Table of Contents
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q

 	 	 	
þ	 	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934	
 	 	For the Quarterly Period Ended September 30, 2007	
or	

o	 	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934	
 	 	For the transition period from to	
 
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)	

1900 South Price Road
Chandler, AZ 85286
(480) 821-5000
(Address of principal executive offices and zip code)
 
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  þ      No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b 2 of the Exchange Act).  Yes  o      No  þ
 
The number of outstanding shares of the registrant’s Common Stock as of October 31, 2007 was 181,774,586.

 
 
QUARTERLY REPORT ON FORM 10-Q
September 30, 2007
 
TABLE OF CONTENTS

 	 	 	 	Page
	
 	 	 	 	No.	
 	 	 	 	 	 	 	 	 	
PART I. Financial Information	
 	Item 1.	 	 	Financial Statements (unaudited)	 	 	2	 	
 	 	 	 	Consolidated Statements of Income — Three and Nine Months Ended September 30, 2007 and 2006	 	 	2	 	
 	 	 	 	Consolidated Balance Sheets — September 30, 2007 and December 31, 2006	 	 	3	 	
 	 	 	 	Condensed Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2007 and 2006	 	 	4	 	
 	 	 	 	Notes to Consolidated Financial Statements	 	 	5	 	
 	Item 2.	 	 	Management’s Discussion and Analysis of Financial Condition and Results of Operations	 	 	25	 	
 	Item 3.	 	 	Quantitative and Qualitative Disclosures About Market Risk	 	 	34	 	
 	Item 4.	 	 	Controls and Procedures	 	 	35	 	
 	
PART II. Other Information	
 	Item 1.	 	 	Legal Proceedings	 	 	36	 	
 	Item 1A.	 	 	Risk Factors	 	 	36	 	
 	Item 4.	 	 	Submission of Matters to a Vote of Security Holders	 	 	48	 	
 	Item 5.	 	 	Other Information	 	 	49	 	
 	Item 6.	 	 	Exhibits	 	 	51	 	
Signatures	 	 	52	 	
 EX-3.1	
 EX-12.1	
 EX-31.1	
 EX-31.2	
 EX-32	

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PART I. FINANCIAL INFORMATION

Item 1.  	Financial Statements	
 
AMKOR TECHNOLOGY, INC.
 
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

 	 	For the Three Months
	 	 	For the Nine Months
	 	
 	 	Ended September 30,	 	 	Ended September 30,	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 	 	(In thousands, except per share data)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	689,083	 	 	$	713,829	 	 	$	1,992,557	 	 	$	2,045,549	 	
Cost of sales	 	 	519,152	 	 	 	536,062	 	 	 	1,513,596	 	 	 	1,543,721	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	169,931	 	 	 	177,767	 	 	 	478,961	 	 	 	501,828	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative	 	 	64,080	 	 	 	68,477	 	 	 	189,107	 	 	 	188,648	 	
Research and development	 	 	10,282	 	 	 	9,653	 	 	 	30,930	 	 	 	29,398	 	
Gain on sale of specialty test operations	 	 	(1,717	)	 	 	—	 	 	 	(1,717	)	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	72,645	 	 	 	78,130	 	 	 	218,320	 	 	 	218,046	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	 	97,286	 	 	 	99,637	 	 	 	260,641	 	 	 	283,782	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other (income) expense:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net	 	 	29,336	 	 	 	36,573	 	 	 	95,610	 	 	 	118,330	 	
Interest expense, related party	 	 	1,563	 	 	 	1,563	 	 	 	4,688	 	 	 	4,914	 	
Foreign currency loss	 	 	3,399	 	 	 	6,465	 	 	 	7,946	 	 	 	11,472	 	
Debt retirement costs	 	 	—	 	 	 	—	 	 	 	15,875	 	 	 	27,389	 	
Other (income) expense	 	 	254	 	 	 	(878	)	 	 	(964	)	 	 	1,497	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other expense, net	 	 	34,552	 	 	 	43,723	 	 	 	123,155	 	 	 	163,602	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes and minority interests	 	 	62,734	 	 	 	55,914	 	 	 	137,486	 	 	 	120,180	 	
Income tax expense	 	 	1,194	 	 	 	2,881	 	 	 	9,573	 	 	 	8,465	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before minority interests	 	 	61,540	 	 	 	53,033	 	 	 	127,913	 	 	 	111,715	 	
Minority interests, net of tax	 	 	(920	)	 	 	(223	)	 	 	(1,713	)	 	 	(678	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	60,620	 	 	$	52,810	 	 	$	126,200	 	 	$	111,037	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$	0.33	 	 	$	0.30	 	 	$	0.70	 	 	$	0.63	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted	 	$	0.30	 	 	$	0.27	 	 	$	0.65	 	 	$	0.60	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Shares used in computing net income per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	181,664	 	 	 	178,108	 	 	 	180,200	 	 	 	177,537	 	
Diluted	 	 	209,868	 	 	 	204,482	 	 	 	208,812	 	 	 	197,539	 	
 
The accompanying notes are an integral part of these statements.
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AMKOR TECHNOLOGY, INC.
 
CONSOLIDATED BALANCE SHEETS
(Unaudited)

 	 	September 30,
	 	 	December 31,
	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
ASSETS	
Current assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	334,955	 	 	$	244,694	 	
Restricted cash	 	 	2,576	 	 	 	2,478	 	
Accounts receivable:	 	 	 	 	 	 	 	 	
Trade, net of allowances	 	 	385,396	 	 	 	380,888	 	
Other	 	 	5,568	 	 	 	5,969	 	
Inventories, net	 	 	150,052	 	 	 	164,178	 	
Other current assets	 	 	38,051	 	 	 	39,650	 	
 	 	 	 	 	 	 	 	 	
Total current assets	 	 	916,598	 	 	 	837,857	 	
Property, plant and equipment, net	 	 	1,425,769	 	 	 	1,443,603	 	
Goodwill	 	 	672,654	 	 	 	671,900	 	
Intangibles, net	 	 	22,443	 	 	 	29,694	 	
Investments	 	 	5,318	 	 	 	6,675	 	
Restricted cash	 	 	1,703	 	 	 	1,688	 	
Other assets	 	 	48,495	 	 	 	49,847	 	
 	 	 	 	 	 	 	 	 	
Total assets	 	$	3,092,980	 	 	$	3,041,264	 	

LIABILITIES AND STOCKHOLDERS’ EQUITY	
Current liabilities:	 	 	 	 	 	 	 	 	
Short-term borrowings and current portion of long-term debt	 	$	161,918	 	 	$	185,414	 	
Trade accounts payable	 	 	320,585	 	 	 	291,847	 	
Accrued expenses	 	 	163,639	 	 	 	145,501	 	
 	 	 	 	 	 	 	 	 	
Total current liabilities	 	 	646,142	 	 	 	622,762	 	
Long-term debt	 	 	1,541,528	 	 	 	1,719,901	 	
Long-term debt, related party	 	 	100,000	 	 	 	100,000	 	
Pension and severance obligations	 	 	206,008	 	 	 	170,070	 	
Other non-current liabilities	 	 	33,718	 	 	 	30,008	 	
 	 	 	 	 	 	 	 	 	
Total liabilities	 	 	2,527,396	 	 	 	2,642,741	 	
 	 	 	 	 	 	 	 	 	
Commitments and contingencies (see Note 14)	 	 	 	 	 	 	 	 	
Minority interests	 	 	6,282	 	 	 	4,603	 	
 	 	 	 	 	 	 	 	 	
Stockholders’ equity:	 	 	 	 	 	 	 	 	
Preferred stock, $0.001 par value, 10,000 shares authorized, designated Series A, none issued	 	 	—	 	 	 	—	 	
Common stock, $0.001 par value, 500,000 shares authorized, issued and outstanding of 181,720 in 2007 and 178,109 in 2006	 	 	182	 	 	 	178	 	
Additional paid-in capital	 	 	1,480,401	 	 	 	1,441,194	 	
Accumulated deficit	 	 	(915,190	)	 	 	(1,041,390	)	
Accumulated other comprehensive loss	 	 	(6,091	)	 	 	(6,062	)	
 	 	 	 	 	 	 	 	 	
Total stockholders’ equity	 	 	559,302	 	 	 	393,920	 	
 	 	 	 	 	 	 	 	 	
Total liabilities and stockholders’ equity	 	$	3,092,980	 	 	$	3,041,264	 	

The accompanying notes are an integral part of these statements.
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AMKOR TECHNOLOGY, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 	 	September 30,	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	
Net income	 	$	126,200	 	 	$	111,037	 	
Depreciation and amortization	 	 	215,679	 	 	 	203,065	 	
Debt retirement costs	 	 	6,875	 	 	 	27,389	 	
Other operating activities and non-cash items	 	 	8,769	 	 	 	29,492	 	
Changes in assets and liabilities	 	 	56,945	 	 	 	9,673	 	
 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities	 	 	414,468	 	 	 	380,656	 	
 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Payments for property, plant and equipment	 	 	(159,942	)	 	 	(252,401	)	
Proceeds from the sale of property, plant and equipment	 	 	5,130	 	 	 	2,524	 	
Other investing activities	 	 	(1,778	)	 	 	(2,578	)	
 	 	 	 	 	 	 	 	 	
Net cash used in investing activities	 	 	(156,590	)	 	 	(252,455	)	
 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Borrowings under revolving credit facilities	 	 	80,340	 	 	 	143,659	 	
Payments under revolving credit facilities	 	 	(95,398	)	 	 	(134,419	)	
Proceeds from issuance of long-term debt	 	 	300,000	 	 	 	590,000	 	
Payments for debt issuance costs	 	 	(3,441	)	 	 	(15,087	)	
Payments of long-term debt	 	 	(486,888	)	 	 	(734,861	)	
Proceeds from issuance of stock through stock compensation plans	 	 	36,380	 	 	 	4,981	 	
 	 	 	 	 	 	 	 	 	
Net cash used in financing activities	 	 	(169,007	)	 	 	(145,727	)	
 	 	 	 	 	 	 	 	 	
Effect of exchange rate fluctuations on cash and cash equivalents	 	 	1,390	 	 	 	1,518	 	
 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	 	 	90,261	 	 	 	(16,008	)	
Cash and cash equivalents, beginning of period	 	 	244,694	 	 	 	206,575	 	
 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	 	$	334,955	 	 	$	190,567	 	
 	 	 	 	 	 	 	 	 	
Cash paid during the period for:	 	 	 	 	 	 	 	 	
Interest	 	$	89,810	 	 	$	121,078	 	
Income taxes	 	$	10,523	 	 	$	6,123	 	
Non cash investing and financing activities:	 	 	 	 	 	 	 	 	
Application of deposit upon closing of acquisition of minority interest	 	$	—	 	 	$	17,822	 	
 
The accompanying notes are an integral part of these statements.
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.  	Interim Financial Statements	
 
Basis of Presentation.  The Consolidated Financial Statements and related disclosures as of September 30, 2007 and for the three and nine months ended September 30, 2007 and 2006 are unaudited, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The December 31, 2006 Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S.”). 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 statement of the results for the interim periods. These financial statements should be read in conjunction with the financial statements included in our latest annual report for the year ended December 31, 2006 filed on Form 10-K with the SEC on February 26, 2007. The results of operations for the three and nine months ended September 30, 2007 are not necessarily indicative of the results to be expected for the full year.
 
Use of Estimates.  The Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the U.S., using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments.
 
New Accounting Standards
 
Recently Adopted Standards
 
In February 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 155,  Accounting for Certain Hybrid Financial Instruments  (“SFAS No. 155”), which amends SFAS No. 133,  Accounting for Derivative Instruments and Hedging Activities  (“SFAS No. 133”) and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (“SFAS No. 140”). SFAS No. 155 simplifies the accounting for certain derivatives embedded in other financial instruments by allowing them to be accounted for as a whole if the holder elects to account for the whole instrument on a fair value basis. SFAS No. 155 also clarifies and amends certain other provisions of SFAS No. 133 and SFAS No. 140. SFAS No. 155 is effective for all financial instruments acquired, issued or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006. We adopted the provisions of SFAS No. 155 on January 1, 2007. The adoption of this statement did not have an impact on our financial statements and disclosures.
 
In June 2006, the FASB ratified Emerging Issues Task Force (“EITF”) Issue No. 06-03, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross Versus Net Presentation)  (“Issue No. 06-03”). Under Issue No. 06-03, a company must disclose its accounting policy regarding the gross or net presentation of certain taxes. If taxes included in gross revenues are significant, a company must disclose the amount of such taxes for each period for which an income statement is presented (i.e., both interim and annual periods). Taxes within the scope of this Issue are those that are imposed on and concurrent with a specific revenue-producing transaction. Taxes assessed on an entity’s activities over a period of time, such as gross receipts taxes, are not within the scope of the issue. Issue No. 06-03 is effective for the first annual or interim reporting period beginning after December 15, 2006. We adopted the provisions of EITF Issue No. 06-03 on January 1, 2007. We present applicable taxes on a net basis in our consolidated financial statements. The adoption of Issue No. 06-03 did not have an impact on our financial statements and disclosures.
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), which clarifies the accounting and disclosure for uncertainty in income tax positions, as defined. FIN 48 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. FIN 48 requires that we recognize in our consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 also provide guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosures. This interpretation is effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to the opening balance of retained earnings. We adopted the provisions of FIN 48 on January 1, 2007. The adoption of FIN 48 did not have an impact on the opening balance of retained earnings. See Note 4 for more information.
 
In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans an amendment of SFAS Statement No. 87, Employers’ Accounting for Pensions, SFAS No. 88, Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and Termination Benefits, SFAS No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, and SFAS No. 132(R), Employers’ Disclosure about Pensions and Other Postretirement Benefits (“SFAS No. 158”). SFAS No. 158 requires the recognition of the funded status of a defined benefit pension plan (other than a multi-employer plan) as an asset or liability in the statement of financial position and the recognition of changes in the funded status through comprehensive income in the year in which such changes occur. We adopted the recognition provisions of SFAS No. 158 and initially applied those to the funded status of our defined benefit pension plans as of December 31, 2006. The initial recognition of the funded status of our defined benefit pension plans resulted in a decrease in stockholders’ equity of $11.8 million, which was net of a tax benefit of $0.8 million.
 
SFAS No. 158 also requires that the funded status of a plan be measured as of the date of the year-end statement of financial position effective for fiscal years ending after December 15, 2008. We currently measure our funded status as of the balance sheet date. Accordingly, the adoption of the measurement provisions of SFAS No. 158 will have no impact on our financial statements.
 
Recently Issued Standards
 
The FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), which provides guidance for using fair value to measure assets and liabilities. The standard also responds to investors’ requests for more information about (1) the extent to which companies measure assets and liabilities at fair value, (2) the information used to measure fair value, and (3) the effect that fair value measurements have on earnings. SFAS No. 157 will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value to any new circumstances. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are currently evaluating the impact of this standard on our financial statements and disclosures.
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  (“SFAS No. 159”). SFAS No. 159 provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in financial reporting that can occur when related assets and liabilities are recorded on different bases. SFAS No. 159 also amends SFAS No. 115,  Accounting for Certain Investments in Debt and Equity Securities,”  by providing the option to record unrealized gains and losses on held-for-sale and held-to-maturity securities currently. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are currently evaluating the impact of this standard on our financial statements and disclosures.

2.  	Stock Compensation Plans	
 
We account for our stock option plans in accordance with SFAS No. 123(R), Share-Based Payments (“SFAS No. 123(R)”). SFAS No. 123(R) requires that all share-based payments to employees, including grants
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
of employee stock options, be measured at fair value and expensed over the service period (generally the vesting period).
 
The following table presents stock-based employee compensation expense included in the Consolidated Statements of Income:

 	 	For the Three
	 	 	For the Nine
	 	
 	 	Months Ended
	 	 	Months Ended
	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	$	332	 	 	$	923	 	 	$	1,013	 	 	$	1,561	 	
Selling, general, and administrative	 	 	667	 	 	 	293	 	 	 	1,817	 	 	 	1,952	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock-based compensation expense	 	$	999	 	 	$	1,216	 	 	$	2,830	 	 	$	3,513	 	

Stock Option Plans.  Substantially all of the options granted are generally exercisable pursuant to a two, three or four-year vesting schedule and the term of the options granted is no longer than ten years. On August 6, 2007, the shareholders approved a new stock plan (“2007 Equity Incentive Plan”) that provides for the grant of the following types of incentive awards: (i) stock options, (ii) restricted stock, (iii) restricted stock units, (iv) stock appreciation rights, (v) performance units and performance shares, and (vi) other stock or cash awards. The effective date of this plan is January 1, 2008 and there are 17,000,000 shares of our common stock reserved for issuance under the 2007 Equity Incentive Plan.
 
A summary of the current stock option plans and the respective plan termination dates and shares available for grant as of September 30, 2007 is shown below.

 	 	1998 Director
	 	1998 Stock
	 	2003 Inducement
	
Stock Option Plans	 	Option Plan	 	Plan	 	Plan	
 	 	 	 	 	 	 	
Contractual Life (yrs)	 	10	 	10	 	10	
Plan termination date	 	January 2008	 	January 2008	 	Board of Directors Discretion	
Shares available for grant at September 30, 2007	 	71,666	 	7,342,211	 	380,000	
 
In order to calculate the fair value of stock options at the date of grant, we used the Black-Scholes option pricing model. Expected volatilities are weighted based on the historical performance of our stock. We also use historical data to estimate the timing and amount of option exercises and forfeitures within the valuation model. The expected term of the options is based on evaluations of historical and expected future employee exercise behavior and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
 
The following assumptions were used to calculate weighted average fair values of the options granted for the three and nine months ended September 30, 2007 and 2006:

 	 	For the Three Months Ended
	 	 	For the Nine Months Ended
	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expected life (in years)	 	 	5	 	 	 	5.8	 	 	 	5	 	 	 	5.8	 	
Risk-free interest rate	 	 	4.6	%	 	 	4.9	%	 	 	4.6	%	 	 	4.6	%	
Volatility	 	 	74	%	 	 	86	%	 	 	74	%	 	 	78	%	
Dividend yield	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Weighted average grant date fair value per option granted	 	$	6.91	 	 	$	4.35	 	 	$	6.91	 	 	$	4.82	 	

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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The intrinsic value of options exercised for the three and nine months ended September 30, 2007 was $1.2 million and $12.0 million, respectively. The intrinsic value of options exercised for the three and nine months ended September 30, 2006 was less than $0.1 million and $1.5 million, respectively.
 
The following is a summary of all option activity for the nine months ended September 30, 2007:

 	 	 	 	 	 	 	 	Weighted Average
	 	 	 	 	
 	 	 	 	 	Weighted Average
	 	 	Remaining
	 	 	Aggregate
	 	
 	 	Number of
	 	 	Exercise Price
	 	 	Contractual Term
	 	 	Intrinsic
	 	
 	 	Shares	 	 	per Share	 	 	(Years)	 	 	Value	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Outstanding at December 31, 2006	 	 	15,334,089	 	 	$	10.47	 	 	 	 	 	 	 	 	 	
Granted	 	 	170,000	 	 	 	11.01	 	 	 	 	 	 	 	 	 	
Exercised	 	 	(3,611,361	)	 	 	10.07	 	 	 	 	 	 	 	 	 	
Forfeited or expired	 	 	(733,521	)	 	 	12.36	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Outstanding at September 30, 2007	 	 	11,159,207	 	 	 	10.50	 	 	 	4.77	 	 	$	20,484,540	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exercisable at September 30, 2007	 	 	9,547,385	 	 	 	11.18	 	 	 	4.23	 	 	$	12,331,965	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fully vested and expected to vest at September 30, 2007	 	 	10,945,315	 	 	 	10.58	 	 	 	4.71	 	 	$	19,380,645	 	

Total unrecognized compensation expense from stock options, excluding any forfeiture estimate, was $5.0 million as of September 30, 2007, which is expected to be recognized over a weighted-average period of 1.05 years beginning October 1, 2007.
 
For the nine months ended September 30, 2007 and 2006, cash received from option exercises under all share-based payment arrangements was $36.4 million and $5.0 million, respectively. There was no tax benefit realized. The related cash receipts are included in financing activities in the accompanying Condensed Consolidated Statements of Cash Flows.

3.  	Comprehensive Income	
 
The components of comprehensive income are summarized below:

 	 	For the Three
	 	 	For the Nine
	 	
 	 	Months Ended
	 	 	Months Ended
	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	60,620	 	 	$	52,810	 	 	$	126,200	 	 	$	111,037	 	
Unrealized gain (loss) on investments, net of tax	 	 	—	 	 	 	2,018	 	 	 	(1,004	)	 	 	(553	)	
Reclassification adjustment for losses included in net income	 	 	44	 	 	 	—	 	 	 	44	 	 	 	2,624	 	
Change in unrecognized pension costs, net of tax	 	 	129	 	 	 	—	 	 	 	380	 	 	 	—	 	
Foreign currency translation adjustment	 	 	2,216	 	 	 	(1,166	)	 	 	551	 	 	 	1,064	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income	 	$	63,009	 	 	$	53,662	 	 	$	126,171	 	 	$	114,172	 	

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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The components of accumulated other comprehensive loss consisted of the following:

 	 	September 30,
	 	 	December 31,
	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Unrealized gains (losses) on securities	 	$	—	 	 	$	960	 	
Unrecognized pension costs	 	 	(11,455	)	 	 	(11,835	)	
Cumulative unrealized foreign currency translation gains	 	 	5,364	 	 	 	4,813	 	
 	 	 	 	 	 	 	 	 	
Total accumulated other comprehensive loss	 	$	(6,091	)	 	$	(6,062	)	

 	 	
4.  	Income Taxes	
 
We operate in and file income tax returns in various U.S. and foreign jurisdictions that are subject to examination by tax authorities. Our estimated tax liability is subject to change as examinations of our tax returns are completed by the tax authorities in the respective jurisdictions. We believe that any additional taxes or related interest over the amounts accrued will not have a material effect on our financial condition, results of operations or cash flows, nor do we expect that such examinations will result in a material favorable impact. However, resolution of these matters involves uncertainties and there are no assurances that the outcome will be favorable.
 
