2001 and 2000, respectively. With the commencement of operations of Amkor Iwate
and the acquisition of a packaging and test facility from Toshiba, total net
revenues derived from Toshiba accounted for 14.6% of our consolidated net
revenues for the six months ended June 30, 2001.

The accounting policies for segment reporting are the same as those for our
consolidated financial statements. We evaluate our operating segments based on
operating income. Summarized financial information concerning reportable
segments is shown in the following table. The "Other" column includes the
elimination of inter-segment balances and corporate assets which include cash
and cash equivalents, non-operating balances due from affiliates, investment in
ASI and Taiwan Semiconductor Technology Corporation and other investments.

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PACKAGING WAFER
AND TEST FABRICATION OTHER TOTAL
-----------------------------------------------------------------------------
(IN THOUSANDS)

Three Months Ended June 30, 2001
Net Revenues............................ $ 311,423 $ 38,746 $ -- $ 350,169
Gross Profit............................ 4,089 3,922 -- 8,011
Operating Income (Loss)................. (73,770) 1,708 -- (72,062)

Three Months Ended June 30, 2000
Net Revenues............................ $ 462,677 $ 84,359 $ -- $ 547,036
Gross Profit............................ 131,130 8,465 -- 139,595
Operating Income........................ 67,621 4,778 -- 72,399

Six Months Ended June 30, 2001
Net Revenues............................ $ 750,836 $ 79,956 $ -- $ 830,792
Gross Profit............................ 82,061 7,735 -- 89,796
Operating Income........................ (79,867) 3,182 -- (76,685)

Six Months Ended June 30, 2000
Net Revenues............................ $ 931,612 $ 170,235 $ -- $ 1,101,847
Gross Profit............................ 237,658 16,968 -- 254,626
Operating Income (Loss)................. 125,439 10,361 -- 135,800

Total Assets
June 30, 2001........................... $ 2,627,699 $ 26,476 $ 802,587 $ 3,456,762
December 31, 2000....................... 2,732,733 46,231 614,320 3,393,284

The following presents property, plant and equipment, net based on the
location of the asset.

JUNE 30, DECEMBER 31,
2001 2000
---------------- ---------------
(IN THOUSANDS)

Property, Plant and Equipment, net
United States.................................................. $ 89,793 $ 84,351
Philippines.................................................... 539,022 579,619
Korea.......................................................... 780,260 813,983
Japan.......................................................... 36,310 174
China.......................................................... 7,350 --
Other foreign countries........................................ 540 383
---------------- ---------------
1,453,275 $ 1,478,510
================= ===============

10. COMMITMENTS AND CONTINGENCIES

Amkor is involved in various claims incidental to the conduct of our
business. Based on consultation with legal counsel, we do not believe that any
claims, either individually or in the aggregate, to which the company is a party
will have a material adverse effect on our financial condition or results of
operations.

We are disputing certain amounts due under a technology license agreement
with a third party. To date, this dispute has not involved the judicial systems.
We remit to the third party our estimate of amounts due under this agreement.
Depending on the outcome of this dispute, the ultimate payable by us, as of June
30, 2001, could be up to an additional $13.2 million. The third party is not
actively pursuing resolution to this dispute and we have not accrued the
potential additional amount.

11. SUBSEQUENT EVENTS

In June 2001, we entered into definitive agreements to acquire, in separate
transactions, Taiwan Semiconductor Corporation (TSTC) and Sampo Semiconductor
Corporation (SSC) in Taiwan. The transactions were consummated in July 2001. The
combined purchase

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price of these acquisitions was principally paid with the issuance of 4.9
million shares of our common stock, the assumption of $34.8 million of debt and
approximately $6.0 million of cash consideration, net of acquired cash. Both
transactions have earn-out provisions based in part on the results of each of
the acquisitions. Based on the earn-out provisions, we could be required to
issue an additional 1.8 million shares in January 2002 and may pay additional
cash consideration of approximately $9.0 million in July 2002.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains forward-looking statements within the
meaning of the federal securities laws, including but not limited to statements
regarding: (1) the condition of the industry in which we operate, including
demand and selling prices for our services, (2) our anticipated capital
expenditures and financing needs, (3) our belief as to our future operating
performance, (4) statements regarding the future of our relationship with ASI
and (5) other statements that are not historical facts. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue," or the negative of these terms or other
comparable terminology. Because such statements include risks and uncertainties,
actual results may differ materially from those anticipated in such
forward-looking statements as a result of certain factors, including those set
forth in the following discussion as well as in "Risk Factors that May Affect
Future Operating Performance." The following discussion provides information and
analysis of our results of operations for the three and six months ended June
30, 2001 and our liquidity and capital resources. You should read the following
discussion in conjunction with our consolidated financial statements and the
related notes, included elsewhere in this quarterly report as well as the
reports we file with the Securities and Exchange Commission.

INDUSTRY AND BUSINESS OUTLOOK

Amkor is the world's largest independent provider of semiconductor
packaging and test services. The company has built a leading position through:
(i) one of the industry's broadest offerings of packaging and test services,
(ii) expertise in the development and implementation of packaging and test
technology, (iii) long-standing relationships with customers, and (iv) advanced
manufacturing capabilities. We also market the wafer fabrication output provided
by a foundry owned by Anam Semiconductor, Inc. (ASI). The semiconductors that we
package and test for our customers are ultimately components in communications,
computer, industrial, consumer, automotive and military systems.

Our business is tied to market conditions in the semiconductor industry,
which is highly cyclical. Based on industry estimates, from 1978 through 2000,
there were 10 years when semiconductor industry growth was 10% or less and 13
years when growth was 19% or greater. The strength of the semiconductor industry
is dependent primarily upon the strength of the computer and communications
systems markets. Since 1970, the semiconductor industry declined in 1975, 1985,
1996 and 1998. The semiconductor industry began to expand subsequent to the 1998
downturn with a growth rate in revenues of 19% and 36% in 1999 and 2000. The
historical trends in the semiconductor industry are not necessarily indicative
of the results of any future period. The semiconductor industry has weakened
significantly beginning in the fourth quarter of 2000 into 2001. The expected
continued weakness in the semiconductor industry is causing industry analysts to
forecast a decline in the semiconductor industry for 2001 of an estimated 28%.
Our customers have reduced their forecasts as a result of the broad weakness in
the semiconductor industry, uncertainty about end market demand, and excess
inventory across the semiconductor industry supply chain. The significant
uncertainty throughout the industry is hindering the visibility throughout the
supply chain and that lack of visibility makes it difficult to forecast the end
of the weakness in the semiconductor industry. The weaker demand is expected to
continue to adversely impact our results in 2001.

During the current industry downturn, our business strategy has been to
move forward with geographic diversification, invest in next-generation
technology, and enhance our financial flexibility. We commenced operations in
Japan in connection with our joint venture with Toshiba, constructed an assembly
and test facility in China and consummated two acquisitions in Taiwan. We
continue to evaluate additional acquisition and investment opportunities.
Although we have significantly reduced our capital expenditure plans, we are
committed to investing in new technologies primarily to support the development
of our Flip Chip, System-in-Package and high-end BGA capabilities. We raised
$500.0 million of 9.25% senior notes due 2008 and $250.0 million of 5.75%
convertible subordinated notes due 2006. Of the combined net proceeds of $733.0
million, we used $509.5 million to repay amortizing term loans. With the
repayment of the term loans, we eliminated $70.0 million in principal payments
due in 2001. The balance of the net proceeds supports our expansion efforts and
general corporate and working capital purposes. Our cash and cash equivalent
balance as of June 30, 2001 was $339.1 million.

