CHANDLER, Ariz.—(BUSINESS WIRE)—April 26, 2006— Amkor Technology, Inc. (Nasdaq: AMKR) reported record first quarter 2006 sales of $645 million, up 55% from the first quarter of 2005 and up slightly from the fourth quarter of 2005. Amkor's first quarter 2006 net income was $36 million, or $0.20 per diluted share. For the first quarter of 2005 Amkor's net loss was $119 million, or ($0.68) per share, and included a provision for legal settlements of $50 million, or ($0.28) per share.

"I am pleased with our results this quarter and believe that the firm business conditions in Q1 have created a platform for Amkor to achieve measured, profitable growth in 2006," said James Kim, Amkor's Chairman and Chief Executive Officer. "We expect that tight supply throughout the semiconductor industry, coupled with what we see as more disciplined behavior toward capacity expansion, will restrain upside production and dampen the amplitude of industry cyclicality. We believe a less volatile business environment will better enable Amkor to enrich our product mix, improve asset productivity, and increase profitability and cash flow."

"During the first quarter we saw seasonally robust demand across a broad range of end markets, with upsides for advanced packages, such as MicroLeadFrame(R), System-in-Package and 3D packages for wireless communications and consumer applications," said Kim. "Our strategic alliance with IBM continues to develop very well."

"In February we announced a strategic expansion of our electroplated wafer bumping operations in collaboration with Chartered Semiconductor Manufacturing and other customers who operate in Singapore," said Kim. "This initiative recognizes the increased adoption of flip chip packaging and the leadership position in wafer bumping technology we have gained through our Unitive subsidiary. In conjunction with our existing test operations in Singapore, Amkor will provide turnkey wafer bump and wafer probe services for leading edge applications on 300mm wafers at advanced process nodes. We believe there is strong market demand for our advanced bump and probe capabilities, and expect our wafer bumping production build-out to be largely supported by long-term supply agreements."

"First quarter sales of $645 million and gross margin of 24% exceeded our guidance as customer demand remained firm during what is typically a seasonally slow period," said Ken Joyce, Amkor's Chief Financial Officer. "We are benefiting from a focused effort on optimizing our asset allocation, improving labor and asset productivity, disciplined capacity expansion and enriching our product mix."

"First quarter gross profit includes a $4 million impairment charge primarily related to our decision to close down a camera module production line in Korea, where we have not achieved targeted returns and associated cash flows," said Joyce.

"First quarter SG&A expenses were higher than previously planned, principally attributable to greater than anticipated professional fees and increased IT-related expenses," said Joyce. "In light of stronger business conditions, we have decided to invest a portion of our increased earnings to enhance our worldwide IT systems capabilities. We are moving forward with a broad-based ERP implementation designed to ensure that Amkor has the systems infrastructure necessary to accommodate planned growth while managing an increasingly complex supply chain."

"Over the past several quarters we have realized more than $16 million in annual payroll and associated benefits savings, and we continue to move forward with programs to enhance operational effectiveness and reduce costs. However, in light of the planned ERP implementation and the ramp up of our new facilities in China and Singapore, we currently anticipate that our year-over-year SG&A savings, previously estimated at $25 to $30 million, will be closer to $15 million," said Joyce. "We are committed to achieving meaningful SG&A savings during 2006; the ultimate amount of these savings will depend on overall business conditions."

"First quarter capital additions totaled $103 million. We continue to budget full year 2006 capital additions of $300 million, which includes approximately $50 million for facilities, including our new factories in China and Singapore. In addition, we expect to undertake a modest amount of further capacity expansion that would be funded by customers under long-term supply agreements."

"During the first quarter we generated $39 million in free cash flow, of which $30 million was used to effect open market purchases of our 9.25% senior notes due February 2008," said Joyce. "We plan to retire the outstanding balance of $132 million in 5.75% convertible notes due June 1, 2006, and based on current forecasts believe we will have sufficient liquidity available to satisfy the $146 million of 5% convertible notes due March 2007. We are currently evaluating debt and equity-linked financing alternatives to refinance a portion of our intermediate-term maturities and expect to consummate one or more refinancing transactions during the second quarter, depending on market conditions."