Income tax expense for the three and nine months ended September 30, 2007 and 2006 is attributable to foreign withholding taxes and income taxes at certain of our profitable foreign operations. Our effective tax rate of 7.0% for the nine months ended September 30, 2007 reflects the utilization of foreign net operating loss carryforwards and tax holidays in certain foreign jurisdictions. We also released a valuation allowance during the three months ended September 30, 2007 related to deferred tax assets of certain international locations which decreased income tax expense by $5.1 million for the three and nine months ended September 30, 2007. Management believes that sufficient positive evidence now exists to release the remaining valuation allowance for these deferred tax assets. The positive evidence we considered was: (i) the consistent profitability of these operations over a two year period; (ii) the increase in profitability experienced in the third quarter of 2007 based on demand for the products from these operations; and (iii) the visibility we have over the next two years for these operations which is the time frame we expect to realize the deferred tax assets. At September 30, 2007, we had U.S. net operating loss carryforwards totaling $345.0 million, which expire at various times through 2027. Additionally, at September 30, 2007, we had $48.2 million of non-U.S. operating loss carryforwards, which expire at various times through 2012.
 
We maintain a valuation allowance on all of our U.S. net deferred tax assets, including our net operating loss carryforwards. We also have valuation allowances on certain deferred tax assets in certain foreign jurisdictions. We will release such valuation allowance as the related tax benefits are realized on our tax returns or when sufficient net positive evidence exists to conclude that the deferred tax assets will be realized.
 
We adopted the provisions of FIN 48 on January 1, 2007. We recognized no cumulative effect of the adoption of FIN 48 to the opening balance of retained earnings as a result of the implementation of FIN 48. The gross amount of unrecognized tax benefits upon adoption of FIN 48 was $11.8 million. The gross amount of unrecognized tax benefits resulting from prior periods increased by $0.1 million during the three months ended September 30, 2007. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $1.6 million as of January 1, 2007 and $1.7 million as of September 30, 2007. It is reasonably possible that the total amount of unrecognized tax benefits will decrease within 12 months due to statutes of limitations expiring in certain foreign jurisdictions which would decrease our non-US unrecognized tax benefits related to historical foreign revenue attribution by less than $1.0 million.
 
We have recognized $0.1 million of interest and penalties in the Consolidated Statement of Income for the nine months ended September 30, 2007 in connection with our unrecognized tax benefits. Interest and penalties are classified as income taxes in the financial statements. The total amount of interest and penalties included in long-
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
term liabilities in connection with our unrecognized tax benefits is $0.3 million and $0.5 million as of January 1, 2007 and September 30, 2007, respectively.
 
As of January 1, 2007 and September 30, 2007, the following tax years remain subject to examination in the following major tax jurisdictions:
 
China — 2001 through 2006
Japan — 2001 through 2006
Korea — 2001 through 2006
Philippines — 2003 through 2006
Singapore — 2004 through 2006
Taiwan — 2001 through 2006
United States (Federal) — 2003 through 2006

5.  	Earnings Per Share	
 
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS adjusts net income and the outstanding shares for the dilutive effect of stock options and convertible debt. The following table summarizes the computation of basic and diluted EPS:

 	 	For the Three
	 	 	For the Nine
	 	
 	 	Months Ended
	 	 	Months Ended
	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 	 	(In thousands, except per share data)	 	 	(In thousands, except per share data)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	60,620	 	 	$	52,810	 	 	$	126,200	 	 	$	111,037	 	
Adjustment for dilutive securities on net income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest on 2.5% convertible notes due 2011, net of tax	 	 	1,491	 	 	 	1,187	 	 	 	3,866	 	 	 	1,636	 	
Interest on 6.25% convertible notes due 2013, net of tax	 	 	1,592	 	 	 	1,563	 	 	 	4,717	 	 	 	4,913	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income — diluted	 	$	63,703	 	 	$	55,560	 	 	$	134,783	 	 	$	117,586	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding — basic	 	 	181,664	 	 	 	178,108	 	 	 	180,200	 	 	 	177,537	 	
Effect of dilutive securities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock options	 	 	1,830	 	 	 	—	 	 	 	2,238	 	 	 	545	 	
2.5% convertible notes due 2011	 	 	13,023	 	 	 	13,023	 	 	 	13,023	 	 	 	6,106	 	
6.25% convertible notes due 2013	 	 	13,351	 	 	 	13,351	 	 	 	13,351	 	 	 	13,351	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding — diluted	 	 	209,868	 	 	 	204,482	 	 	 	208,812	 	 	 	197,539	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EPS:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$	0.33	 	 	$	0.30	 	 	$	0.70	 	 	$	0.63	 	
Diluted	 	$	0.30	 	 	$	0.27	 	 	$	0.65	 	 	$	0.60	 	

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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The following table summarizes the potential shares of common stock that were excluded from diluted EPS, because the effect of including these potential shares was antidilutive:

 	 	For the Three Months Ended
	 	 	For the Nine Months Ended
	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock options	 	 	4,172	 	 	 	14,223	 	 	 	2,124	 	 	 	12,652	 	
5.0% convertible notes due 2007	 	 	—	 	 	 	2,484	 	 	 	673	 	 	 	2,484	 	
5.75% convertible notes due 2006	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,095	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total potentially dilutive shares	 	 	4,172	 	 	 	16,707	 	 	 	2,797	 	 	 	17,231	 	

 	 	
6.  	Accounts Receivable	
 
Accounts receivable, trade consists of the following:

 	 	September 30,
	 	 	December 31,
	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Accounts receivable	 	$	392,633	 	 	$	392,370	 	
Allowance for sales credits	 	 	(6,221	)	 	 	(9,247	)	
Allowance for doubtful accounts	 	 	(1,016	)	 	 	(2,235	)	
 	 	 	 	 	 	 	 	 	
 	 	$	385,396	 	 	$	380,888	 	

 	 	
7.  	Inventories	
 
Inventories consist of the following:

 	 	September 30,
	 	 	December 31,
	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Raw materials and purchased components	 	$	108,941	 	 	$	126,492	 	
Work-in-process	 	 	39,611	 	 	 	34,676	 	
Finished goods	 	 	1,500	 	 	 	3,010	 	
 	 	 	 	 	 	 	 	 	
 	 	$	150,052	 	 	$	164,178	 	

We report inventories net of the allowance for excess and obsolete inventory of $31.8 million and $25.5 million at September 30, 2007 and December 31, 2006, respectively.

8.  	Property, Plant and Equipment	
 
Property, plant and equipment consists of the following:
 
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 	 	September 30,
	 	 	December 31,
	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Land	 	$	110,364	 	 	$	110,730	 	
Land use rights in China	 	 	19,945	 	 	 	19,945	 	
Buildings and improvements	 	 	796,919	 	 	 	790,847	 	
Machinery and equipment	 	 	2,154,781	 	 	 	2,057,939	 	
Furniture, fixtures and other equipment	 	 	163,694	 	 	 	141,621	 	
Construction and assets in progress	 	 	11,515	 	 	 	8,617	 	
 	 	 	 	 	 	 	 	 	
 	 	 	3,257,218	 	 	 	3,129,699	 	
Less — Accumulated depreciation and amortization	 	 	(1,831,449	)	 	 	(1,686,096	)	
 	 	 	 	 	 	 	 	 	
 	 	$	1,425,769	 	 	$	1,443,603	 	

The following table reconciles our activity related to property, plant and equipment as presented on the Condensed Consolidated Statements of Cash Flows to property, plant and equipment additions as reflected in the Consolidated Balance Sheets:

 	 	For the Nine
	 	
 	 	Months Ended
	 	
 	 	September 30,	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Payments for property, plant, and equipment	 	$	159,942	 	 	$	252,401	 	
Net increase (decrease) in related accounts payable and deposits	 	 	32,624	 	 	 	(8,234	)	
 	 	 	 	 	 	 	 	 	
Property, plant and equipment additions	 	$	192,566	 	 	$	244,167	 	

 	 	
9.  	Goodwill and Other Intangibles Assets	
 
The change in the carrying value of goodwill, all of which relates to our packaging services segment, is as follows:

 	 	(In thousands)	 	
 	 	 	 	 	
Balance as of December 31, 2006	 	$	671,900	 	
Additions	 	 	782	 	
Translation adjustments	 	 	(28	)	
 	 	 	 	 	
Balance as of September 30, 2007	 	$	672,654	 	

In March 2007, we increased goodwill by $0.8 million for additional consideration paid with respect to an earn-out provision in connection with our investment in Unitive Semiconductor Taiwan.
 
During the second quarter of 2007, in accordance with the provisions of FASB Statement No. 142, Goodwill and Other Intangible Assets,  we performed our annual impairment test on goodwill and concluded that goodwill was not impaired.
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
Intangibles as of September 30, 2007 consist of the following:

 	 	 	 	 	Accumulated
	 	 	 	 	
 	 	Gross	 	 	Amortization	 	 	Net	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Patents and technology rights	 	$	75,241	 	 	$	(56,968	)	 	$	18,273	 	
Customer relationship and supply agreements	 	 	8,858	 	 	 	(4,688	)	 	 	4,170	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	84,099	 	 	$	(61,656	)	 	$	22,443	 	

Intangibles as of December 31, 2006 consist of the following:

 	 	 	 	 	Accumulated
	 	 	 	 	
 	 	Gross	 	 	Amortization	 	 	Net	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Patents and technology rights	 	$	74,468	 	 	$	(50,167	)	 	$	24,301	 	
Customer relationship and supply agreements	 	 	8,858	 	 	 	(3,465	)	 	 	5,393	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	83,326	 	 	$	(53,632	)	 	$	29,694	 	

Amortization of identifiable intangible assets was $2.4 million for each of the three months ended September 30, 2007 and 2006. Amortization of identifiable intangible assets was $8.0 million and $7.1 million for the nine months ended September 30, 2007 and 2006, respectively.
 
Based on the amortizing intangible assets recognized in our balance sheet at September 30, 2007, amortization for each of the next five fiscal years is estimated as follows:

2007 Remaining	 	$	2,370	 	
2008	 	 	9,482	 	
2009	 	 	4,725	 	
2010	 	 	2,756	 	
2011	 	 	991	 	
Thereafter	 	 	2,119	 	
 	 	 	 	 	
Total	 	$	22,443	 	

 	 	
10.  	Accrued Expenses	
 
Accrued expenses consist of the following:

 	 	September 30,
	 	 	December 31,
	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Payroll and benefits	 	$	71,203	 	 	$	63,222	 	
Accrued interest	 	 	35,228	 	 	 	22,721	 	
Customer advances	 	 	9,561	 	 	 	17,533	 	
Income taxes payable	 	 	6,662	 	 	 	5,382	 	
Other accrued expenses	 	 	40,985	 	 	 	36,643	 	
 	 	 	 	 	 	 	 	 	
 	 	$	163,639	 	 	$	145,501	 	

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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

 	 	September 30,
	 	 	December 31,
	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Debt of Amkor Technology, Inc.	 	 	 	 	 	 	 	 	
Senior secured credit facilities	 	 	 	 	 	 	 	 	
$100 million revolving credit facility, LIBOR plus 1.5% — 2.25%, due November 2009	 	$	—	 	 	$	—	 	
Second lien term loan, LIBOR plus 4.5%, due October 2010	 	 	—	 	 	 	300,000	 	
Senior notes 	 	 	 	 	 	 	 	 	
9.25% Senior notes due February 2008	 	 	88,206	 	 	 	88,206	 	
7.125% Senior notes due March 2011	 	 	249,052	 	 	 	248,877	 	
7.75% Senior notes due May 2013	 	 	425,000	 	 	 	425,000	 	
9.25% Senior notes due June 2016	 	 	400,000	 	 	 	400,000	 	
Senior subordinated notes 	 	 	 	 	 	 	 	 	
10.5% Senior subordinated notes due May 2009	 	 	—	 	 	 	21,882	 	
2.5% Convertible senior subordinated notes due May 2011	 	 	190,000	 	 	 	190,000	 	
Subordinated notes 	 	 	 	 	 	 	 	 	
5.0% Convertible subordinated notes due March 2007, convertible at $57.34 per share	 	 	—	 	 	 	142,422	 	
6.25% Convertible subordinated notes due December 2013, convertible at $7.49 per share, related party	 	 	100,000	 	 	 	100,000	 	
Debt of subsidiaries	 	 	 	 	 	 	 	 	
Secured term loans	 	 	 	 	 	 	 	 	
Term loan, Woori Bank base rate plus 0.5% due April 2014	 	 	289,278	 	 	 	—	 	
Term loan, Taiwan 90-Day Commercial Paper secondary market rate plus 2.25% due June 20, 2008	 	 	6,833	 	 	 	8,411	 	
Term loan, Taiwan 90-Day Commercial Paper primary market rate plus 1.2%, due November 2010	 	 	39,117	 	 	 	45,024	 	
Secured equipment and property financing	 	 	8,171	 	 	 	12,626	 	
Revolving credit facilities	 	 	7,789	 	 	 	22,571	 	
Other debt	 	 	—	 	 	 	296	 	
 	 	 	 	 	 	 	 	 	
 	 	 	1,803,446	 	 	 	2,005,315	 	
Less: Short-term borrowings and current portion of long-term debt	 	 	(161,918	)	 	 	(185,414	)	
 	 	 	 	 	 	 	 	 	
Long-term debt (including related party)	 	$	1,641,528	 	 	$	1,819,901	 	

Debt of Amkor Technology Inc.
 
Senior Secured Credit Facilities
 
In November 2005, we entered into a $100.0 million first lien revolving credit facility available through November 2009, with a letter of credit sub-limit of $25.0 million. Interest is charged under the credit facility at a floating rate based on the base rate in effect from time to time plus the applicable margins which range from 0.0% to 0.5% for base rate revolving loans, or LIBOR plus 1.5% to 2.25% for LIBOR revolving loans. The LIBOR-based
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
interest rate at September 30, 2007 was 6.73%; however, no borrowings were outstanding on this credit facility. As of September 30, 2007, we had utilized $0.2 million of the available letter of credit sub-limit, and had $99.8 million available under this facility. The borrowing base for the revolving credit facility is based on the valuation of our eligible accounts receivable. We incur commitment fees on the unused amounts of the revolving credit facility ranging from 0.25% to 0.50%, based on our liquidity. This facility includes a number of affirmative and negative covenants, which could restrict our operations. If we were to default under the first lien revolving credit facility, we would not be permitted to draw additional amounts, and the banks could accelerate our obligation to pay all outstanding amounts.
 
In October 2004, we entered into a $300.0 million second lien term loan with a group of institutional lenders. The term loan bore interest at a rate of LIBOR plus 450 basis points (9.87% at December 31, 2006); and would have matured in October 2010. The loan was secured by a second lien on substantially all of our U.S. subsidiaries’ assets, including a portion of the shares of certain of our foreign subsidiaries. The second lien term loan was refinanced and paid in full in April 2007 with the proceeds of the $300.0 million, 7-year secured credit facility with Woori Bank in Korea. In connection with the prepayment of the second lien term loan, we recorded a loss on debt retirement of $15.7 million in April 2007, which included $9.0 million in prepayment fees and $6.7 million of unamortized deferred debt issuance costs. This repayment transaction fully discharged all of our obligations under the second lien term loan and fully discharged all subsidiary guarantees and releases all the collateral securing the second lien term loan.
 
Senior and Senior Subordinated Notes
 
In February 2001, we issued $500.0 million of 9.25% Senior Notes due February 2008 (the “2008 Notes”). As of December 31, 2005, we had purchased $29.5 million of these notes. In January 2006, we purchased an additional $30.0 million of these notes and recorded a gain on extinguishment of $0.7 million which is included in debt retirement costs, net, which was partially offset by the write-off of a proportionate amount of our deferred debt issuance costs of $0.2 million. A portion of the 2008 Notes are not redeemable prior to their maturity. In April 2006, we announced a tender offer for the 2008 Notes. We used the net proceeds from the 2016 Notes (described below) to purchase $352.3 million in notes tendered. We recorded a $20.2 million loss on extinguishment related to premiums paid for the purchase of the 2008 Notes and a $2.2 million charge for the associated unamortized deferred debt issuance costs. Both charges are included in debt retirement costs, net in the Consolidated Statements of Income.
 
In March 2004, we issued $250.0 million of 7.125% Senior Notes due March 2011 (the “2011 Notes”). The 2011 Notes were priced at 99.321%, yielding an effective interest rate of 7.25%. The 2011 Notes are redeemable by us at any time provided we pay the holders a “make-whole” premium.
 
In May 2003, we issued $425.0 million of 7.75% Senior Notes due May 2013 (the “2013 Notes”). The 2013 Notes are not redeemable at our option until May 2008 whereupon the notes become redeemable at specified prices.
 
In May 2006, we issued $400.0 million of 9.25% Senior Notes due June 2016 (the “2016 Notes”). The Notes are redeemable by us prior to June 1, 2011 provided we pay the holders a “make-whole” premium. After June 1, 2011, the 2016 Notes are redeemable at specified prices. In addition, prior to June 1, 2009, we may redeem up to 35% of the 2016 Notes at a specified price with the proceeds of certain equity offerings. After deducting fees to the underwriter, the net proceeds were used to purchase a portion of the 2008 Notes, and to pay respective accrued interest and tender premiums.
 
In May 1999, we issued $200.0 million of 10.5% Senior Subordinated Notes due May 2009 (the “2009 Notes”). In June 2006, we used the proceeds from the May 2011 Notes (described below) in connection with a partial call of the 2009 Notes for which $178.1 million of the 2009 Notes were repurchased. We recorded a $3.1 million loss on extinguishment related to premiums paid for the purchase of the 2009 Notes and a $2.2 million charge for the associated unamortized deferred debt issuance costs. Both charges are included in debt retirement costs, net. In June 2007, we redeemed the remaining $21.9 million of the 2009 Notes outstanding with cash on hand,
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
and the indenture has been terminated. We recorded a charge of $0.2 million to write-off the unamortized deferred debt issuance costs in June 2007.
 
The senior notes contain a number of affirmative and negative covenants, which could restrict our operations.
 
Senior Subordinated and Subordinated Convertible Notes
 
In May 2006, we issued $190.0 million of our 2.5% Convertible Senior Subordinated Notes due May 2011 (the “May 2011 Notes”). The May 2011 Notes are convertible at any time prior to the maturity date into our common stock at a price of $14.59 per share, subject to adjustment. The May 2011 Notes are subordinated to the prior payment in full of all of our senior debt. After deducting fees to the underwriter, the net proceeds from the issuance of the May 2011 Notes were used to repurchase a portion of the 2009 Notes, pay respective accrued interest and call premiums. The senior subordinated notes contain a number of affirmative and negative covenants which could restrict our operations.
 
In March 2000, we issued $258.8 million of our 5.0% Convertible Subordinated Notes due March 2007 (the “2007 Notes”). The 2007 Notes were subordinated to the prior payment in full of all of our senior and senior subordinated debt. In November 2003, we repurchased $112.3 million of our 2007 Notes with the proceeds of an equity offering. In June 2006, we repurchased $4.0 million of our 2007 Notes at 99.875%. In March 2007, we repaid the remaining balance of $142.4 million at the maturity date with cash on hand.
 
In November 2005, we issued $100.0 million of our 6.25% Convertible Subordinated Notes due December 2013 (the “December 2013 Notes”) in a private placement to James J. Kim, our Chairman and Chief Executive Officer, and certain Kim family members. The December 2013 Notes are presented as long-term debt, related party on the Consolidated Balance Sheets. The December 2013 Notes are convertible at any time prior to the maturity date into our common stock at an initial price of $7.49 per share (the market price of our common stock on the date of issuance of the December 2013 Notes was $6.20 per share), subject to adjustment. The December 2013 Notes are subordinated to the prior payment in full of all of our senior and senior subordinated debt. In March 2006, we filed a registration statement with the SEC registering the notes and the shares of common stock issuable upon conversion, pursuant to the requirements of a registration rights agreement. The proceeds from the sale of the December 2013 Notes were used to purchase a portion of the 2006 Notes described above. The December 2013 Notes are not redeemable at our option until December 2010.
 
Debt of Subsidiaries
 
Secured Term Loans
 
In April 2007, Amkor Technology Korea, Inc., a Korean subsidiary (“ATK”), entered into a $300.0 million, 7-year secured term loan (“Term Loan”) with Woori Bank. The Term Loan is guaranteed on an unsecured basis by Amkor Technology, Inc (“Amkor”). The Term Loan is secured by substantially all the land, factories, and equipment located at our ATK facilities. The Term Loan bears interest at Woori’s base rate plus 50 basis points (6.61% as of September 30, 2007) and amortizes in 28 equal quarterly payments through April 2014. The proceeds of the Term Loan were used to refinance Amkor’s existing $300.0 million second lien term loan, due October 2010 (see above). We incurred $3.4 million in debt issuance costs in connection with the Woori loan, which amount was funded from cash on hand.
 