During the second half of the year ended December 31, 2000, we had
significantly increased our operating costs to service the demand we were
experiencing and expecting. Beginning in 2001, we implemented numerous cost
reduction initiatives as a significant part of our financial strategy to
partially mitigate the impact of the industry downturn on our results of
operations and cash flows. Our cost reduction efforts included reducing our
worldwide headcount, reducing compensation levels, shortening work schedules,
improving factory efficiencies, and negotiating cost reductions with our
vendors.

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We reduced our headcount in the Philippines and Korea by approximately 2,400
employees or 11% from the employment levels at December 31, 2000. Labor costs,
excluding one-time severance costs, in the Philippines and Korea were reduced by
$16.6 million or 18% for the three months ended June 30, 2001 as compared with
the three months ended December 31, 2000. We reduced our administrative
headcount, excluding the effects of acquisitions, by 8% from the employment
levels at December 31, 2000. General, selling and administrative salaries and
compensation, excluding the effects of acquisitions, were reduced by $3.1
million or 16% for the three months ended June 30, 2001 as compared with the
three months ended December 31, 2000. We estimate that for the three months
ended June 30, 2001 we reduced our factory operating costs and administrative
costs, excluding depreciation, materials and the impact of acquisitions and
expansions, by an estimated $28 million and $9 million, respectively, as
compared with the three months ended December 31, 2000.

Prices for packaging and test services and wafer fabrication services have
declined over time. Historically we have been able to partially offset the
effect of price declines by successfully developing and marketing new packages
with higher prices, such as advanced leadframe and laminate packages,
negotiating lower prices with our material vendors, and driving engineering and
technological changes in our packaging and test processes which resulted in
reduced manufacturing costs. We cannot assure you that we will be able to offset
any such price declines in the future.

The weakness in the semiconductor industry is also adversely affecting the
demand for the wafer output from ASI's foundry. Beginning in the fourth quarter
and continuing into 2001, demand for wafers deteriorated significantly.
Historically we derived a substantial portion of our wafer fabrication service
revenues from Texas Instruments. Wafers sales to Texas Instruments for the six
months ended June 30, 2001 decreased 65.3% as compared with the six months ended
June 30, 2000. We expect, as a result of the weaker demand for the wafer output
from ASI's foundry, our wafer fabrication services results and ASI's operating
results will continue to be adversely impacted in 2001. ASI's results impact us
through our recording of our share of their results in accordance with the
equity method of accounting.

OVERVIEW OF OUR HISTORICAL RESULTS

Financial Impact of Our Acquisition of K1, K2 and K3 and Investment in ASI on
Our Results of Operations

Historically we performed packaging and test services at our factories in
the Philippines and subcontracted for additional services with ASI which
operated four packaging and test facilities in Korea. In May 1999, we acquired
K4, one of ASI's packaging and test facilities, and in May 2000 we acquired
ASI's remaining packaging and test facilities, K1, K2 and K3. With the
completion of our acquisition of K1, K2 and K3, we no longer depend upon ASI for
packaging or test services, but we continue to market ASI's wafer fabrication
services.

There was not a significant change in our revenues as a result of the
acquisition of K1, K2 and K3, because we historically sold substantially all of
the output of those facilities. Our gross margins on sales of services performed
by ASI were set in accordance with supply agreements with ASI and were generally
lower than our gross margins of services performed by our factories in the
Philippines. Effective with our May 2000 acquisition of K1, K2 and K3, we no
longer pay service charges to ASI for packaging and test services. Our gross
margins were favorably impacted by the termination of the supply agreement, but
such favorable impact was partially offset by the additional operating costs
that were previously borne by ASI for K1, K2 and K3 and the amortization of
$555.8 million of goodwill and acquired intangibles over a 10-year period.

Our interest expense increased due to the total debt we incurred to
finance the $950.0 million acquisition of K1, K2 and K3 and our $459.0 million
investment in ASI. Our overall effective tax rate decreased due to a 100% tax
holiday for seven years, with an anticipated expiration in 2006, on K1, K2 and
K3's results of operations. Upon the expiration of the 100% tax holiday, we will
have a 50% tax holiday for three additional years. As of June 30, 2001, we owned
42% of ASI's outstanding voting stock and we report ASI's results in our
financial statements through the equity method of accounting.

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Financial Impact of Our Joint Venture with Toshiba Corporation

As of January 1, 2001, Amkor Iwate Corporation commenced operations with
the acquisition of a packaging and test facility at a Toshiba factory located in
the Iwate prefecture in Japan. Amkor Iwate provides packaging and test services
to Toshiba's Iwate factory under a long-term supply agreement. We currently own
60% of Amkor Iwate and Toshiba owns the balance of the outstanding shares.
Within three years we are required to purchase the remaining 40% of the
outstanding shares of Amkor Iwate from Toshiba. The share purchase price will be
determined based on the performance of the joint venture during the three-year
period but cannot be less than 1 billion Japanese yen and cannot exceed 4
billion Japanese yen.

The results of Amkor Iwate have been included in the accompanying
consolidated financial statements since January 2001. Our revenues increased as
a result of the packaging and test services performed by Amkor Iwate for Toshiba
under the supply agreement. Gross margins as a percentage of net revenues were
negatively impacted given the terms of the supply agreement provide for gross
margins lower than our historical gross margins on services performed by our
other factories. Operating expenses increased as a result of the additional
administrative expenses incurred by Amkor Iwate and the amortization of $21.9
million of goodwill and acquired intangibles over 5 to 10 years. Interest
expense increased as a result of the debt incurred to finance the purchase of
the packaging and test assets from Toshiba.

RESULTS OF OPERATIONS

The following table sets forth certain operating data as a percentage of
net revenues for the periods indicated:

FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------------ ------------------------------------
2001 2000 2001 2000
---------------- -------------- ---------------- ---------------
(UNAUDITED) (UNAUDITED)

Net revenues....................................... 100.0% 100.0% 100.0% 100.0%
Gross profit....................................... 2.3 25.5 10.8 23.1
Operating income (loss)............................ (20.6) 13.2 (9.2) 12.3
Income (loss) before income taxes and equity in
income (loss) of investees................... (32.8) 7.6 (19.6) 7.8
Net income (loss).................................. (33.2) 5.7 (22.3) 6.2

Three Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2000

Net Revenues. Net revenues decreased $196.8 million, or 36.0%, to $350.2
million in the three months ended June 30, 2001 from $547.0 million in the three
months ended June 30, 2000. Packaging and test net revenues decreased 32.7% to
$311.4 million in the three months ended June 30, 2001 from $462.7 million in
the three months ended June 30, 2000. Wafer fabrication net revenues decreased
54.1% to $38.7 million in the three months ended June 30, 2001 from $84.4
million in the three months ended June 30, 2000.

The decrease in packaging and test net revenues, excluding the impact of
acquisitions, was primarily attributable to a 40.3% decrease in overall unit
volumes in the three months ended June 30, 2001 compared to the three months
ended June 30, 2000. This overall unit volume decrease was driven by a 43.2%
unit volume decrease for advanced leadframe and laminate packages and a 37.8%
decrease in our traditional leadframe business as a result of a broad based
decrease in demand for semiconductors. Average selling prices across all product
lines eroded approximately 10% for the three months ended June 30, 2001 as
compared to the three months ended June 30, 2000. Partially offsetting the
decrease in overall unit volumes and average selling price erosion was the
benefit of $49.7 million in net revenues for the three months ended June 30,
2001 related to Amkor Iwate in Japan which commenced operations in January 2001.