For the remainder of 2006, we anticipate an effective tax rate of 7.5% which reflects the utilization of U.S. and foreign net operating loss carryforwards and tax holidays in certain of our foreign jurisdictions. At March 31, 2006, Amkor had U.S. net operating losses available for carryforward totaling $357 million expiring through 2025. Additionally, at March 31, 2006, we had $85 million of non-U.S. operating losses available for carryforward, expiring through 2011.

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

Business Outlook

The business environment remains encouraging. Compared with the fourth quarter, our first quarter sales were up slightly, when it is typically down 5% to 10%. Our customers' forecasts suggest modest growth in the second quarter, with continued growth in the third quarter. On the basis of current customer forecasts, we have the following expectations for the second quarter of 2006:

-- Sales in the range of 2% to 4% above the first quarter of 2006

-- Gross margin in the range of 25% to 26%

-- Net income in the range of $0.24 to $0.28 per diluted share

Amkor will conduct a conference call on April 26, 2006 at 5:00 p.m. eastern time. The call can be accessed by dialing 303-262-2175 or by visiting the investor relations page of our web site: www.amkor.com or CCBN's website, www.companyboardroom.com. An archive of the webcast can be accessed through the same links and will be available until our next quarterly earnings conference call. An audio replay of the call will be available for 48 hours following the conference call by dialing 303-590-3000 passcode: 11053998.

About Amkor

Amkor is a leading provider of advanced semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronic design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's web site: www.amkor.com.

Forward-Looking Statement Disclaimer

This press release contains forward-looking statements within the meaning of federal securities laws, including, without limitation, statements regarding the following: achieving measured, profitable expansion in 2006; the continued growth of our relationship with IBM; long-term supply agreements to support our planned build-out of wafer bumping production; plans to move forward with a large-scale ERP implementation; plans to enhance operational effectiveness and reduce costs, including anticipated SG&A savings in 2006; budgeted capital expenditures for 2006; plans to retire the outstanding convertible notes due June 1, 2006 at maturity; having sufficient liquidity to satisfy the $146 million of 5% convertible notes due March 2007; plans to consummate one or more refinancing transactions during the second quarter, subject to market conditions; and the statements contained under Business Outlook. These forward-looking statements are subject to a number of risks and uncertainties that could affect future results and cause actual results and events to differ materially from historical and expected results, including, but not limited to, the following: the ability to access the capital markets and consummate one or more refinancing transactions; the highly unpredictable nature of the semiconductor industry; volatility of consumer demand for products incorporating our semiconductor packages; weakness in the forecasts of Amkor's customers; customer modification of and follow through with respect to forecasts provided to Amkor; deterioration of the U.S. or other economies; the highly unpredictable nature of litigation and the risk of adverse results of litigation against us; our relationship with IBM; the satisfaction of conditions in the agreements entered into in connection with the IBM transaction; the incurrence of significant additional cost and expense necessary for the increase in Amkor's capacity; our ability to achieve anticipated SG&A savings in 2006; worldwide economic effects of terrorist attacks and military conflict; competitive pricing and declines in average selling prices; timing and volume of orders relative to the production capacity; fluctuations in manufacturing yields; competition; dependence on international operations and sales; dependence on raw material and equipment suppliers; exchange rate fluctuations; dependence on key personnel; the effect on operations of our realignment of management; difficulties in managing growth; enforcement of intellectual property rights; environmental regulations; and technological challenges.

Further information on risk factors that could affect the outcome of the events set forth in these statements and that could affect the company's operating results and financial condition is detailed in the company's filings with the Securities and Exchange Commission, including Form 10-K for the year ended December 31, 2005, and current reports on Form 8-K. Amkor undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this document.