In June 2005, Unitive Semiconductor Taiwan, a Taiwanese subsidiary, entered into a New Taiwan Dollar (“NT$”) 400.0 million (approximately $12.2 million) term loan due June 20, 2008 (the “UST Note”), which accrues interest at the Taiwan 90-Day Commercial Paper Secondary Market rate plus 2.25% (4.72% and 4.23% as of September 30, 2007 and December 31, 2006, respectively). Interest payments are due monthly and principal payments are due quarterly. The proceeds of the UST Note were used to satisfy notes previously held by Unitive Semiconductor Taiwan. Amkor has guaranteed the repayment of this loan. The agreement governing the UST Note
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
includes a number of affirmative and negative covenants which could restrict our operations. If we were to default under the facility, the lenders could accelerate our obligation to pay all outstanding amounts.
 
In November 2005, Amkor Technology Taiwan, Inc., a Taiwanese subsidiary, entered into a NT$1.8 billion (approximately $53.5 million) syndication loan due November 2010 (the “Syndication Loan”), which accrues interest at the Taiwan 90-Day Commercial Paper Primary Market rate plus 1.2% (4.13% and 3.22% as of September 30, 2007 and December 31, 2006, respectively). Interest payments are due quarterly and principal payments are due semi-annually. Amkor has guaranteed the repayment of this loan. The agreement governing the Syndication Loan includes a number of affirmative, negative and financial covenants, which could restrict our operations. If we were to default under the facility, the lenders could accelerate our obligation to pay all outstanding amounts.
 
Secured Equipment and Property Financing
 
Our secured equipment and property financing consists of loans secured with specific assets at our Japanese, Singaporean and Chinese subsidiaries. Our credit facility in Japan provides for equipment financing on a three-year basis for each piece of equipment purchased. The Japanese facility accrues interest at 3.59% on all outstanding balances and has maturities at various times between 2006 and 2008. In December 2005, our Singaporean subsidiary entered into a loan with a finance company for $10.0 million, which accrues interest at 4.86% and is due December 2008. The loan, guaranteed by Amkor is secured by a monetary security deposit and certain equipment in our Singapore facility. In May 2004, our Chinese subsidiary entered into a $5.5 million credit facility secured with buildings at one of our Chinese production facilities and is payable ratably through January 2012. The interest rate for the Chinese financing at September 30, 2007 and December 31, 2006, was 6.73% and 6.14%, respectively. These equipment and property financings contain affirmative and negative covenants, which could restrict our operations, and, if we were to default on our obligations under these financings, the lenders could accelerate our obligation to repay amounts borrowed under such facilities.
 
Revolving Credit Facilities
 
Amkor Iwate Corporation, a Japanese subsidiary (“AIC”), had a revolving line of credit with a Japanese bank for 2.5 billion Japanese yen (approximately $21.2 million) that matured in September 2007. We renewed this facility for 2.5 billion Japanese yen (approximately $21.6 million). The line of credit matures in September 2008 and accrues interest at the Tokyo Interbank Offering Rate (“TIBOR”) plus 0.6%. The interest rate at September 30, 2007 ranged from 1.34% to 1.35%, and December 31, 2006 ranged from 0.97% to 1.04%. Amounts drawn on the line of credit were $6.9 million and $7.6 million at September 30, 2007 and December 31, 2006, respectively.
 
Additionally, AIC has a revolving line of credit at a Japanese bank for 300.0 million Japanese yen (approximately $2.4 million), maturing in June 2008, that accrues interest at TIBOR plus 0.5%. The interest rate at September 30, 2007 and at December 31, 2006 was 1.24% and 0.92%, respectively. There was $0.9 million drawn on the line of credit as of September 30, 2007. There were no amounts outstanding at December 31, 2006.
 
Our Philippine subsidiary has a revolving line of credit of 895.0 million Philippine peso (approximately $18.5 million), maturing in October 2007, that accrues interest at LIBOR plus 1.0% (6.23% at September 30, 2007 and December 31, 2006). There were no amounts outstanding at September 30, 2007 and December 31, 2006.
 
In January 2006, Amkor Assembly & Test (Shanghai) Co. Ltd., a Chinese subsidiary (“AATS”), entered into a $15.0 million working capital facility which accrues interest at LIBOR plus 1.25%, and was paid off at maturity in January 2007 with cash on hand. The borrowings outstanding as of December 31, 2006 were $15.0 million. At December 31, 2006, the interest rate ranged from 6.62% to 6.81% based on the dates of borrowing.
 
Unitive Semiconductor Taiwan had a revolving line of credit with a Taiwan bank for NT$60.0 million (approximately $1.9 million) that matured in June 2007. We renewed this facility for NT$20.0 million (approximately $0.6 million) in August 2007. The line of credit matures in June 2008 and accrues interest at a variable
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
interest rate. The interest rate at September 30, 2007 and December 31, 2006 was 4.44% and 3.60%, respectively. There were no amounts drawn on the line of credit as of September 30, 2007 and December 31, 2006.
 
These lines of credit contain certain affirmative and negative covenants, which could restrict our operations. If we were to default on our obligations under any of these lines of credit, we would not be permitted to draw additional amounts, and the lenders could accelerate our obligation to pay all outstanding amounts.
 
Other Debt
 
Other debt includes debt related to our Taiwanese subsidiaries with fixed and variable interest rates that matured in June 2007. The interest rate on this debt ranged from 3.14% to 4.5% as of December 31, 2006.
 
Interest expense related to short-term borrowings and long-term debt is presented net of interest income in the accompanying Consolidated Statements of Income. Interest income for the three and nine months ended September 30, 2007 was $2.8 million and $6.6 million, respectively. For the three and nine months ended September 30, 2006, interest income was $1.3 million and $4.9 million, respectively.
 
Compliance with Debt Covenants
 
We were in compliance with all of our covenants as of September 30, 2007 and December 31, 2006.

12.  	Pension and Severance Plans	
 
Our Philippine, Taiwanese and Japanese subsidiaries sponsor defined benefit plans that cover substantially all of their respective employees who are not covered by statutory plans. Charges to expense are based upon costs computed by independent actuaries. The components of net periodic pension cost for these defined benefit plans are as follows:

 	 	 	 	 	For the Nine
	 	
 	 	For the Three Months Ended
	 	 	Months Ended
	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Components of net periodic pension cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Service cost	 	$	1,597	 	 	$	1,102	 	 	$	4,666	 	 	$	3,285	 	
Interest cost	 	 	926	 	 	 	713	 	 	 	2,688	 	 	 	2,080	 	
Expected return on plan assets	 	 	(478	)	 	 	(405	)	 	 	(1,388	)	 	 	(1,181	)	
Amortization of transitional obligation	 	 	16	 	 	 	17	 	 	 	54	 	 	 	51	 	
Amortization of prior service cost	 	 	19	 	 	 	17	 	 	 	55	 	 	 	52	 	
Recognized actuarial loss	 	 	102	 	 	 	—	 	 	 	322	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total net periodic pension cost	 	$	2,182	 	 	$	1,444	 	 	$	6,397	 	 	$	4,287	 	

For the three and nine months ended September 30, 2007, $0.5 million and $1.4 million, respectively, was contributed to fund the pension plans. In the fourth quarter of 2007, we anticipate contributing an additional $8.0 million to fund the pension plans.
 
Our Korean subsidiary participates in an accrued severance plan that covers employees and directors with at least one year of service. Eligible employees are entitled to receive a lump-sum payment upon termination of their employment, based on their length of service, seniority and rate of pay at the time of termination. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date. Our contributions to the National Pension Plan of the Republic of Korea are deducted from accrued severance benefit liabilities. For the three months ended September 30, 2007 and 2006, the provision recorded for severance benefits was $9.7 million and $7.6 million, respectively. For the nine months ended September 30, 2007
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
and 2006, the provision recorded for severance benefits was $33.1 million and $24.7 million, respectively. The balance recorded in pension and severance obligations for accrued severance at our Korean subsidiary was $170.2 million and $142.3 million at September 30, 2007 and December 31, 2006, respectively.

13.  	Other Non-Current Liabilities	
 
Other non-current liabilities consist of the following:

 	 	September 30,
	 	 	December 31,
	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Customer advances	 	$	21,148	 	 	$	24,397	 	
Other non-current liabilities	 	 	12,570	 	 	 	5,611	 	
 	 	 	 	 	 	 	 	 	
 	 	$	33,718	 	 	$	30,008	 	

Customer advances relate to supply agreements with customers where we commit capacity in exchange for customer prepayment of services.

14.  	Commitments and Contingencies	
 
As of September 30, 2007, we have outstanding $0.2 million of standby letters of credit and have available an additional $24.8 million. Such standby letters of credit are used in the ordinary course of our business and are collateralized by our cash balances.
 
We generally warrant that our services will be performed in a professional and workmanlike manner and in compliance with our customers’ specifications. We accrue costs for known warranty issues. Historically, our warranty costs have been immaterial.
 
Legal Proceedings
 
We are involved in claims and legal proceedings and we may become involved in other legal matters arising in the ordinary course of our business. We evaluate these claims and legal matters on a case-by-case basis to make a determination as to the impact, if any, on our results of operations or financial condition. Except as indicated below, we currently believe that the ultimate outcome of these claims and proceedings, individually and in the aggregate, will not have a material adverse impact on our financial position, results of operations or cash flows. Our evaluation of the potential impact of these claims and legal proceedings on our financial position, results of operations or cash flows could change in the future. We currently are party to the legal proceedings described below. Attorney fees related to legal matters are expensed as incurred.
 
Tessera, Inc. v. Amkor Technology, Inc.
 
On March 2, 2006, Tessera, Inc. filed a Request for Arbitration (the “Request”) with the International Court of Arbitration of the International Chamber of Commerce, captioned  Tessera, Inc. v. Amkor Technology, Inc.  The subject matter of the arbitration is a Limited TCC License Agreement (“Agreement”) entered into between Tessera and our predecessor in 1996. The Agreement licenses certain patents and know-how relating to semiconductor packaging. In their Request, Tessera alleges breach of contract and asserts Amkor owes Tessera royalties under the Agreement in an amount between $85 and $115 million for semiconductor packages assembled by us through 2005 and that Amkor has thereafter continued to assemble semiconductor packages subject to additional royalties, which Tessera alleges are substantial. In our Answer and Counterclaim, we denied that any royalties were owed, and asserted that we are not using any of the licensed Tessera patents or know-how. We also asserted defenses and counterclaims of invalidity and unenforceability of the four patents identified by Tessera in their Request as the basis for their claim (U.S. Patent Nos. 5,679,977, 5,852,326, 6,433,419 and 6,465,893). On November 10, 2006,
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
Tessera provided their Preliminary Claim Charts and added two additional patents to the proceeding, U.S. Patent Nos. 6,133,627 and 5,861,666.
 
On April 17, 2007, Tessera served notice to Amkor that it has terminated the Agreement, which is the basis for the breach of contract dispute in the ICC Arbitration. Amkor has disputed Tessera’s purported notice that it is entitled to terminate the Agreement and the Arbitration Panel has denied Tessera’s pre-hearing motion to terminate the Agreement and deferred that issue until the hearing. Also on April 17, 2007, Tessera instituted an action in Federal District Court for the Eastern District of Texas against certain of Amkor’s customers, and on May 15, 2007, at Tessera’s request, the United States International Trade Commission (“ITC”) instituted an investigation of certain Amkor customers. Both the ITC investigation and the Texas action allege infringement of two of the same patents asserted by Tessera in the arbitration, and Tessera may seek to include in those actions some of the same products packaged by Amkor that are at issue in the arbitration. Although Amkor has not been named as a respondent in the ITC investigation or a defendant in the Texas action, Amkor has received notification from a customer of a request for indemnification in connection with Tessera’s claims in those actions. Amkor has not accepted such request for indemnification.
 
The arbitration is currently set for a hearing beginning March 2008. Although we believe that we have meritorious defenses and counterclaims in this matter and will seek a judgment in our favor, it is not possible to predict the outcome of the arbitration or the total cost of resolving this controversy including the impact of possible future claims of additional royalties by Tessera. The final resolution of this controversy could result in significant liabilities and could have a material adverse effect on our financial condition, results of operations and cash flows.
 
Securities Class Action Litigation
 
On January 23, 2006, a purported securities class action suit entitled Nathan Weiss et al. v. Amkor Technology, Inc.  et al., was filed in U.S. District Court for the Eastern District of Pennsylvania against Amkor and certain of its current and former officers. Subsequently, other law firms filed two similar cases, which were consolidated with the initial complaint. In August 2006 and again in November 2006, the plaintiffs amended the complaint. The plaintiffs added additional officer, director and former director defendants and allege improprieties in certain option grants. The amended complaint further alleges that defendants improperly recorded and accounted for the options in violation of generally accepted accounting principles and made materially false and misleading statements and omissions in its disclosures in violation of the federal securities laws, during the period from July 2001 to July 2006. The amended complaint seeks certification as a class action pursuant to Fed. R. Civ. Proc. 23, compensatory damages, costs and expenses, and such other further relief as the Court deems just and proper. On December 28, 2006, pursuant to motion by defendants, the U.S. District Court for the Eastern District of Pennsylvania transferred this action to the U.S. District Court for the District of Arizona.
 
On September 25, 2007, the U.S. District Court for the District of Arizona dismissed this case with prejudice. On October 23, 2007, plaintiffs filed a notice of appeal from the dismissal in the U.S. Circuit Court of Appeals for the Ninth Circuit.
 
Shareholder Derivative Lawsuits
 
On February 23, 2006, a purported shareholder derivative lawsuit entitled Scimeca v. Kim, et al. was filed in the U.S. District Court for the District of Arizona against certain of Amkor’s current and former officers and directors. Amkor is named as a nominal defendant. In September 2006 and again in November 2006, the plaintiff amended the complaint to add allegations relating to option grants and added additional defendants, including the remaining members of the current board, former board members, and former officers. The complaint includes claims for violation of Section 14(a) of the Exchange Act, breach of fiduciary duty, abuse of control, waste of corporate assets, unjust enrichment and mismanagement, and is generally based on the same allegations as in the securities class action litigation described above.
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
On August 29, 2007, the U.S. District Court for the District of Arizona granted our motion to dismiss this case. We do not know whether the plaintiffs will appeal the decision or take further action.
 
On March 2, 2006, a purported shareholder derivative lawsuit entitled Khan v. Kim, et al. was filed in the Superior Court of the State of Arizona against certain of Amkor’s current and former officers and directors. Amkor is named as a nominal defendant. The complaint includes claims for breach of fiduciary duty and unjust enrichment, and is based on allegations similar to those made in the previously filed federal shareholder derivative action. This action was stayed pending resolution of the federal derivative suit referenced above, and in July 2007, was dismissed by the court without prejudice.
 
On or about October 10, 2006, a purported shareholder derivative lawsuit entitled Feldgus v. Kim, et al.  was filed in the Superior Court of the State of Arizona against certain of Amkor’s current and former officers and directors. Amkor is named as a nominal defendant. The complaint includes claims for breach of fiduciary duty and unjust enrichment and contains allegations relating to option grants similar to those made in the previously filed federal shareholder derivative action referred to above. This action has been stayed pending resolution of the federal derivative suit referenced above.
 
The derivative complaints seek monetary damages, an order directing us to take all necessary actions to improve corporate governance as may be necessary, equitable and/or injunctive relief as permitted by law, disgorgement, restitution, costs, fees, expenses and such other relief as the Court deems just and proper.
 
Securities and Exchange Commission Investigation
 
In August 2005, the Securities and Exchange Commission (“SEC”) issued a formal order of investigation regarding certain activities with respect to Amkor securities. The primary focus of the investigation appears to be activities during the period from June 2003 to July 2004. We believe that the investigation continues to relate primarily to transactions in our securities by certain individuals, and that the investigation may in part relate to whether tipping with respect to trading in our securities occurred. The matters at issue involve activities with respect to Amkor securities during the subject period by certain insiders or former insiders and persons or entities associated with them, including activities by or on behalf of certain current and former members of the Board of Directors and Amkor’s Chief Executive Officer. Amkor has cooperated fully with the SEC on the formal investigation and the informal inquiry that preceded it. Amkor cannot predict the outcome of the investigation. In late 2006, our former general counsel, whose employment with us terminated in March of 2005, was indicted by the United States Attorney’s Office for the Eastern District of Pennsylvania for violation of securities laws, on charges that the former general counsel traded in Amkor securities on the basis of material non-public information. In October 2007, a jury convicted the former general counsel on those charges. In April 2007, the SEC filed a civil action against our former general counsel based on substantially the same allegations as contained in the indictment.
 
As previously disclosed, in July 2006, the Board of Directors established a Special Committee to review our historical stock option practices and informed the SEC of these efforts. The SEC informed us in 2006 that it expanded the scope of its investigation and requested that we provide documentation related to these matters. We intend to continue to cooperate with the SEC.
 
Amkor Technology, Inc. v. Motorola, Inc.
 
In August 2002, we filed a complaint against Motorola, Inc. (“Motorola”) seeking declaratory judgment relating to a controversy between us and Motorola concerning: (i) the assignment by Citizen Watch Co., Ltd. (“Citizen”) to us of a Patent License Agreement dated January 25, 1996 between Motorola and Citizen (the “License Agreement”) and concurrent assignment by Citizen to us of Citizen’s interest in U.S. Patents 5,241,133 and 5,216,278 (the “’133 and ’278 Patents”) which patents relate to ball grid array packages; and (ii) our obligation to make certain payments pursuant to an immunity agreement (the “Immunity Agreement”) dated June 30, 1993 between us and Motorola, pending in the Superior Court of the State of Delaware in and for New Castle County.
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
We and Motorola resolved the controversy with respect to all issues relating to the Immunity Agreement, and all claims and counterclaims filed by the parties in the case relating to the Immunity Agreement were dismissed or otherwise disposed of without further litigation. The claims relating to the License Agreement and the ’133 and ’278 Patents remained pending.
 
We and Motorola both filed motions for summary judgment on the remaining claims, and oral arguments were heard in September 2003. On October 6, 2003, the Superior Court of Delaware ruled in favor of us and issued an Opinion and Order granting our motion for summary judgment and denying Motorola’s motion for summary judgment. Motorola filed an appeal in the Supreme Court of Delaware. In May 2004, the Supreme Court reversed the Superior Court’s decision, and remanded for further development of the factual record. The bench trial in this matter was concluded on January 27, 2006. Post-trial briefs were submitted and post-trial oral arguments were heard by the Court in April 2006. Additional post-trial oral arguments were heard by the Court on September 11, 2006. A decision from the Court is still pending. Although we believe that we have meritorious claims in this matter and will continue to seek judgment in our favor, as of the date of this quarterly report, it is not possible to predict the outcome of this litigation or the total cost of resolving this controversy, including the impact of possible future claims for royalties which may be made by Motorola if the final outcome is unfavorable. The final resolution of this controversy could result in potential liabilities that could have a material adverse effect on our financial condition, results of operations and cash flows.
 
Alcatel Business Systems v. Amkor Technology, Inc., Anam Semiconductor, Inc.
 
On November 5, 1999, we agreed to sell certain semiconductor parts to Alcatel Microelectronics, N.V. (“AME”), a subsidiary of Alcatel S.A. The parts were manufactured for us by Anam Semiconductor, Inc. (“ASI”) and delivered to AME. AME transferred the parts to another Alcatel subsidiary, Alcatel Business Systems (“ABS”), which incorporated the parts into cellular phone products. In early 2001, a dispute arose as to whether the parts sold by us were defective.
 
Paris Commercial Court.  On March 18, 2002, ABS and its insurer filed suit against us and ASI in the Paris Commercial Court of France, claiming damages of approximately 50.4 million Euros (approximately $71.9 million based on the spot exchange rate at September 30, 2007.) We denied all liability associated with this claim. On March 27, 2007, the French Supreme Court (the highest court in the French judicial system) issued a final non-appealable ruling in our favor that the Paris Commercial Court does not have jurisdiction over this matter. Based on this ruling, we do not anticipate any further proceedings in the French courts on this matter.
 
Arbitration.  In December 2006, ABS filed a demand with the American Arbitration Association (“AAA”) for arbitration in Pennsylvania under the November 1999 agreement, which demand is based on substantially the same claims raised in the French lawsuit described above. The arbitration filed with the AAA in December 2006 remains pending, and is not affected by the French Supreme Court’s final ruling in our favor described above.
 
We previously entered into agreements with ASI whereby ASI agreed to indemnify us against all costs, liabilities, damages, expenses and judgments resulting from or arising out of the claims of AME, ABS and ABS’ insurer in the above matters. In January 2007, Dongbu Electronics (now known as Dongbu Hitek) (“Dongbu”), successor in interest to ASI, acknowledged that it is the indemnifying party with respect to claims against us in the now-ended French proceeding described above, and in this Arbitration matter, although Dongbu has subsequently questioned the scope of their indemnity obligation. We continue to believe that Dongbu is obligated to indemnify us for these claims.
 
Amkor Technology, Inc. v. Carsem (M) Sdn Bhd, Carsem Semiconductor Sdn Bhd, and Carsem Inc.
 