The decrease in wafer fabrication net revenues was primarily attributed to
a 59.6% decrease in sales to Texas Instruments in the three months ended June
30, 2001 as compared with the three months ended June 30, 2000.

Gross Profit. Gross profit decreased $131.6 million, or 94.3%, to $8.0
million, or 2.3% of net revenues, in the three months ended June 30, 2001 from
$139.6 million, or 25.5% of net revenues, in the three months ended June 30,
2000. Our cost of revenues consists principally of costs of materials, labor and
depreciation. Because a substantial portion of our costs at our factories is
fixed, significant increases or decreases in capacity utilization rates have a
significant effect on our gross profit.

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Gross margins as a percentage of net revenues were negatively impacted by:

- Decreasing unit volumes in 2001, which drove a higher manufacturing
cost per unit as a result of our factories' substantial fixed costs;

- Average selling price erosion across our product lines; and

- Packaging and test services performed by Amkor Iwate under a long-term
supply agreement with Toshiba that provides for gross margins lower
than our historical gross margins on services performed by our other
factories.

The negative impact on gross margins was partially offset by:

- The favorable impact of the termination of our supply agreement with
ASI effective with our May 2000 acquisition of K1, K2 and K3. Such
favorable impact was partially offset by the additional operating
costs that were previously borne by ASI for K1, K2 and K3; and

- Cost reduction initiatives implemented in the first and second quarter
of 2001, the full effect of which will not benefit the company until
the third quarter of 2001.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $4.5 million, or 9.6%, to $51.4 million, or
14.7% of net revenues, in the three months ended June 30, 2001 from $46.9
million, or 8.6% of net revenues, in the three months ended June 30, 2000. The
increase in these costs was due to:

- Increased costs related to the commencement of operations of Amkor
Iwate in Japan as well as our operations in China;

- Increased costs related to our Korean factories primarily as a result
of the assumption of the general and administrative expenses of K1, K2
and K3 following our acquisition in May 2000; and

- Increased headcount and related personnel costs within our worldwide
sales, engineering support and System-in-Package groups.

The increase in selling, general and administrative expenses was partially
offset by:

- Reduced compensation related expenses; and

- Reduced administrative expenses as a result of cost reduction
initiatives.

Research and Development. Research and development expenses increased $3.2
million to $8.1 million, or 2.3% of net revenues, in the three months ended June
30, 2001 from $4.9 million, or 0.9% of net revenues, in the three months ended
June 30, 2000. Increased research and development expenses resulted from the
acquisition of the packaging and test research and development group within ASI
related to the K1, K2 and K3 transaction. Our research and development efforts
support our customers' needs for smaller packages and increased functionality.
We continue to invest our research and development resources to continue the
development of our Flip Chip interconnection solutions, our System-in-Package
technology, that uses both advanced packaging and traditional surface mount
techniques to enable the combination of technologies in a single package, and
our Chip Scale packages that are nearly the size of the semiconductor die.

Amortization of Goodwill and Other Acquired Intangibles. Amortization of
goodwill and other acquired intangibles increased $5.2 million to $20.6 million
from $15.4 million in the three months ended June 30, 2000 principally as a
result of our May 2000 acquisition of K1, K2 and K3 and to our January 2001
acquisition of Amkor Iwate.

Other (Income) Expense. Other expenses increased $11.8 million, to $42.7
million, or 12.2% of net revenues, in the three months ended June 30, 2001 from
$30.9 million, or 5.6% of net revenues, in the three months ended June 30, 2000.
The net increase in other expenses was primarily a result of an increase in net
interest expense of $11.0 million. The increased interest expense resulted from
the financing related to our May 2000 acquisition of K1, K2 and K3 and our
investment in ASI and our 2001 financing activities which are more fully
detailed in our discussion of "Liquidity and Capital Resources." Net interest
expense for the three months ended June 30, 2001 included $2.3 million of
unamortized deferred debt issuance costs expensed in connection with the
repayment in May 2001 of term loans outstanding under our secured bank facility.

16
17
Income Taxes. Our effective tax rate in the three months ended June 30,
2001 and the three months ended June 30, 2000 was 22.4% and 15.0%, respectively.
The increase in the effective tax rate in 2001 was due to operating losses in
jurisdictions with higher corporate income tax rates. The tax returns for open
years are subject to changes upon final examination. Changes in the mix of
income from our foreign subsidiaries, expiration of tax holidays and changes in
tax laws and regulations could result in increased effective tax rates for us in
the future.

Equity in Loss of Investees. Our earnings included our share of losses in
our equity affiliates, principally ASI, in the three months ended June 30, 2001
of $17.5 million and our share of their income in the three months ended June
30, 2000 of $0.6 million. Our earnings also included the amortization of the
excess of the cost of our investment above of our share of the underlying net
assets of $8.9 million and $4.9 million in the three months ended June 30, 2001
and the three months ended June 30, 2000, respectively. Our investment in ASI
increased to 42% as of October 2000 from 40% as of September 2000, 38% as of May
2000 and 18% as of October 1999.

Six months ended June 30, 2001 Compared to Six months ended June 30, 2000

Net Revenues. Net revenues decreased $271.0 million, or 24.6%, to $830.8
million in the six months ended June 30, 2001 from $1,101.8 million in the six
months ended June 30, 2000. Packaging and test net revenues decreased 19.4% to
$750.8 million in the six months ended June 30, 2001 from $931.6 million in the
six months ended June 30, 2000. Wafer fabrication net revenues decreased 53.0%
to $80.0 million in the six months ended June 30, 2001 from $170.2 million in
the six months ended June 30, 2000.

The decrease in packaging and test net revenues, excluding the impact of
acquisitions, was primarily attributable to a 28.7% decrease in overall unit
volumes in the six months ended June 30, 2001 compared to the six months ended
June 30, 2000. This overall unit volume decrease was driven by a 31.4% unit
volume decrease for advanced leadframe and laminate packages and a 26.5%
decrease in our traditional leadframe business as a result of a broad based
decrease in demand for semiconductors. Average selling prices across all product
lines eroded approximately 10% for the six months ended June 30, 2001 as
compared to the six months ended June 30, 2000. Partially offsetting the
decrease in overall unit volumes and average selling price erosion was the
benefit of $108.8 million in net revenues related to the commencement of
operations of Amkor Iwate in Japan in January 2001.

The decrease in wafer fabrication net revenues was primarily attributed to
a 65.3% decrease in sales to Texas Instruments in the six months ended June 30,
2001 as compared with the six months ended June 30, 2000.

Gross Profit. Gross profit decreased $164.8 million, or 64.7%, to $89.8
million, or 10.8% of net revenues, in the six months ended June 30, 2001 from
$254.6 million, or 23.1% of net revenues, in the six months ended June 30, 2000.
Our cost of revenues consists principally of costs of materials, labor and
depreciation. Because a substantial portion of our costs at our factories is
fixed, significant increases or decreases in capacity utilization rates have a
significant effect on our gross profit.

Gross margins as a percentage of net revenues were negatively impacted by:

- Decreasing unit volumes in 2001, which drove a higher manufacturing
cost per unit as a result of our factories' substantial fixed costs;

- Average selling price erosion across our product lines; and

The negative impact on gross margins was partially offset by:

- Cost reduction initiatives implemented in the first and second quarter
of 2001, the full effect of which will not benefit the company until
the third quarter of 2001.
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Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $16.6 million, or 18.7%, to $105.4 million, or
12.7% of net revenues, in the six months ended June 30, 2001 from $88.8 million,
or 8.1% of net revenues, in the six months ended June 30, 2000. The increase in
these costs was due to:

- Increased costs related to the commencement of operations of Amkor
Iwate in Japan as well as our operations in China;

- Increased costs related to our Korean factories primarily as a result
of the assumption of the general and administrative expenses of K1, K2
and K3 following our acquisition in May 2000; and

- Increased headcount and related personnel costs within our worldwide
sales, engineering support and System-in-Package groups.

The increase in selling, general and administrative expenses was partially
offset by:

- Reduced compensation related expenses; and

- Reduced administrative expenses as a result of cost reduction
initiatives.

Research and Development. Research and development expenses increased
$10.4 million to $18.6 million, or 2.2% of net revenues, in the six months ended
June 30, 2001 from $8.2 million, or 0.7% of net revenues, in the six months
ended June 30, 2000. Increased research and development expenses resulted from
the acquisition of the packaging and test research and development group within
ASI related to the K1, K2 and K3 transaction. Our research and development
efforts support our customers' needs for smaller packages and increased
functionality. We continue to invest our research and development resources to
continue the development of our Flip Chip interconnection solutions, our
System-in-Package technology, that uses both advanced packaging and traditional
surface mount techniques to enable the combination of technologies in a single
package, and our Chip Scale packages that are nearly the size of the
semiconductor die.

Amortization of Goodwill and Other Acquired Intangibles. Amortization of
goodwill and other acquired intangibles increased $20.7 million to $42.5 million
from $21.8 million in the six months ended June 30, 2000 principally as a result
of our May 2000 acquisition of K1, K2 and K3 and to a lesser extent our January
2001 acquisition of Amkor Iwate.

Other (Income) Expense. Other expenses increased $36.9 million, to $86.4
million, or 10.4% of net revenues, in the six months ended June 30, 2001 from
$49.5 million, or 4.5% of net revenues, in the six months ended June 30, 2000.
The net increase in other expenses was primarily a result of an increase in
interest expense of $40.3 million. The increased interest expense resulted from
the financing related to our May 2000 acquisition of K1, K2 and K3 and our
investment in ASI and our 2001 financing activities which are more fully
detailed in our discussion of "Liquidity and Capital Resources." Net interest
expense for the six months ended June 30, 2001 also included $9.4 million of
unamortized deferred debt issuance costs expensed in connection with the
repayment in February and May 2001 of term loans outstanding under our secured
bank facility.

Other expenses were favorably impacted by a change in foreign currency
gains and losses of $1.5 million for the six months ended June 30, 2001 as
compared with the corresponding period in the prior year. Other expenses were
also favorably impacted by a savings of $1.1 million in accounts receivable
securitization charges as a result of the termination of a securitization
agreement at the end of March 2000.

Income Taxes. Our effective tax rate in the six months ended June 30, 2001
and the six months ended June 30, 2000 was 19.0% and 17.6%, respectively. The
increase in the effective tax rate in 2001 was due to operating losses in
jurisdictions with higher corporate income tax rates. The tax returns for open
years are subject to changes upon final examination. Changes in the mix of
income from our foreign subsidiaries, expiration of tax holidays and changes in
tax laws and regulations could result in increased effective tax rates for us in
the future.

Equity in Loss of Investees. Our earnings included our share of losses in
our equity affiliates, principally ASI, in the six months ended June 30, 2001 of
$34.9 million and our share of their income in the six months ended June 30,
2000 of $5.5 million. Our earnings also included the amortization of the excess
of the cost of our investment above of our share of the underlying net assets of
$17.7 million and $8.5 million in the six months ended June 30, 2001 and the six
months ended June 30, 2000, respectively. Our investment in ASI increased to 42%
as of October 2000 from 40% as of September 2000, 38% as of May 2000 and 18% as
of October 1999.

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LIQUIDITY AND CAPITAL RESOURCES

Our ongoing primary cash needs are for equipment purchases, factory
expansions, interest and principal payments on our debt and working capital, in
addition to acquisitions and investments.

In June 2001, we entered into definitive agreements to acquire, in
separate transactions, Taiwan Semiconductor Corporation and Sampo Semiconductor
Corporation in Taiwan. The transactions were consummated in July 2001. The
combined purchase price of these acquisitions was principally paid with the
issuance of 4.9 million shares of our common stock, the assumption of $34.8
million of debt and approximately $6.0 million of cash consideration, net of
acquired cash. Both transactions have earn-out provisions based in part on the
results of each of the acquisitions. Based on the earn-out provisions, we could
be required to issue an additional 1.8 million shares in January 2002 and may
pay additional cash consideration of approximately $9.0 million in July 2002.

In May 2001, we sold $250.0 million principal amount of our 5.75%
convertible subordinated notes due 2006 in a private placement. The notes are
convertible into Amkor common stock at a conversion price of $35.00 per share.
In February 2001, we sold $500.0 million principal amount of our 9.25% senior
notes due 2008 in a private placement. We used $509.5 million of the combined
net proceeds of $733.0 million to repay amounts outstanding under our secured
bank facilities, which accrued interest at LIBOR plus 2.75% - 3%. The balance of
the net proceeds was available to be used for general corporate and working
capital purposes. With the repayment of the term loans, we eliminated $70.0
million in principal payments due in 2001.

In March 2001 and June 2001, we amended the secured bank facilities to
relax certain of the covenants and to provide us with additional operating
flexibility. As of June 30, 2001, no amounts were drawn under the $200.0 million
revolving line of credit provided within the secured bank facility. As a result
of limitations based on the outstanding accounts receivable, approximately
$130.0 million was available to be drawn under this revolving line of credit at
June 30, 2001.

In January 2001, Amkor Iwate Corporation commenced operations with the
acquisition of a packaging and test facility at a Toshiba factory located in the
Iwate prefecture in Japan. Amkor Iwate provides packaging and test services to
Toshiba's Iwate wafer foundry under a long-term supply agreement. We currently
own 60% of Amkor Iwate and Toshiba owns the balance of the outstanding shares.
Within three years we are required to purchase the remaining 40% of the
outstanding shares of Amkor Iwate from Toshiba. The share purchase price will be
determined based on the performance of the joint venture during the three-year
period but cannot be less than 1 billion Japanese yen and cannot exceed 4
billion Japanese yen. The acquisition of the Toshiba packaging and test
operations in Iwate, Japan by Amkor Iwate was financed by a short-term note
payable to Toshiba of $21.1 million and $47.0 million in other financing from a
Toshiba affiliated financing company.

In June 2001, we completed construction of an assembly and test facility
in Shanghai, China. We continue to qualify several package technologies and
expect to build revenues slowly during the second half of 2001 and more rapidly
in 2002. We principally used underutilized equipment from the Philippines and
Korea to equip the Shanghai facility. We do not expect our Chinese operations to
contribute or utilize significant cash flow during the remainder of 2001.

In May 2000 we completed our purchase of ASI's remaining three packaging
and test factories, known as K1, K2 and K3 for a purchase price of $950.0
million. In connection with our acquisition of K1, K2 and K3 we made an
additional equity investment in ASI of $459.0 million and as of June 30, 2001 we
owned 42% of ASI. We financed the acquisition and investment with the proceeds
of a $258.8 million convertible subordinated notes offering, a $410.0 million
private equity financing, $750.0 million of secured bank debt and approximately
$103 million of cash on hand. In conjunction with the private equity financing,
we issued 20.5 million shares of our common stock in the private equity offering
and granted warrants to purchase 3.9 million additional shares of our common
stock at $27.50 per share.