In November 2003, we filed a complaint against Carsem (M) Sdn Bhd, Carsem Semiconductor Sdn Bhd, and Carsem Inc. (collectively “Carsem”) with the International Trade Commission (“ITC”) in Washington, D.C., alleging infringement of our United States Patent Nos. 6,433,277; 6,455,356 and 6,630,728 (collectively the “Amkor Patents”) and seeking an exclusionary order barring the importation by Carsem of infringing products.
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
Subsequently, we filed a complaint in the Northern District of California, alleging infringement of the Amkor Patents and seeking an injunction enjoining Carsem from further infringing the Amkor Patents, treble damages plus interest, costs and attorney’s fees. We allege that by making, using, selling, offering for sale, or importing into the U.S. the Carsem Dual and Quad Flat No-Lead Package, Carsem has infringed on one or more of our  Micro  LeadFrame packaging technology claims in the Amkor Patents. The District Court action had been stayed pending resolution of the ITC case. The ITC Administrative Law Judge (“ALJ”) conducted an evidentiary hearing during July and August of 2004 in Washington D.C. and issued an initial determination that Carsem infringed some of our patent claims relating to our  Micro  LeadFrame package technology, that some of our 21 asserted patent claims are valid, and that all of our asserted patent claims are enforceable. However, the ALJ did not find a statutory violation of the Tariff Act. We filed a petition in November 2004 to have the ALJ’s ruling reviewed by the full International Trade Commission. The ITC ordered a new claims construction related to various disputed claim terms and remanded the case to the ALJ for further proceedings. On November 9, 2005, the ALJ issued an Initial Determination that Carsem infringed some of our patent claims and ruled that Carsem violated Section 337 of the Tariff Act. The ITC subsequently authorized the ALJ to reopen the record on certain discovery issues related to third party documents. On February 9, 2006, the ITC ordered a delay in issuance of the Final Determination, pending resolution of the third party discovery issues. The discovery issues are the subject of a subpoena enforcement action which is pending in the District Court for the District of Columbia. The case we filed in 2003 in the Northern District of California remains stayed pending completion of the ITC investigation.

15.  	Related Party Transactions	
 
We purchase leadframe inventory from Acqutek Semiconductor & Technology Co., Ltd. James J. Kim, our Chairman and Chief Executive Officer, owns approximately 17.7% of Acqutek Semiconductor & Technology Co., Ltd. The purchases are arms length and on terms consistent with our non-related party vendors. For the three months ended September 30, 2007 and 2006, purchases from Acqutek Semiconductor & Technology Co., Ltd. were $5.0 million and $4.3 million, respectively. For the nine months ended September 30, 2007 and 2006, purchases from Acqutek Semiconductor and Technology Co., Ltd. were $13.3 million and $11.7 million, respectively. Amounts due to Acqutek Semiconductor & Technology Co., Ltd. at September 30, 2007 and December 31, 2006 were $1.8 million and $1.3 million, respectively.
 
Mr. JooHo Kim is an employee of Amkor and a brother of Mr. James J. Kim, our Chairman and Chief Executive Officer. Mr. JooHo Kim, together with his wife and children, own 96.1% of Jesung C&M, a company that provides cafeteria services to Amkor Technology Korea, Inc. The services provided by Jesung C&M are subject to competitive bid. For the three months ended September 30, 2007 and 2006, purchases from Jesung C&M were $1.6 million. For the nine months ended September 30, 2007 and 2006, purchases from Jesung C&M were $4.6 million and $4.9 million, respectively. Amounts due to Jesung C&M at September 30, 2007 and December 31, 2006 were $0.5 million.

16.  	Business Segments	
 
In accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information,  we have determined we have two reportable segments, packaging and test. Packaging and test are integral parts of the process of manufacturing semiconductor devices and our customers will engage with us for both packaging and test services, or just packaging or test services. Our packaging services process creates an electrical interconnect between the semiconductor chip and the system board through wire bonding or bumping technologies. In packaging, individual chips are separated from the fabricated semiconductor wafers, attached to a substrate and then encased in a protective material to provide optimal electrical connectivity and thermal performance. Our test services include the probing of fabricated wafers and testing of packaged chips using sophisticated equipment to ensure that design specifications are satisfied.
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AMKOR TECHNOLOGY, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The accounting policies for segment reporting are the same as those for our consolidated financial statements. We evaluate our operating segments based on gross margin and gross property, plant and equipment. We do not specifically identify and allocate total assets by operating segment. Summarized financial information concerning reportable segments is shown in the following table. The “other” column includes other corporate adjustments, sales office and corporate property, plant and equipment.

 	 	Packaging	 	 	Test	 	 	Other	 	 	Total	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Three Months Ended Months September 30, 2007	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	616,519	 	 	$	73,072	 	 	$	(508	)	 	$	689,083	 	
Gross profit	 	 	147,767	 	 	 	22,623	 	 	 	(459	)	 	 	169,931	 	
Three Months Ended Months September 30, 2006	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	640,885	 	 	$	73,120	 	 	$	(176	)	 	$	713,829	 	
Gross profit	 	 	155,144	 	 	 	22,815	 	 	 	(192	)	 	 	177,767	 	
Nine Months Ended Months September 30, 2007	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	1,779,061	 	 	$	214,243	 	 	$	(747	)	 	$	1,992,557	 	
Gross profit	 	 	412,899	 	 	 	65,337	 	 	 	725	 	 	 	478,961	 	
Nine Months Ended Months September 30, 2006	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	1,841,102	 	 	$	205,042	 	 	$	(595	)	 	$	2,045,549	 	
Gross profit	 	 	437,559	 	 	 	64,900	 	 	 	(631	)	 	 	501,828	 	
Gross Property, Plant and Equipment	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
September 30, 2007	 	$	2,512,028	 	 	$	619,592	 	 	$	125,598	 	 	$	3,257,218	 	
December 31, 2006	 	 	2,421,171	 	 	 	596,079	 	 	 	112,449	 	 	 	3,129,699	 	

17.  	Restructuring and Reduction in Force	
 
During the second quarter of 2007, we commenced a phased transition of wafer level processing production from our wafer bumping facility in North Carolina to our facility in Taiwan as part of our ongoing efforts to help our customers shorten time-to-market and get closer to the upstream production sources. The North Carolina facility will primarily focus on research and development activities after the transition is complete. We expect to complete the transition of production to Taiwan by April 2008. In April 2007, the specific details surrounding the related reduction in force were communicated to the impacted employees at our North Carolina facility. The costs associated with this activity are accounted for in accordance with SFAS No. 146,  Accounting for Costs Associated with Exit or Disposal Activities (as amended) . We recorded charges for termination benefits during the three and nine months ended September 30, 2007, respectively of $0.3 million and $0.7 million which were primarily included in cost of goods sold. The amount recorded in accrued expenses for termination benefits was $0.6 million as of September 30, 2007. We currently anticipate that an additional $0.4 million related to termination benefits will be charged primarily to cost of goods sold over the remaining employment service period through April 2008. We anticipate total termination benefits of $1.0 million will be paid through April 2008.

18.  	Sale of Specialty Test Operations	
 
In October 2005, we divested a specialty test operation and recognized a gain of $4.4 million. In the three months ended September 30, 2007, we recognized an additional gain of $1.7 million as a result of an earn-out provision provided in the asset purchase agreement. We received the cash in October 2007.
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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
 
This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are considered forward looking statements, including but not limited to statements regarding: trends in outsourcing and inventory levels in the supply chain, demand and selling prices for our services and products; future capacity utilization rates, revenue, gross margins and operating performance; our ability to focus capital investments on increasing advanced laminate, test services, wafer bump and flip chip packaging capacity and information systems and technology; entry into supply agreements with customers; forecasted customer demand; anticipated tax rate; sufficient cash flows and liquidity to fund working capital, estimated capital expenditures of $285 million to $300 million, and debt service requirements; no declaration of cash dividends; our substantial indebtedness; our expectations regarding continued compliance with our debt covenants; the continued service of key senior management and technical personnel; increase in the scope and growth of our operations and ability to implement expansion plans; our ability to offset an increase in fixed commodity prices; the favorable outcome of litigation proceedings; our ability to comply with environmental regulations and foreign laws; our ability to quickly respond to a natural disaster or terrorist attack; the condition, growth and cyclical nature of the semiconductor industry; our contractual obligations; and 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,” “intend” or the negative of these terms or other comparable terminology. These forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could affect future results and events to differ materially from historical and expected results and those expressed or implied in the forward looking statements, including, but not limited to, those set forth in the following discussion as well as in “Risk Factors that May Affect Future Operating Performance” set forth in this quarterly report on Form 10-Q in Part II, Item 1A “Risk Factors.” The following discussion provides information and analysis of our results of operations for the three and nine months ended September 30, 2007 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 other reports we file with the Securities and Exchange Commission.
 
Results of Operations
 
Overview
 
Amkor is one of the world’s largest subcontractors of semiconductor packaging and test services. Packaging and test are integral parts of the process of manufacturing semiconductor devices. This process begins with silicon wafers and involves the fabrication of electronic circuitry into complex patterns, thus creating large numbers of individual chips on the wafers. The fabricated wafers are then probed to ensure the individual devices meet design specifications. The packaging process creates an electrical interconnect between the semiconductor chip and the system board. In packaging, individual chips are separated from the fabricated semiconductor wafers, and typically attached through wire bond or wafer bump technologies to a substrate or leadframe, and then encased in a protective material. Packages are designed to provide optimal electrical connectivity and thermal performance. The packaged chips are then tested using sophisticated equipment to ensure that each packaged chip meets its design specifications. Increasingly, packages are custom designed for specific chips and specific end-market applications. We are able to provide turnkey solutions including semiconductor wafer bump, wafer probe, wafer backgrind, package design and assembly, test and drop shipment services.
 
Our net income for the three months ended September 30, 2007 was $60.6 million, or $0.30 per diluted share, versus net income for the three months ended September 30, 2006 of $52.8 million, or $0.27 per diluted share. In the three months ended September 30, 2007, sales decreased $24.7 million or 3.5% to $689.1 million from $713.8 million in the three months ended September 30, 2006 driven by a decrease in leadframe packages and modules business partially offset by an increase in our advanced laminate packages.
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Gross margin for the three months ended September 30, 2007 was 24.7% compared to 24.9% for the three months ended September 30, 2006 primarily resulting from higher labor costs offset by lower material costs due to a change in product mix.
 
We continue to manage our production lines, allocate assets and selectively expand our capacity. Capital additions during the three months ended September 30, 2007 totaled $77.7 million. We expect that our full year 2007 capital additions will be in the range of $285 million to $300 million, which is subject to adjustment based on business conditions. Our capital investments have been, and we expect will continue to be, primarily focused on increasing our advanced laminate, test services, wafer bump and flip chip packaging capacity. In addition, we continue to make investments in our information systems.
 
Cash provided by operating activities increased $33.8 million to $414.5 million for the nine months ended September 30, 2007 as compared to $380.7 million for the nine months ended September 30, 2006. Cash flows from operations generated during the nine months ended September 30, 2007 funded capital purchases of $159.9 million leaving $254.6 million of free cash flow (defined below). Please see the Liquidity and Capital Resources section below for a further analysis of the changes in our financial position and cash flows during the first nine months of 2007.
 
The following table sets forth certain operating data as a percentage of net sales for the periods indicated:

 	 	For the Three Months Ended
	 	 	For the Nine Months Ended
	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2007	 	 	2006	 	 	2007	 	 	2006	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	 	100.0	%	 	 	100.0	%	 	 	100.0	%	 	 	100.0	%	
Gross profit	 	 	24.7	%	 	 	24.9	%	 	 	24.0	%	 	 	24.5	%	
Operating income	 	 	14.1	%	 	 	14.0	%	 	 	13.1	%	 	 	13.9	%	
Income before income taxes and minority interests	 	 	9.1	%	 	 	7.8	%	 	 	6.9	%	 	 	5.9	%	
Net income	 	 	8.8	%	 	 	7.4	%	 	 	6.3	%	 	 	5.4	%	
 
Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006
 
Net Sales.  Sales decreased $24.7 million, or 3.5%, to $689.1 million in the three months ended September 30, 2007 from $713.8 million in the three months ended September 30, 2006 driven by a decrease in leadframe packages and modules business partially offset by an increase in our advanced laminate packages.
 
Packaging Net Sales.  Packaging net sales decreased $24.4 million, or 3.8%, to $616.5 million in the three months ended September 30, 2007 from $640.9 million in the three months ended September 30, 2006. While net sales decreased 3.8%, packaging unit volume increased 2.1% to 2.3 billion units in the three months ended September 30, 2007 from 2.2 billion units in the third quarter of 2006. The decrease in net sales is principally driven by a change in product mix that reflects a decrease in leadframe packages and our modules business partially offset by an increase in our advanced laminate packages. To a lesser extent, price reductions contributed to the decline in net sales.
 
Test Net Sales.  Test net sales were unchanged at $73.1 million for both the three months ended September 30, 2007 and the three months ended September 30, 2006.
 
Cost of Sales.  Our cost of sales consists principally of materials, labor, depreciation and manufacturing overhead. Because a substantial portion of our costs at our factories is fixed, relatively insignificant increases or decreases in capacity utilization rates can have a significant effect on our gross margin.
 
Material costs as a percent of revenue decreased to 37.3% for the three months ended September 30, 2007 from 39.2% for the three months ended September 30, 2006 because packages with less material content accounted for a larger portion of our sales resulting in lower overall material costs.
 
Labor costs as a percentage of net sales increased to 16.4% for the three months ended September 30, 2007 from 14.4% for the three months ended September 30, 2006 due to higher labor and benefit costs attributable in part to wage increases and the weakening of the U.S. dollar partially offset by a net reduction in headcount.
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As a percentage of net sales, other manufacturing costs were essentially flat at 21.6% for the three months ended September 30, 2007 and 21.5% for the three months ended September 30, 2006.
 
Stock-based compensation included in cost of sales was $0.3 million for the three months ended September 30, 2007 and $0.9 million for the three months ended September 30, 2006.
 
Gross Profit.  Gross profit decreased $7.9 million to $169.9 million, or 24.7% of net sales in the three months ended September 30, 2007 from $177.8 million, or 24.9% of net sales, in the three months ended September 30, 2006. The decrease in gross profit was due primarily to higher labor costs at our factories, partially offset by lower overall material costs due to a change in product mix.
 
Packaging Gross Profit.  Gross profit for packaging decreased $7.3 million to $147.8 million, or 24.0% of packaging net sales, in the three months ended September 30, 2007 from $155.1 million, or 24.2% of packaging net sales, in the three months ended September 30, 2006. The packaging gross profit decrease was due primarily to higher labor costs at our factories, partially offset by lower overall material costs from a change in product mix.
 
Test Gross Profit.  Gross profit for test decreased $0.2 million to $22.6 million, or 30.9% of test net sales, in the three months ended September 30, 2007 from $22.8 million, or 31.2% of test net sales, in the three months ended September 30, 2006. This slight decrease was primarily due to increased depreciation costs as a result of our capital expenditures for test equipment.
 
Selling, General and Administrative Expenses.  Selling, general and administrative expenses decreased $4.4 million, or 6.4%, to $64.1 million for the three months ended September 30, 2007, from $68.5 million for the three months ended September 30, 2006 principally reflecting higher spending in the three months ended September 30, 2006 for professional fees due to the stock option investigation and other related matters. This is partially offset by increased spending in the three months ended September 30, 2007 for professional fees related to our global enterprise resource planning implementation and increased legal costs.
 
Research and Development.  Research and development activities are currently focused on advanced laminate, flip chip and wafer level packaging services. Research and development expenses increased $0.6 million to $10.3 million, or 1.5% of net sales for the three months ended September 30, 2007 from $9.7 million, or 1.4% of net sales in the three months ended September 30, 2006 primarily due to increased labor and benefits costs.
 
Gain on Sale of Specialty Test Operations.  In October 2005, we divested a specialty test operation and recognized a gain of $4.4 million. In the three months ended September 30, 2007, we recognized an additional gain of $1.7 million as a result of an earn-out provision provided in the asset purchase agreement. We received the cash in October 2007.
 
Other (Income) Expense.  Other expenses, net, decreased $9.2 million from the three months ended September 30, 2006 to the three months ended September 30, 2007. This decrease is primarily driven by a decrease of $7.2 million in net interest expense in the three months ended September 30, 2007 compared to the three months ended September 30, 2006, due to our continued focus on strengthening our liquidity by reducing debt as well as refinancing debt with lower interest rate borrowings.
 
Income Tax Expense.  Income tax expense for the three months ended September 30, 2007 and 2006 is attributable to foreign withholding taxes and income taxes at certain of our profitable foreign operations. For the full year of 2007, we anticipate an effective income tax rate of approximately 7.6%, which reflects the utilization of foreign net operating loss carryforwards, tax holidays, and the release of a valuation allowance in certain foreign jurisdictions. The effective rate for the three months ended September 30, 2007 and 2006 was 1.9% and 5.2%, respectively. The decrease is primarily attributable to the release of a valuation allowance on certain foreign deferred tax assets during the three months ended September 30, 2007. Management believes that sufficient positive evidence now exists to release the remaining valuation allowance for these deferred tax assets. The positive evidence we considered was: (i) the consistent profitability of these operations over a two year period; (ii) the increase in profitability experienced in the third quarter of 2007 based on demand for the products from these operations; and (iii) the visibility we have over the next two years for these operations which is the time frame we expect to realize the deferred tax assets.
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At September 30, 2007, we had U.S. net operating loss carryforwards totaling $345.0 million, which expire at various times through 2027. Additionally, at September 30, 2007, we had $48.2 million of non-U.S. operating loss carryforwards, which expire at various times through 2012. We maintain a valuation allowance on substantially all of our deferred tax assets, including our net operating loss carryforwards, and will release such valuation allowance as the related deferred tax benefits are realized on our tax returns or when sufficient net positive evidence exists to conclude that the deferred tax assets will be realized.
 
Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006
 
Net Sales.  Net sales decreased $53.0 million, or 2.6%, to $1,992.6 million for the nine months ended September 30, 2007 from $2,045.5 million for the nine months ended September 30, 2006 principally driven by a decrease in leadframe packages partially offset by an increase in our advanced laminate packages.
 
Packaging Net Sales.  Packaging net sales decreased $62.0 million, or 3.4%, to $1,779.1 million in the nine months ended September 30, 2007 from $1,841.1 million in the nine months ended September 30, 2006. Packaging unit volume decreased 4.1% to 6.3 billion units in the nine months ended September 30, 2007 from 6.6 billion units in the 2006 period. The decrease in net sales and unit volume is principally attributed to a decrease in leadframe packages partially offset by an increase in our advanced laminate packages. To a lesser extent, price reductions contributed to the decline in net sales.
 
Test Net Sales.  Test net sales increased $9.2 million, or 4.5%, to $214.2 million in the nine months ended September 30, 2007 from $205.0 million in the nine months ended September 30, 2006, principally due to increased test times resulting from a change in product mix.
 
Cost of Sales.  Our cost of sales consists principally of materials, labor, depreciation and manufacturing overhead. Because a substantial portion of our costs at our factories is fixed, relatively insignificant increases or decreases in capacity utilization rates can have a significant effect on our gross margin.
 
Material costs as a percent of revenue decreased from 39.2% for the nine months ended September 30, 2006 to 37.7% for the nine months ended September 30, 2007 primarily due to a change in product mix resulting in lower material costs per product.
 
Labor as a percentage of net sales, increased to 16.5% for the nine months ended September 30, 2007, from 14.8% for the nine months ended September 30, 2006, due to increased labor wages at our factories, and the depreciation of the U.S. dollar, partially offset by a net reduction in headcount.
 
Other manufacturing costs increased to 21.8% for the nine months ended September 30, 2007, from 21.5% for the nine months ended September 30, 2006, due to lower revenue. Other manufacturing costs in absolute dollars decreased as a result of the decreased volume partially offset by increased depreciation costs as a result of our capital expenditures which are focused on increasing our advanced laminate, test services, wafer bump and flip chip packaging capacity.
 
Stock-based compensation included in cost of sales amount to $1.0 million for the nine months ended September 30, 2007 compared to $1.6 million for the nine months ended September 30, 2006.
 
Gross Profit.  Gross profit decreased $22.8 million to $479.0 million, or 24.0% of net sales in the nine months ended September 30, 2007 from $501.8 million, or 24.5% of net sales, in the nine months ended September 30, 2006. This decrease in gross profit was due primarily to higher labor costs at our factories partially offset by lower overall material costs due to product mix.
 
Packaging Gross Profit.  Gross profit for packaging decreased $24.7 million to $412.9 million, or 23.2% of packaging net sales, in the nine months ended September 30, 2007 from $437.6 million, or 23.8% of packaging net sales, in the nine months ended September 30, 2006. The packaging gross profit decrease was primarily due to higher labor costs at our factories offset by lower overall material costs due to a change in product mix.
 
Test Gross Profit.  Gross profit for test increased $0.4 million to $65.3 million, or 30.5% of test net sales, in the nine months ended September 30, 2007 from $64.9 million, or 31.7% of test net sales, in the nine months ended
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September 30, 2006. This increase was primarily due to increased test times resulting from a change in product mix partially offset by increased depreciation costs as a result of our capital expenditures.
 
Selling, General and Administrative Expenses.  Selling, general and administrative expenses increased slightly by $0.5 million, or 0.2%, to $189.1 million for the nine months ended September 30, 2007, from $188.6 million for the nine months ended September 30, 2006. In the nine months ended, September 30, 2007 we had increased spending on professional fees related to our global enterprise resource planning implementation and increased litigation activity. For the nine months ended September 30, 2006, we had increased spending for professional fees due to the stock option investigation and other related matters.
 
Research and Development.  Research and development activities are currently focused on advanced laminate, flip chip and wafer level packaging services. Research and development expenses increased $1.5 million to $30.9 million, or 1.6% of net sales for the nine months ended September 30, 2007 from $29.4 million, or 1.4% of net sales in the nine months ended September 30, 2006. Our increase in our research and development expenses was primarily related to increased labor and benefits costs.
 