In connection with the secured bank debt, we terminated, during the second
quarter of 2000, a trade receivables securitization agreement and repaid $71.5
million due under this facility. The securitization agreement represented a
commitment by a commercial financial institution to purchase, with limited
recourse, all right, title and interest in up to $100 million in eligible
receivables. In addition, we repaid $11.4 million of additional secured term
loans.

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We have invested significant amounts of capital to increase our packaging
and test services capacity. During 2000 we constructed our P4 facility in the
Philippines, added capacity in our other factories in the Philippines and Korea
and constructed a new research and development facility in the U.S. During the
six months ended June 30, 2001 and 2000, we made capital expenditures of $112.7
million and $288.8 million, respectively. During the year ended December 31,
2000 we made capital expenditures of $480.1 million. As a result of the current
business conditions, we have significantly reduced our capital expenditure
plans. We expect to spend approximately $150.0 million in total capital
expenditures in 2001, excluding any capital requirements of the companies we
have or expect to acquire in 2001, primarily to support the development of our
Flip Chip, System-in-Package and high-end BGA capabilities.

Covenants in the agreements governing our existing debt, and debt we may
incur in the future, may materially restrict our operations, including our
ability to incur debt, pay dividends, make certain investments and payments and
encumber or dispose of assets. In addition, financial covenants contained in
agreements relating to our existing and future debt could lead to a default in
the event our results of operations do not meet our plans. A default under one
debt instrument may also trigger cross-defaults under our other debt
instruments. An event of default under any debt instrument, if not cured or
waived, could have a material adverse effect on us. As a result of the continued
weakness in the semiconductor industry, in June 2001 we amended our existing
credit facility to relax certain of the financial covenants. However, if the
weakness in the semiconductor industry and for our services continues, we can
not give assurance that we will be able to remain in compliance with our
financial covenants. In the event of default, we may not be able to cure the
default or obtain a waiver, and our operations could be significantly disrupted
and harmed.

Net cash provided by operating activities during the six months ended June
30, 2001 and 2000 was $134.2 million and $159.2 million, respectively. Net cash
used in investing activities during the six months ended June 30, 2001 and 2000
was $119.4 million and $1,543.0 million, respectively. Net cash provided by
financing activities during the six months ended June 30, 2001 and 2000 was
$231.2 million and $1,422.0 million, respectively.

The continued weakness in demand expected in 2001 for packaging, test and
wafer fabrication services will adversely affect our results and cash flows from
operations. We have undertaken a variety of measures to reduce our operating
costs including reducing our worldwide headcount, reducing compensation levels,
shortening work schedules, improving factory efficiencies, and negotiating cost
reductions with our vendors. We expect to continue to evaluate our existing
operations and investments. Additionally, we are pursuing business combination
opportunities to diversify our geographic operations and expand our customer
base. We will continue to evaluate the recorded value of our investments and
long-lived assets for potential impairment as a result of industry conditions or
changes in our business strategy.

We believe that our existing cash balances, available credit lines, cash
flow from operations and available equipment lease financing will be sufficient
to meet our projected capital expenditures, debt service, working capital and
other cash requirements for at least the next twelve months. We may require
capital sooner than currently expected. We cannot assure you that additional
financing will be available when we need it or, if available, that it will be
available on satisfactory terms. In addition, the terms of the secured bank
facility, senior notes and senior subordinated notes significantly reduce our
ability to incur additional debt. Failure to obtain any such required additional
financing could have a material adverse effect on our company.

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RISK FACTORS THAT MAY AFFECT FUTURE OPERATING PERFORMANCE

In addition to the factors discussed elsewhere in this form 10-Q and in
our report on Form 10-K for the year ended December 31, 2000 and our other
reports filed with the Securities and Exchange Commission, the following are
important factors which could cause actual results or events to differ
materially from those contained in any forward looking statements made by or on
behalf of Amkor.

DEPENDENCE ON THE HIGHLY CYCLICAL SEMICONDUCTOR AND ELECTRONIC PRODUCTS
INDUSTRIES -- WE OPERATE IN VOLATILE INDUSTRIES, AND INDUSTRY DOWNTURNS HARM OUR
PERFORMANCE.

Our business is tied to market conditions in the semiconductor industry, which
is highly cyclical. Because our business is, and will continue to be, dependent
on the requirements of semiconductor companies for independent packaging, test
and wafer fabrication services, any downturn in the semiconductor industry or
any other industry that uses a significant number of semiconductor devices, such
as the personal computer and telecommunication devices industries, could have a
material adverse effect on our business.

CONDITIONS IN THE SEMICONDUCTOR INDUSTRY HAVE WEAKENED SIGNIFICANTLY AND COULD
REMAIN WEAK OR WORSEN -- WE HAVE BEEN, AND MAY CONTINUE TO BE, AFFECTED BY THESE
TRENDS.

The semiconductor industry has weakened significantly recently and conditions
are expected to remain weak during 2001. The significant uncertainty throughout
the industry related to market demand is hindering the visibility throughout the
supply chain and that lack of visibility makes it difficult to forecast the end
of the weakness in the semiconductor industry. There can be no assurance that
overall industry conditions will not weaken further or last longer than we
currently expect, or what impact such a further or prolonged weakening would
have on our business.

FLUCTUATIONS IN OPERATING RESULTS -- OUR OPERATING RESULTS MAY VARY
SIGNIFICANTLY AS A RESULT OF FACTORS THAT WE CANNOT CONTROL.

Our operating results have varied significantly from period to period. Many
factors could materially and adversely affect our revenues, gross profit and
operating income, or lead to significant variability of quarterly or annual
operating results. These factors include, among others:

- the cyclical nature of both the semiconductor industry and the markets
addressed by end-users of semiconductors,
- the short-term nature of our customers' commitments, timing and volume
of orders relative to our production capacity,
- changes in our capacity utilization,
- evolutions in the life cycles of our customers' products,
- rescheduling and cancellation of large orders,
- erosion of packaging selling prices,
- fluctuations in wafer fabrication service charges paid to ASI,
- changes in costs, availability and delivery times of raw materials and
components and changes in costs and availability of labor,
- fluctuations in manufacturing yields,
- changes in product mix,
- timing of expenditures in anticipation of future orders,
- availability and cost of financing for expansion,
- ability to develop and implement new technologies on a timely basis,
- competitive factors,
- changes in effective tax rates,
- loss of key personnel or the shortage of available skilled workers,
- international political or economic events,
- currency and interest rate fluctuations,
- environmental events, and
- intellectual property transactions and disputes.

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DECLINING AVERAGE SELLING PRICES -- THE SEMICONDUCTOR INDUSTRY PLACES DOWNWARD
PRESSURE ON THE PRICES OF OUR PRODUCTS.

Historically, prices for our packaging and test services and wafer fabrication
services have declined over time. We expect that average selling prices for our
packaging and test services will continue to decline in the future. If we cannot
reduce the cost of our packaging and test services and wafer fabrication
services to offset a decline in average selling prices, our future operating
results could suffer.

RELATIONSHIP WITH ASI -- OUR BUSINESS PERFORMANCE CAN BE ADVERSELY AFFECTED BY
ASI'S FINANCIAL PERFORMANCE OR A DISRUPTION IN THE WAFER FABRICATION SERVICES
ASI PROVIDES TO US.

We report ASI's financial results in our financial statements, and if ASI
encounters financial difficulties, our financial performance could suffer. As of
June 30, 2001 we owned approximately 42% of ASI's outstanding voting stock.
Accordingly, we report ASI's financial results in our financial statements
through the equity method of accounting. If ASI's results of operations are
adversely affected for any reason (including as a result of losses at its
consolidated subsidiaries and equity investees), our results of operations will
suffer as well. Financial or other problems affecting ASI could also lead to a
complete loss of our investment in ASI. Our wafer fabrication business may
suffer if ASI reduces its operations or if our relationship with ASI is
disrupted.

Our wafer fabrication business depends on ASI providing wafer fabrication
services on a timely basis. If ASI were to significantly reduce or curtail its
operations for any reason, or if our relationship with ASI were to be disrupted
for any reason, our wafer fabrication business would be harmed. We may not be
able to identify and qualify alternate suppliers of wafer fabrication services
quickly, if at all. In addition, we currently have no other qualified third
party suppliers of wafer fabrication services and do not have any plans to
qualify additional third party suppliers.

The weakness in the semiconductor industry is also adversely affecting the
demand for the wafer output from ASI's foundry. Beginning in the fourth quarter
and continuing into 2001, demand for wafers deteriorated significantly. We
expect, as a result of the weaker demand for the wafer output from ASI's
foundry, our wafer fabrication services results and ASI's operating results will
continue to be adversely impacted in 2001.

ABSENCE OF BACKLOG -- WE MAY NOT BE ABLE TO ADJUST COSTS QUICKLY IF OUR
CUSTOMERS' DEMAND FALLS SUDDENLY.

Our packaging and test business does not typically operate with any material
backlog. We expect that in the future our packaging and test net revenues in any
quarter will continue to be substantially dependent upon our customers' demand
in that quarter. None of our customers has committed to purchase any significant
amount of packaging or test services or to provide us with binding forecasts of
demand for packaging and test services for any future period. In addition, our
customers could reduce, cancel or delay their purchases of packaging and test
services. Because a large portion of our costs is fixed and our expense levels
are based in part on our expectations of future revenues, we may be unable to
adjust costs in a timely manner to compensate for any revenue shortfall.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS -- WE DEPEND ON OUR FACTORIES IN
THE PHILIPPINES, KOREA AND JAPAN. MANY OF OUR CUSTOMERS' OPERATIONS ARE ALSO
LOCATED OUTSIDE OF THE U.S.

We provide packaging and test services through our factories located in the
Philippines, Korea and Japan. We also source wafer fabrication services from
ASI's wafer fabrication facility in Korea. In addition, we are beginning
operations in China. Moreover, many of our customers' operations are located
outside the U.S. The following are some of the risks inherent in doing business
internationally:

- regulatory limitations imposed by foreign governments;
- fluctuations in currency exchange rates;
- political risks;
- disruptions or delays in shipments caused by customs brokers or
government agencies;
- unexpected changes in regulatory requirements, tariffs, customs,
duties and other trade barriers;
- difficulties in staffing and managing foreign operations; and
- potentially adverse tax consequences resulting from changes in tax
laws.

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MANAGEMENT OF GROWTH -- WE FACE CHALLENGES AS WE INTEGRATE NEW AND DIVERSE
OPERATIONS AND TRY TO ATTRACT QUALIFIED EMPLOYEES TO SUPPORT OUR EXPANSION
PLANS.

We have experienced, and may continue to experience, growth in the scope and
complexity of our operations and in the number of our employees. This growth has
strained our managerial, financial, manufacturing and other resources. Future
acquisitions may result in inefficiencies as we integrate new operations and
manage geographically diverse operations.

In order to manage our growth, we must continue to implement additional
operating and financial systems and controls. For example, we currently are in
the process of implementing a new management enterprise resource planning
system. If we fail to successfully implement such systems and controls in a
timely and cost-effective manner as we grow, our business and financial
performance could be materially adversely affected.

Our success depends to a significant extent upon the continued service of our
key senior management and technical personnel, any of whom would be difficult to
replace. In addition, in connection with our expansion plans, we will be
required to increase the number of qualified engineers and other employees at
our existing factories, as well as factories we may acquire. Competition for
qualified employees is intense, and our business could be adversely affected by
the loss of the services of any of our existing key personnel. We cannot assure
you that we will continue to be successful in hiring and properly training
sufficient numbers of qualified personnel and in effectively managing our
growth. Our inability to attract, retain, motivate and train qualified new
personnel could have a material adverse effect on our business.

RISKS ASSOCIATED WITH OUR WAFER FABRICATION BUSINESS -- OUR WAFER FABRICATION
BUSINESS IS SUBSTANTIALLY DEPENDENT ON TEXAS INSTRUMENTS.

Our wafer fabrication business depends significantly upon Texas Instruments. An
agreement with ASI and Texas Instruments requires Texas Instruments to purchase
from us at least 40% of the capacity of ASI's wafer fabrication facility, and
under certain circumstances, Texas Instruments has the right to purchase from us
up to 70% of this capacity. From time to time, Texas Instruments has failed to
meet its minimum purchase obligations, and we cannot assure you that Texas
Instruments will meet its purchase obligations in the future. If Texas
Instruments fails to meet its purchase obligations, our company's and ASI's
businesses could be harmed. The capacity utilization of ASI's wafer foundry has
decreased significantly in 2001 as a result of the weakness in the semiconductor
industry. Texas Instruments as of the date of this filing was not meeting the
minimum purchase commitment and we along with ASI negotiated a resolution of the
shortfall with Texas Instruments to partially offset the decrease in demand.

Texas Instruments has transferred certain of its complementary metal oxide
silicon ("CMOS") process technology to ASI, and ASI is dependent upon Texas
Instruments' assistance for developing other state-of-the-art wafer
manufacturing processes. In addition, ASI's technology agreements with Texas
Instruments only cover 0.25 micron and 0.18 micron CMOS process technology.
Texas Instruments has not granted ASI a license under Texas Instruments' patents
to manufacture semiconductor wafers for third parties. Moreover, Texas
Instruments has no obligation to transfer any next-generation technology to ASI.
Our company's and ASI's businesses could be harmed if ASI cannot obtain new
technology on commercially reasonable terms or ASI's relationship with Texas
Instruments is disrupted for any reason.

DEPENDENCE ON MATERIALS AND EQUIPMENT SUPPLIERS -- OUR BUSINESS MAY SUFFER IF
THE COST OR SUPPLY OF MATERIALS OR EQUIPMENT CHANGES ADVERSELY.

We obtain from various vendors the materials and equipment required for the
packaging and test services performed by our factories. We source most of our
materials, including critical materials such as leadframes and laminate
substrates, from a limited group of suppliers. Furthermore, we purchase all of
our materials on a purchase order basis and have no long-term contracts with any
of our suppliers. Our business may be harmed if we cannot obtain materials and
other supplies from our vendors: (1) in a timely manner, (2) in sufficient
quantities, (3) in acceptable quality and (4) at competitive prices.

RAPID TECHNOLOGICAL CHANGE -- OUR BUSINESS WILL SUFFER IF WE CANNOT KEEP UP WITH
TECHNOLOGICAL ADVANCES IN OUR INDUSTRY.