Gain on Sale of Specialty Test Operations.  In October 2005, we divested a specialty test operation and recognized a gain of $4.4 million. In the three months ended September 30, 2007, we recognized an additional gain of $1.7 million as a result of an earn-out provision provided in the asset purchase agreement. We received the cash in October 2007.
 
Other (Income) Expense.  Other expenses, net, decreased $40.4 million to $123.2 million, or 6.2% of net sales, for the nine months ended September 30, 2007 from $163.6 million, or 8.0% of net sales, for the nine months ended September 30, 2006. In the nine months ended September 30, 2007 we recognized $15.9 million of debt retirement costs compared to $27.4 million in the nine months ended September 30, 2006. In addition, there was a decrease of $22.9 million in net interest expense in the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006, due to our continued focus to strengthen our liquidity by reducing debt as well as refinancing debt with lower interest rate instruments.
 
Income Tax Expense.  Income tax expense for the nine months ended September 30, 2007 and 2006 is attributable to foreign withholding taxes and income taxes at certain of our profitable foreign operations. For the full year 2007, we anticipate an effective income tax rate of approximately 7.6%, which reflects the utilization of foreign net operating loss carryforwards and tax holidays in certain foreign jurisdictions. The effective rate for the nine months ended September 30, 2007 and 2006 was 7.0%. The decrease attributable to the release of a valuation allowance on certain foreign deferred tax assets for the nine months ended September 30, 2007 was offset by an increase in tax in certain profitable foreign jurisdictions. Additionally, the effective tax rate for the nine months ended September 30, 2007 reflects certain discrete period items recorded in the first and second quarters of 2007.
 
At September 30, 2007, we had U.S. net operating loss carryforwards totaling $345.0 million, which expire at various times through 2027. Additionally, we had $48.2 million of non-U.S. net operating loss carryforwards, which expire at various times through 2012. We maintain a full valuation allowance on substantially all of our deferred tax assets, including our net operating loss carryforwards, and will release such valuation allowance as the related deferred tax benefits are realized on our tax returns or when sufficient net positive evidence exists to conclude that the deferred tax assets will be realized.
 
Liquidity and Capital Resources
 
We generated net income of $126.2 million and $111.0 million for the nine months ended September 30, 2007 and 2006, respectively. During the nine months ended September 30, 2007 and 2006, we recorded in connection with refinancing transactions $15.9 million and $27.4 million, respectively of net debt retirement costs in connection with refinancing transactions. Our operating activities provided cash totaling $414.5 million and $380.7 million in the nine months ended September 30, 2007 and 2006, respectively. In March 2007, we used existing cash resources to retire the remaining $142.4 million in 5% convertible notes at maturity, and in June 2007 we redeemed the remaining $21.9 million of the 2009 10.5% senior subordinated notes outstanding with cash on hand.
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In April 2007, we entered into a $300.0 million, 7-year secured credit facility with Woori Bank (“Term Loan”). The Term Loan is secured by substantially all the land, factories, and equipment located at our Korean facilities. The Term Loan bears interest at Woori’s base rate plus 50 basis points (6.61% as of September 30, 2007) and amortizes in 28 equal quarterly payments through April 2014. The proceeds of the Term Loan were used to refinance a $300.0 million second lien term loan due October 2010, which bore interest at a rate of LIBOR plus 450 basis points (9.86% at March 31, 2007). This financing transaction, together with payment of prepayment fees and accrued and unpaid interest, fully discharged all of our obligations under the second lien term loan and fully discharged all subsidiary guarantees and releases all the collateral securing the second lien term loan.
 
We have a significant level of debt, with $1,803.4 million outstanding at September 30, 2007, of which $161.9 million is current. The terms of our debt require significant scheduled principal payments in the coming years, including $27.7 million during the remainder of 2007, $151.5 million in 2008, $54.6 million in 2009, $54.7 million in 2010, $482.6 million in 2011 and $1,032.3 million thereafter.
 
The interest payments required on our debt are also substantial. For example, in the nine months ended September 30, 2007, we paid $89.8 million of interest. (See “Capital Additions and Contractual Obligations” below for a summary of principal and interest payments.) We were in compliance with all debt covenants at September 30, 2007 and expect to remain in compliance with these covenants through September 30, 2008.
 
In order to reduce leverage and future cash interest payments, we may from time to time repurchase our outstanding notes for cash or exchange shares of our common stock for our outstanding notes. Any such transactions may be made in the open market or through privately negotiated transactions and are subject to the terms of our indentures and other debt agreements, market conditions and other factors.
 
We operate in a capital intensive industry. Servicing our current and future customers requires that we incur significant operating expenses and continue to make significant capital expenditures, which are generally made in advance of the related revenues and without any firm customer commitments. During the nine months ended September 30, 2007, we had capital additions of $192.6 million and for all of 2007 we currently anticipate making capital additions in the range of $285 million to $300 million, which estimate is subject to adjustment based on business conditions. Our 2007 capital additions budget remains focused on strategic growth areas of advanced laminate, test services, wafer bump and flip chip packaging capacity.
 
The source of funds for our operations, including making capital expenditures and servicing principal and interest obligations with respect to our debt, are cash flows from our operations, current cash and cash equivalents, borrowings under available debt facilities, or proceeds from any additional debt or equity financing. As of September 30, 2007, we had cash and cash equivalents of $335.0 million and $99.8 million available under our senior secured revolving credit facility.
 
We assess our liquidity based on our current expectations regarding sales, operating expenses, capital spending and debt service requirements. Based on this assessment, we believe that our cash flow from operating activities together with existing cash and cash equivalents and availability under our senior secured revolving credit facility will be sufficient to fund our working capital, capital expenditure and debt service requirements through at least September 30, 2008. Thereafter, our liquidity will continue to be affected by, among other things, the performance of our business, our capital expenditure levels and our ability to either repay debt out of operating cash flow or refinance debt with the proceeds of debt or equity offerings at or prior to maturity. If our performance or access to the capital markets differs materially from our expectations, our liquidity may be adversely impacted.
 
If we fail to generate the necessary net income or operating cash flows to meet the funding needs of our business beyond September 30, 2008 due to a variety of factors, including the cyclical nature of the semiconductor industry and the other factors discussed in Part II, Item 1A “Risk Factors”, our liquidity would be adversely affected. We would consider taking a variety of actions, including: attempting to reduce our high fixed costs (for example, closing facilities and reducing the size of our work force), curtailing or reducing planned capital additions, raising additional equity, borrowing additional funds, refinancing existing indebtedness or taking other actions. There can be no assurance, however, that we will be able to successfully take any of these actions, including adjusting our expenses sufficiently or in a timely manner, or raising additional equity, increasing borrowings or completing
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refinancings on any terms or on terms which are acceptable to us. Our inability to take these actions as and when necessary would materially adversely affect our liquidity, results of operations and financial condition.
 
Many of our debt agreements restrict our ability to pay dividends. We have never paid a dividend to our shareholders and we do not anticipate paying any cash dividends in the foreseeable future. We expect cash flows, if any, to be used in the operation and expansion of our business and the repayment of debt.
 
Cash flows
 
Cash provided by operating activities was $414.5 million for the nine months ended September 30, 2007 compared to $380.7 million for the nine months ended September 30, 2006. Free cash flow (defined below) increased by $126.2 million to $254.5 million for the nine months ended September 30, 2007 compared to $128.3 million for the nine months ended September 30, 2006.
 
Net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2007 and 2006 was as follows:

 	 	For the Nine Months
	 	
 	 	Ended September 30,	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Operating activities	 	$	414,468	 	 	$	380,656	 	
Investing activities	 	 	(156,590	)	 	 	(252,455	)	
Financing activities	 	 	(169,007	)	 	 	(145,727	)	
 
Operating activities:  Our cash flow from operating activities for the nine months ended September 30, 2007 increased $33.8 million to $414.5 million from $380.7 million for the nine months ended September 30, 2006. This increase in operating cash flows is a result of positive changes in assets and liabilities and lower interest paid, partially offset by the payment of prepayment fees in connection with refinancings. Our operating income for the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006 and adjusted for depreciation and amortization and other operating activities and non-cash items decreased $31.3 million largely attributed to decreased utilization of our capacity and our significant fixed costs at our factories. Net interest expense for the nine months ended September 30, 2007 decreased by $22.9 million as compared with the nine months ended September 30, 2006 as a result of reduced debt levels as well as refinancing debt with lower interest rate instruments. Operating cash flows for the nine months ended September 30, 2007 were reduced by $9.0 million for prepayment fees in connection with refinancing our second lien term loan. Changes in assets and liabilities increased operating cash flows by $47.3 million for the nine months ended September 30, 2007 compared with the nine months ended September 30, 2006 driven largely by reduced levels of receivables, inventory and accounts payable in line with the reduced unit volumes and changes in sales mix as well as an increase in employee benefit liabilities. Other changes in operating activities including foreign currency losses, other income and expenses, taxes and minority interest accounted for $3.8 million of the increase in operating cash flows.
 
Investing activities:  Our cash flows used in investing activities for the nine months ended September 30, 2007 decreased by $95.9 million to $156.6 million from $252.5 million for the nine months ended September 30, 2006. This decrease was primarily due to a $92.5 million decrease in payments for property, plant and equipment from $252.4 million in the nine months ended September 30, 2006 to $159.9 million in the nine months ended September 30, 2007. Investing activities were higher in 2006 principally as a result of our expansion of our facilities in China and Singapore. Investing activities during the nine months ended September 30, 2007 included increased proceeds from the sale of property, plant and equipment of $5.1 million primarily attributable to a sale of real property in Korea that had been used for administrative purposes.
 
Financing activities:  Our net cash used in financing activities for the nine months ended September 30, 2007 was $169.0 million, compared with $145.7 million for the nine months ended September 30, 2006. The net cash used in financing activities for the nine months ended September 30, 2007 was primarily driven by the repayment of the $142.4 million of our 5% convertible notes at maturity in March 2007, and the redemption of the remaining $21.9 million 2009 10.5% senior subordinated notes in June 2007. The net cash used in financing activities for the nine months ended September 30, 2006 was primarily driven by the repayment of the $132.0 million for our 5.75%
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convertible subordinated notes at maturity in June 2006. Proceeds from the issuance of stock through our stock compensation plans for the nine months ended September 30, 2007 was $36.4 million, compared with $5.0 million for the nine months ended September 30, 2006.
 
We provide the following supplemental data to assist our investors and analysts in understanding our liquidity and capital resources. Free cash flow represents net cash provided by operating activities less investing activities related to the acquisition of property, plant and equipment. Free cash flow is not defined by generally accepted accounting principles (“GAAP”) and our definition of free cash flow may not be comparable to similar companies and should not be considered a substitute for cash flow measures in accordance with GAAP. We believe free cash flow provides our investors and analysts useful information to analyze our liquidity and capital resources.

 	 	For the Nine Months
	 	
 	 	Ended September 30,	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities	 	$	414,468	 	 	$	380,656	 	
Less payments for property, plant and equipment	 	 	(159,942	)	 	 	(252,401	)	
 	 	 	 	 	 	 	 	 	
Free cash flow	 	$	254,526	 	 	$	128,255	 	

Debt Instruments and Related Covenants
 
We now have, and for the foreseeable future will continue to have, a significant amount of indebtedness. Our indebtedness requires us to dedicate a substantial portion of our cash flow from operations to service payments on our debt. (See table included in “Capital Additions and Contractual Obligations” below). Total debt decreased to $1,803.4 million at September 30, 2007 from $2,005.3 at December 31, 2006. In March 2007, we used existing cash resources to retire the remaining $142.4 million in 5% convertible notes at maturity. In June 2007, we redeemed the remaining $21.9 million of the 2009 10.5% Senior Subordinated Notes outstanding with cash on hand. Amkor Technology, Inc. also guarantees certain debt of our subsidiaries.
 
We were in compliance with all our debt covenants contained in our loan agreements at September 30, 2007. Additional details about our debt are available in Note 11 accompanying the Consolidated Financial Statements included within Part I, Item 1 of this quarterly report.
 
Capital Additions and Contractual Obligations
 
Our capital additions were $192.6 million for the nine months ended September 30, 2007. We expect that our full year 2007 capital additions will be in the range of $285 million to $300 million, as discussed above in the “Overview.” Ultimately, the amount of our 2007 capital additions will depend on several factors including, among others, the performance of our business, the need for additional capacity to service anticipated customer demand and the availability of suitable cash flow from operations or financing. The following table reconciles our activity related to property, plant and equipment payments as presented on the Condensed Consolidated Statements of Cash Flow statement to property, plant and equipment additions as reflected in the Consolidated Balance Sheets:

 	 	For the Nine Months Ended
	 	
 	 	September 30,	 	
 	 	2007	 	 	2006	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	
Payments for property, plant, and equipment	 	$	159,942	 	 	$	252,401	 	
Net increase (decrease) in related accounts payable and deposits	 	 	32,624	 	 	 	(8,234	)	
 	 	 	 	 	 	 	 	 	
Property, plant and equipment additions	 	$	192,566	 	 	$	244,167	 	

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The following table summarizes our contractual obligations at September 30, 2007, and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

 	 	Total	 	 	2007 — Remaining	 	 	2008	 	 	2009	 	 	2010	 	 	2011	 	 	Thereafter	 	
 	 	(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total debt(1)	 	$	1,803,446	 	 	$	27,746	 	 	$	151,463	 	 	$	54,638	 	 	$	54,679	 	 	$	482,600	 	 	$	1,032,320	 	
Scheduled interest payment obligations(2)	 	 	692,582	 	 	 	30,993	 	 	 	118,222	 	 	 	114,005	 	 	 	110,672	 	 	 	89,811	 	 	 	228,879	 	
Purchase obligations(3)	 	 	60,774	 	 	 	60,774	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Operating lease obligations	 	 	59,877	 	 	 	2,127	 	 	 	8,809	 	 	 	7,918	 	 	 	7,648	 	 	 	6,689	 	 	 	26,686	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total contractual obligations	 	$	2,616,679	 	 	$	121,640	 	 	$	278,494	 	 	$	176,561	 	 	$	172,999	 	 	$	579,100	 	 	$	1,287,885	 	

 
 	 	 	
(1)	 	The decrease in our total debt from the Annual Report on Form 10-K as of December 31, 2006, is primarily driven by the repayment of $142.4 million of our 5% convertible notes at maturity in March 2007, and $21.9 million for the redemption of the remaining 10.5% Senior Subordinated 2009 Notes outstanding in June 2007.	
 	 	 	
(2)	 	Scheduled interest payment obligations were calculated using stated coupon rates for fixed rate debt and interest rates applicable at September 30, 2007 for variable rate debt.	
 	 	 	
(3)	 	Represents capital-related purchase obligations.	
 
In addition to the obligations identified in the table above, non-current liabilities recorded in our Consolidated Balance Sheet at September 30, 2007, include $206.0 million related to pension and severance obligations, which the timing of the ultimate payment of these obligations was uncertain at September 30, 2007. Additionally, $21.1 million of customer advances are included in non-current liabilities as of September 30, 2007 and relate to supply agreements with customers where we commit capacity in exchange for customer prepayment of services. Generally customers forfeit the prepayment if the capacity is not utilized per contract terms.
 
The table above excludes liabilities we have with respect to unrecognized tax benefits. As discussed in Note 4 to our Consolidated Financial Statements, we adopted the provisions of FIN 48 on January 1, 2007. At September 30, 2007, the gross amount of our unrecognized tax benefits was approximately $11.7 million, which does not generally represent future cash payments because of the interaction with other tax attributes available such as net operating loss or tax credit carryforwards. Due to the high degree of uncertainty regarding the amount and the timing of any future cash outflows associated with our FIN 48 liabilities, we are unable to reasonably estimate the amount and period of ultimate settlement with the various taxing authorities. As management would expect cash outflows with respect to FIN 48 liabilities to occur over an indeterminate number of future years, it is unlikely that any payment of existing liabilities would have a material adverse affect on liquidity in any future period.
 
Off-Balance Sheet Arrangements
 
We had no off-balance sheet guarantees or other off-balance sheet arrangements as of September 30, 2007. Operating lease commitments are included in the contractual obligation table above.
 
Contingencies, Indemnifications and Guarantees
 
Details about our contingencies, indemnifications and guarantees are available in Note 14 accompanying the Consolidated Financial Statements included within Part I, Item 1 of this quarterly report. As for our contingencies related to our patent litigation, securities litigation, and other litigation and legal matters, if an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on our results of operations in the period in which the ruling occurs. Our evaluation of the potential impact from the legal proceedings, discussed in Note 14 accompanying the Consolidated Financial Statements, on our financial position, results of operations, or cash flows, could change in the future.
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Critical Accounting Policies
 
Our critical accounting policies are disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006. During the nine months ended September 30, 2007, there have been no significant changes in our critical accounting policies.
 
New Accounting Pronouncements
 
For information regarding recent accounting pronouncements, see Note 1 to the Consolidated Financial Statements included within Part I, Item 1 of this quarterly report.

Item 3.  	Quantitative and Qualitative Disclosures about Market Risk	
 
Market Risk Sensitivity
 
We are 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. Our use of derivative instruments, including forward exchange contracts, has been historically insignificant.
 
Foreign Currency Risks
 
Our primary exposures to foreign currency fluctuations are associated with transactions and related assets and liabilities denominated in Chinese renminbi, Japanese yen, Korean won, Philippine pesos, Singapore dollar, and Taiwanese dollar. The objective in managing these foreign currency exposures is to minimize the risk through minimizing the level of activity and financial instruments denominated in those currencies. Our foreign currency financial instruments primarily consist of cash, trade receivables, deferred taxes, trade payables, accrued expenses and debt.
 
For an entity with various financial instruments denominated in a foreign currency in a net asset position, an increase in the exchange rate would result in less net assets when converted to U.S. dollars. Conversely, for an entity with various financial instruments denominated in a foreign currency in a net liability position, a decrease in the exchange rate would result in more net liabilities when converted to U.S. dollars. Changes period over period are caused by changes in our net asset or net liability position and changes in currency exchange rates. Based on our portfolio of foreign currency based financial instruments at September 30, 2007 and December 31, 2006, a 20% increase (decrease) in the foreign currency to U.S. dollar spot exchange rate would result in the following foreign currency risk for our entities in a net asset (liability) position:

 	 	Chart of Foreign Currency Risk	
 	 	Chinese
	 	Japanese
	 	Korean
	 	Philippine
	 	Singapore
	 	Taiwanese
	
 	 	Renminbi	 	Yen	 	Won	 	Peso	 	Dollar	 	Dollar	
 	 	(In thousands)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As of September 30, 2007	 	$	(1,144	)	 	$	2,384	 	 	$	(3,173	)	 	$	(4,020	)	 	$	(549	)	 	$	(8,876	)	
As of December 31, 2006	 	 	(2,178	)	 	 	2,048	 	 	 	(4,750	)	 	 	(3,734	)	 	 	(992	)	 	 	(10,861	)	
 
In addition, at September 30, 2007 and December 31, 2006, we had other foreign currency denominated liabilities, including denominations of the Euro, Swiss franc and Great Britain pound, whereby a 20% decrease in the related exchange rates would result in an aggregate of less than $0.4 million and $0.1 million, respectively, of additional foreign currency risk.
 
Interest Rate Risks
 
We have interest rate risk with respect to our long-term debt. As of September 30, 2007, we had a total of $1,803.4 million of debt of which 80.8% was fixed rate debt and 19.2% was variable rate debt. Our variable rate debt principally relates to our foreign borrowings and any amounts outstanding under our $100.0 million revolving line of credit, of which no amounts were drawn as of September 30, 2007 but which had been reduced by $0.2 million related to outstanding letters of credit at that date. The fixed rate debt consists of senior notes, senior subordinated notes and subordinated notes. In April 2007, our second lien term loan was refinanced with a new term loan which is
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also a variable interest rate debt. As of December 31, 2006, we had a total of $2,005.3 million of debt of which 80.9% was fixed rate debt and 19.1% was variable rate 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 notes is also impacted by changes in the market price of our common stock.
 
The table below presents the interest rates, maturities and fair value of our fixed and variable rate debt as of September 30, 2007.

 	 	2007	 	 	2008	 	 	2009	 	 	2010	 	 	2011	 	 	Thereafter	 	 	Total	 	 	Fair Value	 	
 	 	 	 	 	 	 	 	 	 	 	(In thousands)	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Long term debt:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed rate debt	 	$	833	 	 	$	91,539	 	 	$	—	 	 	$	—	 	 	$	439,052	 	 	$	925,000	 	 	$	1,456,424	 	 	$	1,518,335	 	
Average interest rate	 	 	4.9	%	 	 	9.1	%	 	 	—	 	 	 	—	 	 	 	5.1	%	 	 	8.2	%	 	 	7.4	%	 	 	 	 	
Variable rate debt	 	$	26,913	 	 	$	59,924	 	 	$	54,638	 	 	$	54,679	 	 	$	43,548	 	 	$	107,320	 	 	$	347,022	 	 	$	347,022	 	
Average interest rate	 	 	4.3	%	 	 	6.0	%	 	 	6.1	%	 	 	6.1	%	 	 	6.6	%	 	 	6.6	%	 	 	6.2	%	 	 	 	 	
 
Equity Price Risks
 
We have convertible notes that are convertible into our common stock. We currently intend to repay our remaining convertible notes upon maturity, unless converted, repurchased or refinanced. If investors were to decide to convert their notes to common stock, our future earnings would benefit from a reduction in interest expense but our common stock outstanding would be increased. If we paid a premium to induce such conversion, our earnings could include an additional charge.
 
Further, 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. Such fluctuations could impact our decision or ability to utilize the equity markets as a potential source of our funding needs in the future.

Item 4.  	Controls and Procedures	
 
Evaluation of Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports to the Securities and Exchange Commission (“SEC”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, based on the definition of “disclosure controls and procedures” in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934. In designing and evaluating the disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.
 
We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2007. Based on the foregoing, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2007.
 
Changes in Internal Control Over Financial Reporting
 
During the nine months ended September 30, 2007, we implemented several significant modules of SAP at our largest subsidiary and enhanced the version of SAP being used at another subsidiary. This began another phase of a
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multi-year program to implement a fully integrated suite of SAP application software on a company-wide basis. The implementation of an enterprise resource planning system represents a change in our internal control over financial reporting. Therefore, as appropriate, we have modified the design and documentation of internal control processes and procedures relating to the new system to supplement and complement existing internal control over financial reporting. Post-implementation reviews are being conducted by management to test whether the internal controls surrounding the system implementation processes, key applications, and the financial close process were properly designed and are operating effectively to prevent or detect material financial statement errors. Although management believes internal controls have been maintained or enhanced by the systems implemented, there is a risk that deficiencies may exist and not yet be identified that could constitute significant deficiencies or in the aggregate, a material weakness. Management will complete our evaluation and testing of the internal control changes as of December 31, 2007.
 
PART II. OTHER INFORMATION

Item 1.  	Legal Proceedings	
 
Information about legal proceedings is set forth in Note 14 to the Consolidated Financial Statements included in this quarterly report.
 
Item 1A.  Risk Factors
 
RISK FACTORS THAT MAY AFFECT FUTURE OPERATING PERFORMANCE
 
The factors discussed below are cautionary statements that identify important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements contained in this report. For more information regarding the forward-looking statements contained in this report, see the introductory paragraph to Part I, Item 2 of this quarterly report. You should carefully consider the risks and uncertainties described below, together with all of the other information included in this quarterly report, in considering our business and prospects. The risks and uncertainties described below are not the only ones facing Amkor. Additional risks and uncertainties not presently known to us also may impair our business operations. The occurrence of any of the following risks could affect our business, financial condition, results of operations or cash flows.
 
The matters relating to the Special Committee’s review of our historical stock option granting practices and the restatement of our consolidated financial statements has resulted in expanded litigation and regulatory proceedings against us and may result in future litigation, which could have a material adverse effect on us.
 
On July 24, 2006, we established a Special Committee, consisting of independent members of the Board of Directors, to conduct a review of our historical stock option granting practices during the period from our initial public offering on May 1, 1998 through June 30, 2006. As previously disclosed, the Special Committee identified a number of occasions on which the measurement date used for financial accounting and reporting purposes for stock options granted to certain of our employees was different from the actual grant date. To correct these accounting errors, we amended our Annual Report on Form 10-K for the year ended December 31, 2005 and our quarterly report on Form 10-Q for the three months ended March 31, 2006, to restate our financial information from 1998 through March 31, 2006. The review of our historical stock option granting practices, related activities and the resulting restatements, required us to incur substantial expenses for legal, accounting, tax and other professional services and diverted our management’s attention from our business and could in the future adversely affect our business, financial condition, results of operations and cash flows.
 
Our historical stock option granting practices and the restatement of our prior financial statements have exposed us to greater risks associated with litigation and regulatory proceedings. As described in Note 14 to our Consolidated Financial Statements, the complaints in several of our existing litigation matters were subsequently amended to include allegations relating to stock option grants. In addition, the scope of the existing SEC investigation that began in August 2005 has been expanded to include an investigation into our historical stock option grant practices. We cannot assure you that this litigation, the SEC investigation or any future litigation or regulatory action will result in the same conclusions reached by the Special Committee. The conduct and resolution
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of these matters will be time consuming, expensive and distracting from the conduct of our business. Furthermore, if we are subject to adverse findings in any of these matters, we could be required to pay damages or penalties or have other remedies imposed upon us which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
 
Pending SEC Investigation — The Pending SEC Investigation Could Adversely Affect Our Business and the Trading Price of Our Securities.
 
In August 2005, the SEC issued a formal order of investigation regarding certain activities with respect to Amkor securities. We previously announced that the primary focus of the investigation appears to be activities during the period from June 2003 to July 2004. We believe that the investigation in part relates to transactions in Amkor’s securities by certain individuals, and that the investigation may in part relate to whether tipping with respect to trading in Amkor securities occurred. The matters at issue involve activities with respect to Amkor securities during the subject period by certain insiders or former insiders and persons or entities associated with them, including activities by or on behalf of certain current and former members of the Board of Directors and Amkor’s Chief Executive Officer. In late 2006, our former general counsel, whose employment with us terminated in March of 2005, was indicted by the United States Attorney’s Office for the Eastern District of Pennsylvania for violation of securities laws, on charges that the former general counsel traded in Amkor securities on the basis of material non-public information. In October 2007, a jury convicted the former general counsel on those charges. In April 2007, the SEC filed a civil action against our former general counsel based on substantially the same allegations as contained in the indictment.
 
In July 2006, the Board of Directors established a Special Committee to review Amkor’s historical stock option practices and informed the SEC of these efforts. The SEC informed us in 2006 that it expanded the scope of its investigation and has requested that Amkor provide documentation related to these matters. We have cooperated fully with the SEC on the formal investigation and the informal inquiry that preceded it. We cannot predict the outcome of the investigation. In the event that the investigation leads to SEC action against any current or former officer or director of Amkor, or Amkor itself, our business (including our ability to complete financing transactions) or the trading price of our securities may be adversely impacted. In addition, if the SEC investigation continues for a prolonged period of time, it may have the same impact regardless of the ultimate outcome of the investigation.
 
Fluctuations in Operating Results and Cash Flows — Our Operating Results and Cash Flows Have Varied and May Vary Significantly as a Result of Factors That We Cannot Control.
 
Many factors could materially and adversely affect our net sales, gross profit, operating results and cash flows, or lead to significant variability of quarterly or annual operating results. Our profitability and ability to generate cash from operations is principally dependent upon demand for semiconductors, the utilization of our capacity, semiconductor package mix, the average selling price of our services and our ability to control our costs including labor, material, overhead and financing costs.
 
Our operating results and cash flows have varied significantly from period to period. Our net sales, gross margins, operating income and cash flows have historically fluctuated significantly as a result of many of the following factors, for which we have little or no control over and which we expect to continue to impact our business:

 	• 	Fluctuation in demand for semiconductors and conditions in the semiconductor industry;	
 	 	 	
 	• 	changes in our capacity utilization;	
 	 	 	
 	• 	changes in average selling prices;	
 	 	 	
 	• 	changes in the mix of semiconductor packages;	
 	 	 	
 	• 	evolving package and test technology;	
 	 	 	
 	• 	absence of backlog and the short-term nature of our customers’ commitments and the impact of these factors on the timing and volume of orders relative to our production capacity;	

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 	• 	changes in costs, availability and delivery times of raw materials and components;	
 	 	 	
 	• 	changes in labor costs to perform our services;	
 	 	 	
 	• 	the timing of expenditures in anticipation of future orders;	
 	 	 	
 	• 	changes in effective tax rates;	
 	 	 	
 	• 	the availability and cost of financing;	
 	 	 	
 	• 	intellectual property transactions and disputes;	
 	 	 	
 	• 	high leverage and restrictive covenants;	
 	 	 	
 	• 	warranty and product liability claims;	
 	 	 	
 	• 	costs associated with litigation judgments and settlements;	
 	 	 	
 	• 	international events or environmental or natural events, such as earthquakes, that impact our operations;	
 	 	 	
 	• 	difficulties integrating acquisitions; and	
 	 	 	
 	• 	our ability to attract qualified employees to support our geographic expansion.	
 
We have historically been unable to accurately predict the impact of these factors upon our results for a particular period. These factors, as well as the factors set forth below which have not significantly impacted our recent historical results, may impair our future business operations and may materially and adversely affect our net sales, gross profit, operating results and cash flows, or lead to significant variability of quarterly or annual operating results:

 	• 	loss of key personnel or the shortage of available skilled workers;	
 	 	 	
 	• 	rescheduling and cancellation of large orders; and	
 	 	 	
 	• 	fluctuations in our manufacturing yields.	
 
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 cyclical by nature. The semiconductor industry has experienced significant, and sometimes prolonged, downturns. Because our business is, and will continue to be, dependent on the requirements of semiconductor companies for subcontracted packaging and test services, any downturn in the semiconductor industry or any other industry that uses a significant number of semiconductor devices, such as consumer electronic products, telecommunication devices, or computing devices could have a material adverse effect on our business and operating results. If industry conditions deteriorate, we could suffer significant losses, as we have in the past, which could materially impact our business, results of operations and financial condition.
 
High Fixed Costs — Due to Our High Percentage of Fixed Costs, We Will Be Unable to Maintain Our Gross Margin at Past Levels if We Are Unable to Achieve Relatively High Capacity Utilization Rates.
 
Our operations are characterized by relatively high fixed costs. Our profitability depends in part not only on pricing levels for our products and services, but also on the utilization rates for our testing and packaging equipment, commonly referred to as “capacity utilization rates.” In particular, increases or decreases in our capacity utilization rates can significantly affect gross margins since the unit cost of packaging and test services generally decreases as fixed costs are allocated over a larger number of units. In periods of low demand, we experience relatively low capacity utilization rates in our operations, which lead to reduced margins during that period. From time to time we have experienced lower than optimum utilization rates in our operations due to a decline in worldwide demand for our packaging and test services. This can lead to significantly reduced margins during that period. Although our capacity utilization rates at times have been strong, we cannot assure you that we will be able to achieve or maintain relatively high capacity utilization rates, and if we fail to do so, our gross margins may
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decrease. If our gross margins decrease, our results of operations and financial condition could be materially adversely affected.
 
In addition, our fixed operating costs have increased in part as a result of our efforts to expand our capacity through significant capital additions. In the event that forecasted customer demand for which we have made and, on a more limited basis, expect to make advance capital additions does not materialize, our sales may not adequately cover our substantial fixed costs resulting in reduced profit levels or causing significant losses, both of which may adversely impact our liquidity, results of operations and financial condition. Additionally, we could suffer significant losses if current industry conditions deteriorate, which could materially impact our business including our liquidity.
 
Guidance — Our Failure to Meet Our Guidance or Analyst Projections Could Adversely Impact the Trading Prices of Our Securities.
 
We periodically provide guidance to investors with respect to certain financial information for future periods. Securities analysts also periodically publish their own projections with respect to our future operating results. As discussed above under “Fluctuations in Operating Results and Cash Flows — Our Operating Results and Cash Flows Have Varied and May Vary Significantly as a Result of Factors That We Cannot Control,” our operating results and cash flows vary significantly and are difficult to accurately predict. To the extent we fail to meet or exceed our own guidance or the analyst projections for any reason, the trading prices of our securities may be adversely impacted. Moreover, even if we do meet or exceed that guidance or those projections, the analysts and investors may not react favorably, and the trading prices of our securities may be adversely impacted.
 
Declining Average Selling Prices — The Semiconductor Industry Places Downward Pressure on the Prices of Our Products.
 
Prices for packaging and test services have generally 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, by negotiating lower prices with our material vendors, recovering material cost increases from our customers, and by driving engineering and technological changes in our packaging and test processes which resulted in reduced manufacturing costs. We expect general downward pressure on average selling prices for our packaging and test services in the future. If we are unable to offset a decline in average selling prices, including developing and marketing new packages with higher prices, reducing our purchasing costs, recovering more of our material cost increases from our customers and reducing our manufacturing costs, our future operating results will suffer.
 
Decisions by Our IDM Customers to Curtail Outsourcing May Adversely Affect Our Business.
 
Historically, we have been dependent on the trend in outsourcing of packaging and test services by integrated device manufacturers (“IDM”). Our IDM customers continually evaluate the outsourced services against their own in-house packaging and test services. As a result, at any time, and for a variety of reasons, IDMs may decide to shift some or all of their outsourced packaging and test services to internally sourced capacity.
 
The reasons IDMs may shift their internal capacity include:

 	• 	their desire to realize higher utilization of their existing test and packaging capacity, especially during downturns in the semiconductor industry;	
 	 	 	
 	• 	their unwillingness to disclose proprietary technology;	
 	 	 	
 	• 	their possession of more advanced packaging and test technologies; and	
 	 	 	
 	• 	the guaranteed availability of their own packaging and test capacity.	
 
Furthermore, to the extent we continue to limit capacity commitments for certain customers, these customers may begin to increase their level of in-house packaging and test capabilities, which could adversely impact our sales and profitability and make it more difficult for us to regain their business when we have available capacity. Any shift
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or a slowdown in this trend of outsourcing packaging and test services is likely to adversely affect our business, financial condition and results of operations.
 
In a downturn in the semiconductor industry, IDMs may be especially likely to respond by shifting some outsourced packaging and test services to internally serviced capacity on a short term basis. This would have a material adverse effect on our business, financial condition and results of operations, especially during a prolonged industry downturn.
 
High Leverage and Restrictive Covenants — Our Substantial Indebtedness Could Adversely Affect Our Financial Condition and Prevent Us from Fulfilling Our Obligations.
 
We now have, and for the foreseeable future will continue to have, a significant amount of indebtedness. As of September 30, 2007, our total debt balance was $1,803.4 million, of which $161.9 million was classified as a current liability. In addition, despite current debt levels, the terms of the indentures governing our indebtedness allow us or our subsidiaries to incur more debt, subject to certain limitations. If new debt is added to our consolidated debt level, the related risks that we now face could intensify.
 
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. The agreements also impose affirmative covenants on us including financial reporting obligations. 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 and we are unable to amend such financial covenants. Bondholder groups may be aggressive and may attempt to call defaults for technical violations of covenants that have little or nothing to do with our financial performance in an effort to extract consent fees from us or to force a refinancing. A default and acceleration under one debt instrument may also trigger cross-acceleration under our other debt instruments. A default or event of default under one or more of our revolving credit facilities would also preclude us from borrowing additional funds under such facilities. An event of default under any debt instrument, if not cured or waived, could have a material adverse effect on us.
 
For example, in August 2006 we received a default notice from the trustees for holders of various tranches of our outstanding notes for failure to provide certain financial information required under our indentures. We cured the alleged defaults by filing our quarterly report for the quarter ended June 30, 2006 within the requisite time period. However, had we not filed our quarterly report as required, the bondholders may have been able to accelerate all outstanding amounts under the above listed notes and trigger acceleration under our other debt agreements, which could have resulted in a material adverse effect.
 
Our substantial indebtedness could:

 	• 	Make it more difficult for us to satisfy our obligations with respect to our indebtedness;	
 	 	 	
 	• 	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.	
 
History of Losses.
 
Although we achieved net income and positive operating cash flow in 2006 and the first nine months of 2007, we have had net losses in four of the previous five years and negative operating cash flow in several previous
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quarters. There is no assurance that we will be able to sustain our current profitability or avoid net losses in the future.
 
Ability to Fund Liquidity Needs.
 
We operate in a capital intensive industry. Servicing our current and future customers requires that we incur significant operating expenses and continue to make significant capital expenditures, which are generally made in advance of the related revenues and without any firm customer commitments. During 2006, we had capital additions of $299 million and in 2007 we currently anticipate making capital additions of approximately $285 million to $300 million, which estimate is subject to adjustment based on business conditions. In addition, we have a significant level of debt, with $1,803.4 million outstanding at September 30, 2007, $161.9 million of which is current. The terms of such debt require significant scheduled principal payments in the coming years, including $27.7 million due during the remainder of 2007, $151.5 million due in 2008, $54.6 million due in 2009, $54.7 million due in 2010, $482.6 million due in 2011 and $1,032.3 million due thereafter. The interest payments required on our debt are also substantial. For example, in the nine months ended September 30, 2007, we paid $89.8 million of interest. (See Part  I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Additions and Contractual Obligations” for a summary of principal and interest payments.) The source of funds to fund our operations, including making capital expenditures and servicing principal and interest obligations with respect to our debt, are cash flows from our operations, current cash and cash equivalents, borrowings under available debt facilities, or proceeds from any additional debt or equity financing. As of September 30, 2007, we had cash and cash equivalents of $335.0 million and $99.8 million available under our senior secured revolving credit facility.
 
We assess our liquidity based on our current expectations regarding sales, operating expenses, capital spending and debt service requirements. Based on this assessment, we believe that our cash flow from operating activities together with existing cash and cash equivalents and availability under our senior secured revolving credit facility will be sufficient to fund our working capital, capital expenditure and debt service requirements through September 30, 2008. Thereafter, our liquidity will continue to be affected by, among other things, the performance of our business, our capital expenditure levels and our ability to repay debt out of our operating cash flow or refinance the debt with the proceeds of debt or equity offerings at or prior to maturity. If our performance or access to the capital markets differs materially from our expectations, our liquidity may be adversely impacted.
 
If we fail to generate the necessary net income or operating cash flows to meet the funding needs of our business beyond September 30, 2008 due to a variety of factors, including the cyclical nature of the semiconductor industry and the other factors discussed in this “Risk Factors” section, our liquidity would be adversely affected. We would consider taking a variety of actions, including: attempting to reduce our high fixed costs (for example, closing facilities and reducing the size of our work force), curtailing or reducing planned capital additions, raising additional equity, borrowing additional funds, refinancing existing indebtedness or taking other actions. There can be no assurance, however, that we will be able to successfully take any of these actions, including adjusting our expenses sufficiently or in a timely manner, or raising additional equity, or increasing borrowings or completing refinancings on any terms or on terms that are acceptable to us. Our inability to take these actions as and when necessary would materially adversely affect our liquidity, results of operations and financial condition.
 
Absence of Backlog — The Lack of Contractually Committed Customer Demand May Adversely Affect Our Sales.
 
Our packaging and test business does not typically operate with any material backlog. Our quarterly net sales from packaging and test services are substantially dependent upon our customers’ demand in that quarter. None of our customers have 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 any material amount. In addition, our customers often reduce, cancel or delay their purchases of packaging and test services for a variety of reasons including industry-wide, customer-specific and Amkor-related reasons. Recently, our customers’ demand for our services has been stable; however, we cannot predict if this demand trend will continue. 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 not be able to adjust costs in a timely manner to compensate for any sales shortfall. If we are unable to do so, it
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would adversely affect our margins, operating results, cash flows and financial condition. If customer demand does not materialize as anticipated, our net sales, margins, operating results, cash flows and financial condition will be materially and adversely affected.
 
Risks Associated With International Operations — We Depend on Our Factories and Operations in China, Japan, Korea, the Philippines, Singapore and Taiwan. Many of Our Customers’ and Vendors’ Operations Are Also Located Outside of the U.S.
 
We provide packaging and test services through our factories and other operations located in the China, Japan, Korea, the Philippines, Singapore and Taiwan. Moreover, many of our customers’ and vendors’ 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, military and terrorist 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.	
 
Our Management Information Systems May Prove Inadequate — We Face Risks in Connection With Our Current Project to Install a New Enterprise Resource Planning System For Our Business.
 
We depend on our management information systems for many aspects of our business. Some of our key software has been developed by our own programmers and this software may not be easily integrated with other software and systems. We are implementing a new enterprise resource planning system to replace many of our existing systems at significant locations. We face risks in connection with our current project to install a new enterprise resource system for our business. These risks include:

 	• 	we may face delays in the design and implementation of that system;	
 	 	 	
 	• 	the cost of the system may exceed our plans and expectations; and	
 	 	 	
 	• 	such system may damage our ability to process transactions or harm our control environment.	
 
Our business will be materially and adversely affected if our management information systems are disrupted or if we are unable to improve, upgrade, integrate or expand upon our systems, particularly in light of our intention to implement a new enterprise resource planning system.
 
Difficulties Expanding and Evolving Our Operational Capabilities — We Face Challenges as We Integrate New and Diverse Operations and Try to Attract Qualified Employees to Support Our Operations.
 
We have experienced, and expect to continue to experience, growth in the scope and complexity of our operations. For example, each business we have acquired had, at the time of acquisition, multiple systems for managing its own production, sales, inventory and other operations. Migrating these businesses to our systems typically is a slow, expensive process requiring us to divert significant amounts of resources from multiple aspects of our operations. This growth has strained our managerial, financial, plant operations and other resources. Future expansions may result in inefficiencies as we integrate new operations and manage geographically diverse operations. Our success depends to a significant extent upon the continued service of our key senior management and technical personnel, any of whom may be difficult to replace. 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, including senior management, as a result of competition or for any other reason. We evaluate our management team and engage in long-term succession planning in order to ensure orderly replacement of key personnel. We cannot assure you that we will be successful in these efforts or in hiring and properly training sufficient numbers of
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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.
 
Dependence on Materials and Equipment Suppliers — Our Business May Suffer If The Cost, Quality 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, laminate substrates and gold wire, from a limited group of suppliers. Furthermore, we purchase the majority of our materials on a purchase order basis. From time to time, we enter into supply agreements, generally up to one year in duration, to guarantee supply to meet projected demand. Our business may be harmed if we cannot obtain materials and other supplies from our vendors in a timely manner, in sufficient quantities, in acceptable quality or at competitive prices.
 