The complexity and breadth of both semiconductor packaging and test services and
wafer fabrication are rapidly changing. As a result, we expect that we will need
to offer more advanced package designs and new wafer fabrication technology in
order to respond to competitive industry conditions and customer requirements.
Our success depends upon the ability of our company and ASI to develop and
implement new manufacturing processes and package design technologies. The need
to develop and maintain advanced packaging

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and wafer fabrication capabilities and equipment could require significant
research and development and capital expenditures in future years. In addition,
converting to new package designs or process methodologies could result in
delays in producing new package types or advanced wafer designs that could
adversely affect our ability to meet customer orders.

Technological advances also typically lead to rapid and significant price
erosion and may make our existing products less competitive or our existing
inventories obsolete. If we cannot achieve advances in package design and wafer
fabrication technology or obtain access to advanced package designs and wafer
fabrication technology developed by others, our business could suffer.

COMPETITION -- WE COMPETE AGAINST LARGE AND ESTABLISHED COMPETITORS IN BOTH THE
PACKAGING AND TEST BUSINESS AND THE WAFER FABRICATION BUSINESS.

The independent semiconductor packaging and test market is very competitive.
This sector is comprised of 13 principal companies. We face substantial
competition from established packaging and test service providers primarily
located in Asia, including companies with significant manufacturing capacity,
financial resources, research and development operations, marketing and other
capabilities. These companies also have established relationships with many
large semiconductor companies that are current or potential customers of our
company. On a larger scale, we also compete with the internal semiconductor
packaging and test capabilities of many of our customers.

The independent wafer fabrication business is also highly competitive. Our wafer
fabrication services compete primarily with independent semiconductor wafer
foundries, including those of Chartered Semiconductor Manufacturing, Inc.,
Taiwan Semiconductor Manufacturing Company, Ltd. and United Microelectronics
Corporation. Each of these companies has significant manufacturing capacity,
financial resources, research and development operations, marketing and other
capabilities and has been operating for some time. Many of these companies have
also established relationships with many large semiconductor companies that are
current or potential customers of our company. If we cannot compete successfully
in the future against existing or potential competitors, our operating results
would suffer.

ENVIRONMENTAL REGULATIONS -- FUTURE ENVIRONMENTAL REGULATIONS COULD PLACE
ADDITIONAL BURDENS ON OUR MANUFACTURING OPERATIONS.

The semiconductor packaging process uses chemicals and gases and generates
byproducts that are subject to extensive governmental regulations. For example,
we produce liquid waste when silicon wafers are diced into chips with the aid of
diamond saws, then cooled with running water. Federal, state and local
regulations in the United States, as well as environmental regulations
internationally, impose various controls on the storage, handling, discharge and
disposal of chemicals used in our manufacturing processes and on the factories
we occupy.

Increasingly, public attention has focused on the environmental impact of
semiconductor manufacturing operations and the risk to neighbors of chemical
releases from such operations. In the future, applicable land use and
environmental regulations may: (1) impose upon us the need for additional
capital equipment or other process requirements, (2) restrict our ability to
expand our operations, (3) subject us to liability or (4) cause us to curtail
our operations.

PROTECTION OF INTELLECTUAL PROPERTY -- WE MAY BECOME INVOLVED IN INTELLECTUAL
PROPERTY LITIGATION.

As of July 31, 2001, we held 103 U.S. patents, we had 234 pending patents and we
were preparing an additional 37 patent applications for filing. In addition to
the U.S. patents, we held 516 patents in foreign jurisdictions. We expect to
continue to file patent applications when appropriate to protect our proprietary
technologies, but we cannot assure you that we will receive patents from pending
or future applications. In addition, any patents we obtain may be challenged,
invalidated or circumvented and may not provide meaningful protection or other
commercial advantage to us.

We may need to enforce our patents or other intellectual property rights or to
defend our company against claimed infringement of the rights of others through
litigation, which could result in substantial cost and diversion of our
resources. If we fail to obtain necessary licenses or if we face litigation
relating to patent infringement or other intellectual property matters, our
business could suffer.

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Although we are not currently a party to any material litigation, the
semiconductor industry is characterized by frequent claims regarding patent and
other intellectual property rights. If any third party makes a valid claim
against us, we could be required to:

- discontinue the use of certain processes;
- cease the manufacture, use, import and sale of infringing products;
- pay substantial damages;
- develop non-infringing technologies; or
- acquire licenses to the technology we had allegedly infringed.

Our business, financial condition and results of operations could be materially
and adversely affected by any of these negative developments.

In addition, Texas Instruments has granted ASI very limited licenses under
certain technology agreements, including a license under Texas Instruments'
trade secret rights to use Texas Instruments' technology in connection with
ASI's provision of wafer fabrication services. However, Texas Instruments has
not granted ASI a license under Texas Instruments' patents to manufacture
semiconductor wafers for third parties. Furthermore, Texas Instruments has
reserved the right to bring infringement claims against our customers or
customers of ASI with respect to semiconductor wafers purchased from us or ASI.
Such customers and others could in turn subject us or ASI to litigation in
connection with the sale of semiconductor wafers produced by ASI.

CONTINUED CONTROL BY EXISTING STOCKHOLDERS -- MR. JAMES KIM AND MEMBERS OF HIS
FAMILY CAN DETERMINE THE OUTCOME OF ALL MATTERS REQUIRING STOCKHOLDER APPROVAL.

As of July 31, 2001, Mr. James Kim and members of his family beneficially owned
approximately 48% of our outstanding common stock. Mr. James Kim's family,
acting together, will substantially control all matters submitted for approval
by our stockholders. These matters could include:

- the election of all of the members of our Board of Directors;
- proxy contests;
- approvals of transactions between our company and ASI or other
entities in which Mr. James Kim and members of his family have an
interest, including transactions which may involve a conflict of
interest;
- mergers involving our company;
- tender offers; and
- open market purchase programs or other purchases of our common stock.

HIGH LEVERAGE AND RESTRICTIVE COVENANTS -- OUR SUBSTANTIAL INDEBTEDNESS COULD
MATERIALLY RESTRICT OUR OPERATIONS AND ADVERSELY AFFECT OUR FINANCIAL CONDITION.

We now have, and for the foreseeable future will have, a significant amount of
indebtedness. In addition, despite current debt levels, the terms of the
indentures governing our indebtedness do not prohibit us or our subsidiaries
from incurring substantially more debt. If new debt is added to our consolidated
debt level, the related risks that we now face could intensify.

- increase our vulnerability to general adverse economic and industry
conditions;
- limit our ability to fund future working capital, capital
expenditures, research and development and other general corporate
requirements;
- require us to dedicate a substantial portion of our cash flow from
operations to service payments on our debt;
- limit our flexibility to react to changes in our business and the
industry in which we operate;
- place us at a competitive disadvantage to any of our competitors that
have less debt; and
- limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional
funds.

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STOCK PRICE VOLATILITY

The trading price of our common stock has been and is likely to continue to be
highly volatile and could be subject to wide fluctuations in response to factors
such as:

- actual or anticipated quarter-to-quarter variations in operating
results;
- announcements of technological innovations or new products and
services by Amkor or our competitors;
- general conditions in the semiconductor industry;
- changes in earnings estimates or recommendations by analysts;
- developments affecting ASI; and
- or other events or factors, many of which are out of our control.

In addition, the stock market in general, and the Nasdaq National Market and the
markets for technology companies in particular, have experienced extreme price
and volume fluctuations. This volatility has affected the market prices of
securities of companies like ours for that have often been unrelated or
disproportionate to the operating performance. These broad market fluctuations
may adversely affect the market price of our common stock.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our company is exposed to market risks, primarily related to foreign
currency and interest rate fluctuations. In the normal course of business, we
employ established policies and procedures to manage the exposure to
fluctuations in foreign currency values and changes in interest rates.