We need to purchase new test and packaging equipment if we decide to expand our operations (sometimes in anticipation of expected market demand), to manufacture some new types of packaging, perform some different testing or to replace equipment that breaks down or wears out. From time to time, increased demand for new equipment may cause lead times to extend beyond those normally required by equipment vendors. For example, in the past, increased demand for equipment caused some equipment suppliers to only partially satisfy our equipment orders in the normal lead time frame or increase prices during market upturns for the semiconductor industry. The unavailability of equipment or failures to deliver equipment could delay implementation of our future expansion plans and impair our ability to meet customer orders. If we are unable to implement our future expansion plans or meet customer orders, we could lose potential and existing customers. Generally, we do not enter into binding, long-term equipment purchase agreements and we acquire our equipment on a purchase order basis, which exposes us to substantial risks. For example, changes in foreign currency exchange rates could result in increased prices for equipment purchased by us, which could have a material adverse effect on our results of operations.
 
We are a large buyer of gold and other commodity materials including substrates and copper. The price of gold and other commodities used in our business fluctuate. Historically, we have been able to partially offset the effect of commodity price increases through price adjustments to some customers and changes in our product designs. Significant price increases may adversely impact our gross margin in future quarters to the extent we are unable to pass along past or future commodity price increases to our customers.
 
Loss of Customers — The Loss of Certain Customers May Have a Significant Adverse Effect on the Operations and Financial Results.
 
The loss of a large customer or disruption of our strategic partnerships or other commercial arrangements may result in a decline in our sales and profitability. Although we have over 300 customers, we have derived and expect to continue to derive a large portion of our revenues from a small group of customers during any particular period due in part to the concentration of market share in the semiconductor industry. Our five largest customers together accounted for approximately 29.7%, 27.9% and 25.2% of our net sales in the first nine months of 2007, and the years ended December 31, 2006 and 2005, respectively. No customer accounts for more than 10% of our net sales.
 
The demand for our services from each customer is directly dependent upon that customer’s level of business activity, which could vary significantly from year to year. The loss of a large customer may adversely affect our sales and profitability. Our key customers typically operate in the cyclical semiconductor business and, in the past, order levels have varied significantly from period to period based on a number of factors. Our business is likely to remain subject to this variability in order levels, and we cannot assure you that these key customers or any other customers will continue to place orders with us in the future at the same levels as in past periods. The loss of one or more of our significant customers, or reduced orders by any one of them, and our inability to replace these customers or make up for such orders could reduce our profitability. For example, our facility in Iwate, Japan, is primarily dedicated to a single customer, Toshiba Corporation. If we were to lose Toshiba as a customer or if it were to materially reduce its business with us, it could be difficult for us to find one or more new customers to utilize the capacity, which could have a material adverse effect on our operations and financial results.
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Capital Additions — We Believe We Need To Make Substantial Capital Additions, Which May Adversely Affect Our Business If Our Business Does Not Develop As We Expect.
 
We believe that our business requires us to make significant capital additions in order to capitalize on what we believe is an overall trend to outsource packaging and test services. The amount of capital additions will depend on several factors, including the performance of our business, our assessment of future industry and customer demand, our capacity utilization levels and availability, our liquidity position and the availability of financing. Our ongoing capital addition requirements may strain our cash and short-term asset balances, and we expect that depreciation expense and factory operating expenses associated with our recent capital additions to increase production capacity will put downward pressure on our gross margin, at least over the near term.
 
Furthermore, if we cannot generate or borrow additional funds to pay for capital additions as well as research and development activities, our growth prospects and future profitability may be adversely affected. Our ability to obtain external financing in the future is subject to a variety of uncertainties, including:

 	• 	our future financial condition, results of operations and cash flows;	
 	 	 	
 	• 	general market conditions for financing activities by semiconductor companies; and	
 	 	 	
 	• 	economic, political and other global conditions.	
 
The lead time needed to order, install and put into service various capital additions is often significant, and as a result we often need to commit to capital additions in advance of our receipt of firm orders or advance deposits based on our view of anticipated future demand with only very limited visibility. Although we seek to limit our exposure in this regard, in the past we have from time to time expended significant capital for additions for which the anticipated demand did not materialize for a variety of reasons, many of which were outside of our control. To the extent this occurs in the future, our margins, liquidity, results of operations and financial condition could be materially adversely affected.
 
Impairment Charges — Any Impairment Charges Required Under GAAP May Have a Material Adverse Effect on Our Net Income.
 
Under GAAP, we review our long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. In addition, goodwill and other intangible assets with indefinite lives are tested for impairment at least annually. We may be required in the future to record a significant charge to earnings in our financial statements during the period in which any impairment of our long-lived assets is determined. Such charges have a significant adverse impact on our results of operations and financial condition.
 
Increased Litigation Incident to Our Business — Our Business May Suffer as a Result of Our Involvement in Various Lawsuits.
 
We are currently a party to various legal proceedings, including those described in Note 14 to the Consolidated Financial Statements included in the quarterly report. For example, we are engaged in an arbitration proceeding entitled  Tessera, Inc. v. Amkor Technology, Inc.  We were also named as a party in a purported securities class action suit entitled  Nathan Weiss et al. v. Amkor Technology, Inc. et al.  (and several similar cases which have now been consolidated), and in purported shareholder derivative lawsuits entitled  Scimeca v. Kim, et al., Khan v. Kim, et al. and Feldgus v. Kim, et al.  If an unfavorable ruling or outcome were to occur in arbitration or litigation, there exists the possibility of a material adverse impact on our results of operations, financial condition or cash flows. An unfavorable ruling or outcome could also have a negative impact on the trading price of our securities. Our evaluation of the potential impact from the legal proceedings referred to in this quarterly report on our financial condition, results of operations or cash flows could change in the future.
 
We Could Suffer Adverse Tax and Other Financial Consequences if Taxing Authorities Do Not Agree with Our Interpretation of Applicable Tax Laws.
 
Our corporate structure and operations are based, in part, on interpretations of various tax laws, including withholding tax and other relevant laws of applicable taxing jurisdictions. From time to time, the taxing authorities
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of the relevant jurisdictions may conduct examinations of our income tax returns and other regulatory filings. We cannot assure you that the taxing authorities will agree with our interpretations. To the extent they do not agree, we may seek to enter into settlements with the taxing authorities which require significant payments or otherwise adversely affect our results of operations or financial condition. We may also appeal the taxing authorities’ determinations to the appropriate governmental authorities, but we can not be sure we will prevail. If we do not prevail, we may have to make significant payments or otherwise record charges (or reduce tax assets) that adversely affect our results of operations or financial condition.
 
For example, the Internal Revenue Service (“IRS”) conducted examinations of our U.S. federal income tax returns in prior years which resulted in various adjustments, including reductions in our U.S. net operating loss carry-forwards. Future examinations by the taxing authorities in the United States or other jurisdictions may result in additional adverse tax consequences.
 
Rapid Technological Change — Our Business Will Suffer If We Cannot Keep Up With Technological Advances in Our Industry.
 
The complexity and breadth of semiconductor packaging and test services are rapidly increasing. As a result, we expect that we will need to offer more advanced package designs in order to respond to competitive industry conditions and customer requirements. Our success depends upon our ability to acquire, develop and implement new manufacturing processes and package design technologies and tools. The need to develop and maintain advanced packaging capabilities and equipment could require significant research and development and capital expenditures and acquisitions in future years. In addition, converting to new package designs or process methodologies could result in delays in producing new package types, which could adversely affect our ability to meet customer orders and adversely impact our business.
 
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 or obtain access to advanced package designs developed by others, our business could suffer.
 
Packaging and Test — The Packaging and Test Process Is Complex and Our Production Yields and Customer Relationships May Suffer from Defects in the Services We Provide.
 
Semiconductor packaging and test are complex processes that require significant technological and process expertise. The packaging process is complex and involves a number of precise steps. Defective packages primarily result from:

 	• 	contaminants in the manufacturing environment;	
 	 	 	
 	• 	human error;	
 	 	 	
 	• 	equipment malfunction;	
 	 	 	
 	• 	changing processes to address environmental requirements;	
 	 	 	
 	• 	defective raw materials; or	
 	 	 	
 	• 	defective plating services.	
 
Testing is also complex and involves sophisticated equipment and software. Similar to most software programs, these software programs are complex and may contain programming errors or “bugs.” The testing equipment is also subject to malfunction. In addition, the testing process is subject to operator error by our employees who operate our testing equipment and related software.
 
These and other factors have, from time to time, contributed to lower production yields. They may also do so in the future, particularly as we expand our capacity or change our processing steps. In addition, to be competitive we must continue to expand our offering of packages. Our production yields on new packages typically are significantly lower than our production yields on our more established packages.
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Our failure to maintain high standards or acceptable production yields, if significant and prolonged, could result in loss of customers, increased costs of production, delays, substantial amounts of returned goods and claims by customers relating thereto. Any of these problems could have a material adverse effect on our business, financial condition and results of operations.
 
In addition, in line with industry practice, new customers usually require us to pass a lengthy and rigorous qualification process that may take several months, at a significant cost to the customer. If we fail to qualify packages with potential customers or customers with which we have recently become qualified, our operating results and financial condition could be adversely affected.
 
Competition — We Compete Against Established Competitors in the Packaging and Test Business as Well as Internal Customer Capabilities.
 
The subcontracted semiconductor packaging and test market is very competitive. We face substantial competition from established packaging and test service providers primarily located in Asia, including companies with significant processing capacity, financial resources, research and development operations, marketing and other capabilities. These companies also have established relationships with many large semiconductor companies that are our current or potential customers.
 
We also face competition from the internal capabilities and capacity of many of our current and potential IDM customers.
 
In addition, we may in the future have to compete with a number of companies that may enter the market and with companies that may offer new or emerging technologies that compete with our products and services.
 
We cannot assure you that we will be able to compete successfully in the future against our existing or potential competitors or that our customers will not rely on internal sources for packaging and test services, or that our business, financial condition and results of operations will not be adversely affected by such increased competition.
 
Environmental Regulations — Future Environmental Regulations Could Place Additional Burdens on Our Manufacturing Operations.
 
The semiconductor packaging process uses chemicals, materials and gases and generates byproducts that are subject to extensive governmental regulations. For example, at our foreign facilities we produce liquid waste when silicon wafers are diced into chips with the aid of diamond saws, then cooled with running water. In addition, semiconductor packages have historically utilized metallic alloys containing lead (Pb) within the interconnect terminals typically referred to as leads, pins or balls. Federal, state and local regulations in the U.S., as well as international environmental regulations, impose various controls on the storage, handling, discharge and disposal of chemicals used in our production processes and on the factories we occupy and are increasingly imposing restrictions on the materials contained in semiconductor products.
 
Increasingly, public attention has focused on the environmental impact of semiconductor operations and the risk to neighbors of chemical releases from such operations and to the materials contained in semiconductor products. For example, the European Union’s recently enacted Directives on Waste Electrical and Electronic Equipment (“WEEE”), and Restriction of Use of Certain Hazardous Substances (“RoHS”) impose strict restrictions on the use of lead and other hazardous substances in electrical and electronic equipment. WEEE and RoHS became effective on July 1, 2006. In response to these directives, we have implemented changes in a number of our manufacturing processes in an effort to achieve RoHS compliance across all of our package types. Complying with existing and future environmental regulations may impose upon us the need for additional capital equipment or other process requirements, restrict our ability to expand our operations, disrupt our operations, subject us to liability or cause us to curtail our operations.
 
Intellectual Property — We May Become Involved in Intellectual Property Litigation.
 
We maintain an active program to protect our investment in technology by augmenting and enforcing our intellectual property rights. Intellectual property rights that apply to our various products and services include patents, copyrights, trade secrets and trademarks. We have filed and obtained a number of patents in the U.S. and
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abroad the duration of which varies depending on the jurisdiction in which the patent is filed. While our patents are an important element of our intellectual property strategy and our success as a whole, we are not materially dependent on any one patent or any one technology. 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.
 
Any patents we do obtain may be challenged, invalidated or circumvented and may not provide meaningful protection or other commercial advantage to us. The semiconductor industry is characterized by frequent claims regarding patent and other intellectual property rights. If any third party makes an enforceable infringement claim against us or our customers, we could be required to:

 	• 	discontinue the use of certain processes;	
 	 	 	
 	• 	cease to provide the services at issue;	
 	 	 	
 	• 	pay substantial damages;	
 	 	 	
 	• 	develop non-infringing technologies; or	
 	 	 	
 	• 	acquire licenses to the technology we had allegedly infringed.	
 
We may need to enforce our patents or other intellectual property rights or defend ourselves against claimed infringement of the rights of others through litigation, which could result in substantial cost and diversion of our resources. Furthermore, if we fail to obtain necessary licenses, our business could suffer. We are currently involved in three legal proceedings involving the acquisition of intellectual property rights, the enforcement of our existing intellectual property rights or the enforcement of the intellectual property rights of others. We refer you to the matters of  Tessera, Inc. v. Amkor Technology, Inc. ,  Amkor Technology, Inc. v. Motorola, Inc., and Amkor Technology, Inc. v. Carsem, et al. , which are described in more detail in Note 14 to the Consolidated Financial Statements included in this quarterly report. Unfavorable outcomes in one or more of these matters could result in significant liabilities and could have a material adverse effect on our financial condition, results of operations or cash flows. An unfavorable ruling or outcome could also have a negative impact on the trading price of our securities. The estimate of the potential impact from the legal proceedings referred to in this report on our financial condition, results of operations, or cash flows could change in the future.
 
Fire, Flood or Other Calamity — With Our Operations Conducted in a Limited Number of Facilities, a Fire, Flood or Other Calamity at one of Our Facilities Could Adversely Affect Us.
 
We conduct our packaging and test operations at a limited number of facilities. Significant damage or other impediments to any of these facilities, whether as a result of fire, weather, disease, civil strife, industrial strikes, breakdowns of equipment, difficulties or delays in obtaining materials and equipment, natural disasters, terrorist incidents, industrial accidents or other causes could temporarily disrupt or even shut down our operations, which would have a material adverse effect on our business, financial condition and results of operations. In the event of such a disruption or shutdown, we may be unable to reallocate production to other facilities in a timely or cost-effective manner (if at all) and may not have sufficient capacity to service customer demands in our other facilities. For example, our operations in Asia are vulnerable to regional typhoons that can bring with them destructive winds and torrential rains, which could in turn cause plant closures and transportation interruptions. In addition, some of the processes that we utilize in our operations place us at risk of fire and other damage. For example, highly flammable gases are used in the preparation of wafers holding semiconductor devices for flip-chip packaging. While we maintain insurance policies for various types of property, casualty and other risks, we do not carry insurance for all the above referred risks and with regard to the insurance we do maintain, we cannot assure you that it would be sufficient to cover all of our potential losses.
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SARS, Avian Flu and Other Contagious Diseases — Any Recurrence of SARS or Outbreak of Avian Flu or Other Contagious Disease May Have an Adverse Effect on the Economies and Financial Markets of Certain Asian Countries and May Adversely Affect Our Results of Operations.
 
In the first half of 2003, various countries encountered an outbreak of severe acute respiratory syndrome, or SARS, which is a highly contagious form of atypical pneumonia. In addition, there have been outbreaks of avian flu and other contagious diseases in various parts of the world. There is no guarantee that an outbreak of SARS, avian flu or other contagious disease will not occur again in the future (and maybe with much more widespread and devastating effects) and that any such future outbreak of SARS, avian flu or other contagious disease, or the measures taken by the governments of the affected countries against such potential outbreaks, will not seriously disrupt our production operations or those of our suppliers and customers, including by resulting in quarantines or closures. In the event of such a facility quarantine or closure, if we were unable to quickly identify alternate manufacturing facilities, this would have a material adverse effect on our financial condition and results of operations, as would the inability of our suppliers to continue to supply us and our customers continuing to purchase from us.
 
Continued Control By Existing Stockholders — Mr. James J. Kim and Members of His Family Can Substantially Control The Outcome of All Matters Requiring Stockholder Approval.
 
As of September 30, 2007, Mr. James J. Kim, our Chief Executive Officer and Chairman of the Board, and certain Family trusts beneficially owned approximately 45% of our outstanding common stock. This percentage includes beneficial ownership of the securities underlying our 6.25% convertible subordinated notes due 2013. Mr. James J. Kim’s family, acting together, have the ability to effectively determine matters (other than interested party transactions) submitted for approval by our stockholders by voting their shares, including the election of all of the members of our Board of Directors. There is also the potential, through the election of members of our Board of Directors, that Mr. Kim’s family could substantially influence matters decided upon by the Board of Directors. This concentration of ownership may also have the effect of impeding a merger, consolidation, takeover or other business consolidation involving us, or discouraging a potential acquirer from making a tender offer for our shares, and could also negatively affect our stock’s market price or decrease any premium over market price that an acquirer might otherwise pay.

Item 4.  	Submission of Matters to a Vote of Security Holders	
 
At our Annual Meeting of Stockholders held on August 6, 2007, the following proposals were adopted by the margins indicated.
 
1. Election of 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	 	 	144,065,179	 	 	 	25,252,541	 	
Roger A. Carolin	 	 	143,515,786	 	 	 	25,801,934	 	
Winston J. Churchill	 	 	107,254,566	 	 	 	62,063,154	 	
John F. Osborne	 	 	161,343,852	 	 	 	7,973,868	 	
John T. Kim	 	 	144,111,057	 	 	 	25,206,663	 	
Constantine N. Papadakis	 	 	138,200,667	 	 	 	31,117,053	 	
James W. Zug	 	 	140,212,851	 	 	 	29,104,869	 	

 	 	 	
2.	 	Approval of the 2007 Executive Incentive Bonus Plan. Votes totaled 149,794,366 for, 1,714,031 against, and 57,038 abstaining, with 17,752,285 broker non-votes.	
 	 	 	
3.	 	Approval of the 2007 Equity Incentive Plan. Votes totaled 90,789,793 for, 60,711,329 against, and 64,313 abstaining, with 17,752,285 broker non-votes.	
 	 	 	
4.	 	Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2007. Votes totaled 165,351,139 for, 3,920,222 against, and 46,359 abstaining.	

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Item 5.  Other Information
 
On November 7, 2007, our Board of Directors adopted amended and restated bylaws of Amkor (the “Bylaws”) effective as of the same date. The Bylaws were amended and restated to reflect, among other things, the following changes:

 	• 	Article I, Section 1.1 (Annual Meetings): This section was amended to clarify that annual meetings of stockholders may be held by means of remote communication.	
 	 	 	
 	• 	Article I, Section 1.2 (Special Meetings): This section was amended to clarify that special meetings of stockholders may be held by means of remote communication.	
 	 	 	
 	• 	Article I, Section 1.3 (Notice of Meetings): This section was amended to clarify that notice of stockholder meetings may be given by electronic transmission and, if so given, the manner in which notice by electronic transmission may be given.	
 	 	 	
 	• 	Article I, Section 1.4 (Nominations): This section was amended to modify the information and timing requirements for notice of director nominations to be brought before an annual or special meeting of stockholders. In the case of an annual meeting, for notice to be timely, it must be delivered not later than the ninetieth (90 th ) day nor earlier than the one hundred and twentieth (120 th ) day prior to the first anniversary of the preceding year’s annual meeting, provided that if the meeting is scheduled more than thirty (30) days prior to or sixty (60) days following such anniversary, then notice must be delivered no later than the tenth (10 th ) day following the earlier of mailing of notice of the meeting or public announcement thereof. In the case of a special meeting, where permitted, for notice to be timely, it must be delivered no later than the tenth (10 th ) day following the earlier of mailing of notice of the meeting or public announcement thereof. Additionally, the amended provision stipulates the information that must be included in the stockholder’s notice of any nominations.	
 	 	 	
 	• 	Article I, Section 1.5 (Notice of Stockholder Business (New)): This section was added to stipulate the information and timing requirements for notice of any business to be brought before a meeting of stockholders other than nominations for directors. For stockholder notice of business to be brought before an annual meeting, to be timely, such notice must be delivered not later than the ninetieth (90 th ) day nor earlier than the one hundred and twentieth (120 th ) day prior to the first anniversary of the preceding year’s annual meeting, provided that if the meeting is scheduled more than thirty (30) days prior to or sixty (60) days following such anniversary, then notice must be delivered no later than the tenth (10 th ) day following the earlier of mailing of notice of the meeting or public announcement thereof. Additionally, the new provision stipulates the information that must be included in the stockholder’s notice of any business to be brought before a meeting.	
 	 	 	
 	• 	Article I, Section 1.6 (Adjournments): This section was amended to clarify the power of the Chairman and the stockholders to adjourn a meeting of stockholders.	
 	 	 	
 	• 	Article I, Section 1.7 (Quorum): This section was amended to clarify the requisite vote required to adjourn a meeting of stockholders to the extent that a quorum is not present.	
 	 	 	
 	• 	Article I, Section 1.8 (Organization): This section was amended to clarify the manner and rules pursuant to which meetings of stockholders will be conducted.	
 	 	 	
 	• 	Article I, Section 1.10 (Remote Communication (New)): This section was added to clarify the manner by which stockholders may participate in a meeting of stockholders by means of remote communication.	
 	 	 	
 	• 	Article I, Section 1.11 (Fixing Date for Determination of Stockholders of Record): This section was amended to clarify the manner of setting a record date for actions of stockholders to be taken by written consent.	
 	 	 	
 	• 	Article I, Section 1.12 (List of Stockholders Entitled to Vote): This section was amended to modify the manner in which we shall make available to stockholders the list of Amkor’s stockholders in conjunction with a meeting of stockholders.	

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 	• 	Article II, Section 2.1 (Powers; Number; Qualifications): This section was amended to clarify the powers of the board of directors.	
 	 	 	