Foreign Currency Risks

Our company's primary exposures to foreign currency fluctuations are
associated with transactions and related assets and liabilities denominated in
Philippine pesos, Korean won and Japanese yen. The objective in managing these
foreign currency exposures is to minimize the risk through minimizing the level
of activity and financial instruments denominated in pesos, won and yen.

At June 30, 2001, the peso-based financial instruments primarily consisted
of cash, non-trade receivables, deferred tax assets and liabilities, non-trade
payables, accrued payroll, taxes and other expenses. Based on the portfolio of
peso-based assets and liabilities at June 30, 2001, a 20% increase in the
Philippine peso to U.S. dollar exchange rate would result in a decrease of
approximately $3.5 million, in peso-based net assets.

At June 30, 2001, the won-based financial instruments primarily consisted
of cash, non-trade receivables, non-trade payables, accrued payroll, taxes and
other expenses. Based on the portfolio of won-based assets and liabilities at
June 30, 2001, a 20% increase in the Korean won to U.S. dollar exchange rate
would result in a decrease of approximately $3.5 million, in won-based net
assets.

At June 30, 2001, the yen-based financial instruments primarily consisted
of cash, non-trade receivables, accrued payroll taxes, debt and other expenses.
Based on the portfolio of yen-based assets and liabilities at June 30, 2001, a
20% decrease in the Japanese yen to U.S. dollar exchange rate would result in an
increase of approximately $13.1 million, in yen-based net liabilities.

Interest Rate Risks

Our company has interest rate risk with respect to our long-term debt. As
of June 30, 2001, we had a total of $1,906.5 million debt of which 87.6% was
fixed rate debt and 12.4% was variable rate debt. Our variable rate debt
principally consisted of short-term borrowings and amounts outstanding under our
secured bank facilities that included term loans and a $200.0 million revolving
line of credit of which no amounts were drawn as of June 30, 2001. The fixed
rate debt consisted of senior notes, senior subordinated notes, convertible
subordinated notes and foreign debt. Changes in interest rates have different
impacts on our fixed and variable rate portions of our debt portfolio. A change
in interest rates on the fixed portion of the debt portfolio impacts the fair
value of the instrument but has no impact on interest incurred or cash flows. A
change in interest rates on the variable portion of the debt portfolio impacts
the interest incurred and cash flows but does not impact the fair value of the
instrument. The fair value of the convertible subordinated notes is also
impacted by the market price of our common stock.

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The table below presents the interest rates, maturities and fair value of
our fixed and variable rate debt as of June 30, 2001.

YEAR ENDING DECEMBER 31,
---------------------------------------------------------------------------
2001 2002 2003 2004 2005
------------- ------------ ------------- ------------- -------------

Long-term debt:
Fixed rate debt $ 6,842 $ 14,103 $ 15,224 -- --
Average interest rate 4.0% 4.0% 4.0%

Variable rate debt $ 14,527 $ 3,500 $ 3,556 $ 106,676 $ 108,313
Average interest rate 1.7% 7.0% 7.1% 7.0% 7.0%

FAIR
THEREAFTER TOTAL VALUE
------------- ------------- -------------
Long-term debt:

Fixed rate debt $ 1,633,750 $ 1,669,919 $ 1,545,892
Average interest rate 8.2% 8.1%

Variable rate debt -- $ 236,572 $ 236,572
Average interest rate 6.7%

Equity Price Risks

Our outstanding 5.75% convertible subordinated notes due 2006 and 5%
convertible subordinated notes due 2007 are convertible into common stock at
$35.00 per share and $57.34 per share, respectively. We intend to repay our
convertible subordinated notes upon maturity, unless converted. If investors
were to decide to convert their notes to common stock, our future earnings would
benefit from a reduction in interest expense. If we induced such conversion, our
earnings could include an additional charge.

PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On May 18, 2001, we issued $250.0 million of principal of 5.75%
convertible subordinated notes due 2006 (the "Notes") to a group of initial
purchasers. The Notes were issued in reliance on Rule 144A promulgated under the
Securities Act of 1933, as amended. The Notes are convertible into our common
stock at the option of the holder at any time prior to maturity at a conversion
price of $35.00 per share. The Notes are subordinated in right of payment to all
of our existing and future senior debt. We used $122.0 million of the $243.0
million of the net proceeds of the offering to repay amounts outstanding under
the Term B loans of our secured bank facility, and the balance of the net
proceeds was available to be used for general corporate and working capital
purposes.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

At Amkor Technology, Inc.'s Annual Meeting of Stockholders held on June
25, 2001 the following proposals were adopted by the margins indicated.

1. To elect a Board of Directors to hold office until the next Annual Meeting
of Stockholders or until their respective successors have been elected or
appointed.

NUMBER OF SHARES
VOTED FOR WITHHELD
--------- --------

James J. Kim........................................... 132,890,911 2,066,835
John N. Boruch......................................... 132,885,662 2,072,084
Winston J. Churchill................................... 134,885,362 72,384
Thomas D. George....................................... 134,885,512 72,234
George K. Hinckley..................................... 134,885,222 72,524
Juergen Knorr.......................................... 134,881,836 75,910
John B. Neff........................................... 134,882,106 75,640

2. To ratify the appointment of the accounting firm of PricewaterhouseCoopers
LLP as independent auditors for the company for the current year. Votes
totaled 134,910,733 for, 21,679 against and 25,334 abstain.

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are filed as part of this report:

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
4.1 Convertible Subordinated Notes Indenture dated as of May 25, 2001
between the Registrant and State Street Bank and Trust Company, as
trustee, including the form of the 5.75% Convertible Subordinated Notes
due 2006.

4.2 Registration Rights Agreement between the Registrant and Initial
Purchasers named therein dated as of May 25, 2001.

4.3 Amended and restated credit agreement dated as of March 30, 2001
between the Registrant and the Initial Lenders and Initial Issuing
Banks and Salomon Smith Barney Inc., Citicorp USA, Inc. and Deutsche
Banc Alex. Brown, Inc.

4.4 Amendment No. 1 to the Amended and restated credit agreement dated as
of March 30, 2001 between the Registrant and the Initial Lenders and
Initial Issuing Banks and Salomon Smith Barney Inc., Citicorp USA, Inc.
and Deutsche Banc Alex. Brown, Inc.

12.1 Computation of Ratio of Earnings to Fixed Charges

(b) REPORTS ON FORM 8-K

We filed with the Securities and Exchange Commission the following reports
on Form 8-K during the quarterly period ended June 30, 2001:

Current Report on Form 8-K dated March 30, 2001 (filed April 2, 2001)
related to the consolidated financial statements of Anam Semiconductor, Inc. and
its subsidiaries as of and for each of the three years ended December 31, 2000
filed pursuant to rule 3-09 of Regulation S-X

Current Report on Form 8-K dated April 26, 2001 (filed May 3, 2001) related
to a press release dated April 26, 2001 announcing our financial results for the
first quarter ended March 31, 2001.

Current Report on Form 8-K dated May 11, 2001 (filed May 11, 2001) related
to a press release dated May 11, 2001 announcing our intent to redeem all of our
company's 5.75% convertible subordinated notes due 2003.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.

AMKOR TECHNOLOGY, INC.

By: /s/ KENNETH T. JOYCE
___________________________________
Kenneth T. Joyce
Chief Financial Officer
(Principal Financial, Chief
Accounting Officer and Duly
Authorized Officer)

Date: August 14, 2001