 	• 	Article II, Section 2.2 (Election; Resignation; Vacancies): This section was amended to clarify that directors shall hold office until his/her successor is elected and qualified or until such director’s earlier resignation or removal.	
 	 	 	
 	• 	Article II, Section 2.4 (Special Meetings): This section was amended to clarify the persons who may call a special meeting of the board of directors.	
 	 	 	
 	• 	Article IV, Section 4.1 (Executive Officers; Election; Qualifications; Term of Office; Resignation; Removal; Vacancies): This section was amended to clarify the authority of the board of directors to appoint executive officers of Amkor, the standing offices of Amkor unless otherwise determined by the board of directors and the power of the Chairman and the Chief Executive Officer, in their respective capacities, to appoint vice presidents of Amkor.	
 	 	 	
 	• 	Article V, Section 5.1 (Certificates): This section was amended to clarify Amkor’s authority to issue shares of stock in uncertificated form.	
 	 	 	
 	• 	Article VII, Section 7.6 (Amendment of Bylaws): This section was amended to stipulate that the Bylaws may be amended by an affirmative vote of a majority of the voting power entitled to vote thereon.	
 
The foregoing summary of the Bylaws is not complete and is qualified in its entirety by reference to the full text of the Bylaws, a copy of which is filed as Exhibit 3.1 to this report and incorporated herein by reference.
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Item 6.  	Exhibits	
 
The following exhibits are filed as part of this report:

Exhibit
	 	Description of
	
Number	 	Exhibit	
 	 	 	 	 	
 	3	.1	 	Restated Bylaws, amended and restated as of November 6, 2007.	
 	10	.1	 	2007 Executive Incentive Bonus Plan, incorporated by reference to the Current Report on Form 8-K filed with the Commission on August 10, 2007.	
 	10	.2	 	2007 Equity Incentive Plan, incorporated by reference to the Current Report on Form 8-K filed with the Commission on August 10, 2007.	
 	12	.1	 	Computation of Ratio of Earnings to Fixed Charges.	
 	31	.1	 	Certification of James J. Kim, Chief Executive Officer of Amkor Technology, Inc., pursuant to Rule 13a — 14(a) under the Securities Exchange Act of 1934.	
 	31	.2	 	Certification of Kenneth T. Joyce, Executive Vice President and Chief Financial Officer of Amkor Technology, Inc., pursuant to Rule 13a — 14(a) under the Securities Exchange Act of 1934.	
 	32	 	 	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	

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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
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer, Chief Accounting
Officer and Duly Authorized Officer)
 
Date: November 8, 2007
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EXHIBIT INDEX

Exhibit
	 	Description of
	
Number	 	Exhibit	
 	 	 	 	 	
 	3	.1	 	Restated Bylaws, amended and restated as of November 6, 2007.	
 	10	.1	 	2007 Executive Incentive Bonus Plan, incorporated by reference to the Current Report on Form 8-K filed with the Commission on August 10, 2007.	
 	10	.2	 	2007 Equity Incentive Plan, incorporated by reference to the Current Report on Form 8-K filed with the Commission on August 10, 2007.	
 	12	.1	 	Computation of Ratio of Earnings to Fixed Charges.	
 	31	.1	 	Certification of James J. Kim, Chief Executive Officer of Amkor Technology, Inc., pursuant to Rule 13a — 14(a) under the Securities Exchange Act of 1934.	
 	31	.2	 	Certification of Kenneth T. Joyce, Executive Vice President and Chief Financial Officer of Amkor Technology, Inc., pursuant to Rule 13a — 14(a) under the Securities Exchange Act of 1934.	
 	32	 	 	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	

 
Exhibit 3.1
RESTATED BYLAWS
OF
AMKOR TECHNOLOGY, INC.
(as of November 6, 2007)

 
TABLE OF CONTENTS
 	 	 	 	 	 	 	
 	 	 	 	Page	 	
 	 	 	 	 	 	 	
ARTICLE I STOCKHOLDERS	 	 	1	 	
1.1	 	ANNUAL MEETINGS	 	 	1	 	
1.2	 	SPECIAL MEETINGS	 	 	1	 	
1.3	 	NOTICE OF MEETINGS	 	 	1	 	
1.4	 	NOMINATIONS	 	 	2	 	
1.5	 	NOTICE OF STOCKHOLDER BUSINESS	 	 	3	 	
1.6	 	ADJOURNMENTS	 	 	4	 	
1.7	 	QUORUM	 	 	5	 	
1.8	 	ORGANIZATION	 	 	5	 	
1.9	 	VOTING; PROXIES	 	 	6	 	
1.10	 	REMOTE COMMUNICATION	 	 	6	 	
1.11	 	FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD	 	 	7	 	
1.12	 	LIST OF STOCKHOLDERS ENTITLED TO VOTE	 	 	7	 	
1.13	 	STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING	 	 	8	 	
ARTICLE II BOARD OF DIRECTORS	 	 	8	 	
2.1	 	POWERS; NUMBER; QUALIFICATIONS	 	 	8	 	
2.2	 	ELECTION; RESIGNATION; REMOVAL; VACANCIES	 	 	9	 	
2.3	 	REGULAR MEETINGS	 	 	9	 	
2.4	 	SPECIAL MEETINGS	 	 	9	 	
2.5	 	TELEPHONIC MEETINGS PERMITTED	 	 	9	 	
2.6	 	QUORUM; VOTE REQUIRED FOR ACTION	 	 	9	 	
2.7	 	ORGANIZATION	 	 	10	 	
2.8	 	BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING	 	 	10	 	
ARTICLE III COMMITTEES	 	 	10	 	
3.1	 	COMMITTEES	 	 	10	 	
3.2	 	COMMITTEE RULES	 	 	10	 	
ARTICLE IV OFFICERS	 	 	11	 	
4.1	 	EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES	 	 	11	 	
ARTICLE V STOCK	 	 	11	 	
5.1	 	CERTIFICATES	 	 	11	 	
5.2	 	LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF NEW CERTIFICATES	 	 	12	 	
-i-

 
TABLE OF CONTENTS
(Continued)
 	 	 	 	 	 	 	
 	 	 	 	Page	 	
 	 	 	 	 	 	 	
ARTICLE VI INDEMNIFICATION	 	 	12	 	
6.1	 	THIRD PARTY ACTIONS	 	 	12	 	
6.2	 	ACTIONS BY OR IN THE RIGHT OF THE CORPORATION	 	 	12	 	
6.3	 	SUCCESSFUL DEFENSE	 	 	13	 	
6.4	 	DETERMINATION OF CONDUCT	 	 	13	 	
6.5	 	PAYMENT OF EXPENSES IN ADVANCE	 	 	13	 	
6.6	 	INDEMNITY NOT EXCLUSIVE	 	 	13	 	
6.7	 	INSURANCE INDEMNIFICATION	 	 	13	 	
6.8	 	THE CORPORATION	 	 	14	 	
6.9	 	EMPLOYEE BENEFIT PLANS	 	 	14	 	
6.10	 	INDEMNITY FUND	 	 	14	 	
6.11	 	INDEMNIFICATION OF OTHER PERSONS	 	 	14	 	
6.12	 	SAVINGS CLAUSE	 	 	15	 	
6.13	 	CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES	 	 	15	 	
ARTICLE VII MISCELLANEOUS	 	 	15	 	
7.1	 	FISCAL YEAR	 	 	15	 	
7.2	 	SEAL	 	 	15	 	
7.3	 	WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND COMMITTEES	 	 	15	 	
7.4	 	INTERESTED DIRECTORS; QUORUM	 	 	16	 	
7.5	 	FORM OF RECORDS	 	 	16	 	
7.6	 	AMENDMENT OF BYLAWS	 	 	16	 	
-ii-

 
RESTATED BYLAWS
OF
AMKOR TECHNOLOGY, INC.
ARTICLE I
STOCKHOLDERS
     1.1 ANNUAL MEETINGS
     An annual meeting of stockholders shall be held for the election of directors at such date, time and place, either within or without the state of Delaware, as may be designated by resolution of the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting. In lieu of holding an annual meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote communication.
     1.2 SPECIAL MEETINGS
     Special meetings of stockholders for any purpose or purposes may be called at any time by the Board of Directors, or by a committee of the Board of Directors which has been duly designated by the Board of Directors and whose powers and authority, as expressly provided in a resolution of the Board of Directors, include the power to call such meetings. In lieu of holding a special meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any special meeting of stockholders may be held solely by means of remote communication.
     1.3 NOTICE OF MEETINGS
     Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present and in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the Certificate of Incorporation or these Bylaws, the written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. Notice to stockholders may be given by personal delivery, mail, or, with the consent of the stockholder entitled to receive notice, by facsimile or other means of electronic transmission. If mailed, such notice shall be deemed to be given when deposited in the mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation. Notice given by electronic transmission pursuant to this subsection shall be deemed given: (1) if by facsimile telecommunication, when directed to a facsimile telecommunication

 
number at which the stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (3) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the Secretary or an Assistant Secretary, the transfer agent or other agent of the corporation that the notice has been given by personal delivery, by mail, or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
     1.4 NOMINATIONS
     Only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors of the corporation. Nominations of persons for election to the Board of Directors of the corporation may be made at a meeting of stockholders at which directors are to be elected (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who is a stockholder of record at the time of giving of notice provided for in this Section 1.4, who shall be entitled to vote for the election of directors at the meeting and who complies with the notice procedures set forth in this Section 1.4.
     Nominations by stockholders shall be made pursuant to timely notice in writing to the Secretary of the corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the corporation (a) in the case of an annual meeting, not later than the close of business on the ninetieth (90 th  ) calendar day, nor earlier than the close of business on the one hundred and twentieth (120 th  ) calendar day, prior to the first anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is advanced more than thirty (30) calendar days prior to, or delayed by more than sixty (60) calendar days after, the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be received not later than the close of business on the tenth (10 th ) calendar day following the earlier of the day on which notice of the date of the meeting was first mailed or public disclosure of the date of the meeting was first made, and (b) in respect of nominations to be brought before a special meeting, where permitted, notice by the stockholder to be timely must be so delivered not later than the close of business on the tenth (10 th ) calendar day following the earlier of the day on which notice of the date of the meeting was first mailed or public disclosure of the date of the meeting was first made. Such stockholder’s notice shall set forth (i) (A) the name, age, business address and residence address of each proposed nominee, (B) the principal occupation of each proposed nominee, (C) a representation that the notifying stockholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (D) if known, the class and total number of shares of the corporation that are beneficially owned by the proposed nominee, (E) the total number of shares of the corporation that will be voted by the notifying stockholder for each proposed nominee, (F) a description of all arrangements or understandings between the notifying stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the notifying stockholder, and (G) as to each proposed nominee all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required,
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in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, applicable listing standards and other applicable law (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected and including information as to the purpose of such nomination); and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (A) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (B) the class and number of shares of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner and (C) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to elect the nominee and/or (y) otherwise to solicit proxies from stockholders in support of such nomination. At the request of the Board of Directors, any person nominated by a stockholder for election as a director shall furnish to the Secretary of the corporation that information required to be set forth in a stockholder’s notice of nomination which pertains to the nominee. The corporation may request any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the qualifications of the proposed nominee to serve as a director of the corporation.
     No person shall be eligible to serve as a director of the corporation unless nominated in accordance with the procedures set forth in this Section 1.4. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by this Section 1.4, and if the Chairman of the meeting should so determine, shall so declare to the meeting and the defective nomination shall be disregarded. Any such decision by the Chairman of the meeting shall be final, binding and conclusive upon all parties in interest. In addition to the foregoing provisions of this Section 1.4, a stockholder shall also comply with and shall be subject to all applicable requirements and provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, applicable listing standards and other applicable law, with respect to the matters set forth in this Section 1.4.
     1.5 NOTICE OF STOCKHOLDER BUSINESS
     At an annual or special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (i) pursuant to the corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) as to an annual meeting, by any stockholder of the corporation who is a stockholder of record at the time of giving of the notice provided for in this Section 1.5, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this Section 1.5.
     For business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of the immediately preceding paragraph of this Section 1.5, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation, and any such proposed business must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the corporation not
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later than the close of business on the ninetieth (90th) calendar day, nor earlier than the close of business on the one hundred and twentieth (120 th ) calendar day, prior to the first anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is advanced more than thirty (30) calendar days prior to, or delayed by more than sixty (60) calendar days after, the first anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the tenth (10 th ) calendar day following the earlier of the day on which notice of the date of the meeting was first mailed or public disclosure of the date of the meeting was first made. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, and if a specific action is to be proposed, the text of the resolution or resolutions which the stockholder proposes that the corporation adopt, (ii) the name and address, as they appear on the corporation’s books, of the stockholder proposing such business, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (iii) the class and number of shares of the corporation which are owned beneficially and of record by such stockholder of record and by the beneficial owner, if any, on whose behalf the proposal is made, (iv) any material interest of such stockholder of record and the beneficial owner, if any, on whose behalf the proposal is made in such business, (v) a representation that the stockholder intends to appear in person or by proxy at the meeting to bring before the meeting the business specified in the notice, (vi) the total number of shares of the corporation that will be voted by the notifying stockholder for such proposal, and (vii) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to approve or adopt the proposal and/or (y) otherwise to solicit proxies from stockholders in support of such proposal.
     Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at an annual or special meeting except in accordance with the procedures set forth in Section 1.5. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the procedures prescribed by this Section 1.5, and if the Chairman of the meeting should so determine, shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Any such decision by the Chairman shall be final, binding and conclusive upon all parties in interest. In addition to the foregoing provisions of this Section 1.5, a stockholder shall also comply with and be subject to all applicable requirements and provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, applicable listing standards and other applicable law, with respect to the matters set forth in this Section 1.5.
     1.6 ADJOURNMENTS
     Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the date, time and place if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting
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the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. The Chairman of the meeting shall have the power to adjourn any meeting of stockholders for any reason and the stockholders shall have the power to adjourn any meeting of stockholders by a majority vote of the shares present at such meeting in accordance with this Section 1.6.
     1.7 QUORUM
     Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a quorum, the stockholders so present may, by majority vote of shares present, adjourn the meeting from time to time in the manner provided in Section 1.6 of these Bylaws until a quorum shall attend. Shares of its own stock belonging to the corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
     1.8 ORGANIZATION
     Meetings of stockholders shall be presided over by (a) the Chairman of the Board of Directors or, in the absence thereof, (b) any director or officer of the corporation designated by the Board of Directors. In the absence of the Secretary of the corporation, the secretary of the meeting shall be such person as the Chairman of the meeting appoints.
     The Board of Directors shall, in advance of any meeting of stockholders, appoint one (1) or more inspector(s), who may include individual(s) who serve the corporation in other capacities, including without limitation as officers, employees or agents, to act at the meeting of stockholders and make a written report thereof. The Board may designate one (1) or more persons as alternate inspector(s) to replace any inspector, who fails to act. If no inspector or alternate has been appointed or is able to act at a meeting of stockholders, the Chairman of the meeting shall appoint one (1) or more inspector(s) to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector(s) or alternate(s) shall have the duties prescribed pursuant to Section 231 of the Delaware General Corporation Law or other applicable law.
     The Board of Directors shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations, if any, the Chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all acts as, in the judgment of such Chairman of the
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meeting, are necessary, appropriate or convenient for the proper conduct of the meeting, including without limitation establishing an agenda of business of the meeting, rules or regulations to maintain order, restrictions on entry to the meeting after the time fixed for commencement thereof and the fixing of the date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at a meeting (and shall announce such at the meeting).
     1.9 VOTING; PROXIES
     Except as otherwise provided by the Certificate of Incorporation or by law, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the corporation. Voting at meetings of stockholders need not be by written ballot and need not be conducted by inspectors of election unless so determined by the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote thereon which are present in person or by proxy at such meeting.
     At a stockholders’ meeting at which directors are to be elected, a stockholder shall not be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the number of votes which such stockholder normally is entitled to cast). The candidates receiving the highest number of affirmative votes, up to the number of directors to be elected, shall be elected; votes against any candidate and votes withheld shall have no legal effect.
     1.10 REMOTE COMMUNICATION
     For the purposes of these Bylaws, if authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders may, by means of remote communication:
            (A) participate in a meeting of stockholders; and
            (B) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the corporation shall implement reasonable measures to provide
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such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation.
     1.11 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD
     In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date: (1) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting; (2) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than ten (10) days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (3) in the case of any other action, shall not be more than sixty (60) days prior to such other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action of the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
     1.12 LIST OF STOCKHOLDERS ENTITLED TO VOTE
     The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either (a) on a reasonably accessible electronic network, provided that the
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information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the corporation, or to vote in person or by proxy at any meeting of stockholders.
     1.13 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
     Unless otherwise provided in the certificate of incorporation, any action required by this chapter to be taken at any annual or special meeting of stockholders of a corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
     Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. If the action which is consented to is such as would have required the filing of a certificate under any section of the Delaware General Corporation Law if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written notice and written consent have been given as provided in Section 228 of the Delaware General Corporation Law.
ARTICLE II
BOARD OF DIRECTORS
     2.1 POWERS; NUMBER; QUALIFICATIONS
     The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors. In addition to the power and authorities these Bylaws expressly confer upon them, the Board of Directors may exercise all such powers of the corporation and do all such lawful acts and things as are not required by statute, the Certificate of Incorporation or these Bylaws to be exercised or done by the stockholders. The Board of Directors shall consist of one or more members, the number thereof to be determined from time to time by resolution of the Board of Directors. Directors need not be stockholders.
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     2.2 ELECTION; RESIGNATION; VACANCIES
     The Board of Directors shall initially consist of the persons named as directors in the Certificate of Incorporation, and each director so elected shall hold office until the first annual meeting of stockholders or until his successor is elected and qualified. At the first annual meeting of stockholders and at each annual meeting thereafter, the stockholders shall elect directors each of whom shall hold office until his successor is elected and qualified or until such director’s earlier resignation or removal. Any director may resign at any time upon written notice to the corporation. Any newly created directorship or any vacancy occurring in the Board of Directors for any cause may be filled by a majority of the remaining members of the Board of Directors, although such majority is less than a quorum, or by a sole remaining director, or by a plurality of the votes cast at a meeting of stockholders, and each director so elected shall hold office until the expiration of the term of office of the director whom he has replaced or until his successor is elected and qualified.
     2.3 REGULAR MEETINGS
     Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board of Directors may from time to time determine, and if so determined notices thereof need not be given.
     2.4 SPECIAL MEETINGS
     Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chief Executive Officer, President, Chief Financial Officer, or by any member of the Board of Directors. Notice of a special meeting of the Board of Directors shall be given by the person or persons calling the meeting at least twenty-four hours before the special meeting.
     2.5 TELEPHONIC MEETINGS PERMITTED
     Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Bylaw shall constitute presence in person at such meeting.
     2.6 QUORUM; VOTE REQUIRED FOR ACTION
     At all meetings of the Board of Directors a majority of the whole Board of Directors shall constitute a quorum for the transaction of business. Except in cases in which the Certificate of Incorporation or these Bylaws otherwise provide, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
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     2.7 ORGANIZATION
     Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in his absence by the Vice Chairman of the Board, if any, or in their absence by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
     2.8 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
     Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or such committee.
ARTICLE III
COMMITTEES
     3.1 COMMITTEES
     The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it.
     3.2 COMMITTEE RULES
     Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business.
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ARTICLE IV
OFFICERS
 	4.1	 	EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES	
               (a) Unless otherwise determined by the Board of Directors, the officers of the corporation shall consist of a chief executive officer, a president, a chief financial officer, one or more vice presidents, a secretary, one or more assistant secretaries, a treasurer or one or more assistant treasurers as are elected by the Board of Directors and such other officers as the Board of Directors may determine, who will be elected in such manner and hold their offices for such terms as the Board of Directors may prescribe. Each such officer shall hold office until the first meeting of the Board of Directors after the annual meeting of stockholders next succeeding his election, and until his successor is elected and qualified or until his earlier resignation or removal. Any officer may resign at any time upon written notice to the corporation. The Board of Directors may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the corporation. Any number of offices may be held by the same person. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting.
               (b) In addition to officers elected by the Board of Directors, the corporation may have one or more appointed vice presidents. Such appointed vice presidents may be appointed by the Board of Directors, the chairman of the Board of Directors or the chief executive officer and will have such duties as may be established by the Board of Directors, the chairman of the Board of Directors or the chief executive officer.
ARTICLE V
STOCK
     5.1 CERTIFICATES
     Shares of stock of the corporation may be certificated or uncertificated as provided by the Delaware General Corporation Law. Every holder of stock, upon written request, shall be entitled to have a certificate signed by or in the name of the corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or the President or Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the corporation, certifying the number of shares owned by him in the corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer
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agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.
 	5.2	 	LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF NEW CERTIFICATES	
     The corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.
ARTICLE VI
INDEMNIFICATION
     6.1 THIRD PARTY ACTIONS
     The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director or officer of the corporation, or that such director or officer is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (collectively “Agent”), against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of  nolo contendere  or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
     6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION
     The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was an Agent (as defined in Section 6.1) against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and
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except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.
     6.3 SUCCESSFUL DEFENSE
     To the extent that an Agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.
     6.4 DETERMINATION OF CONDUCT
     Any indemnification under Sections 6.1 and 6.2 (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that the indemnification of the Agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 6.1 and 6.2. Such determination shall be made (1) by the Board of Directors or an executive committee by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders.
     6.5 PAYMENT OF EXPENSES IN ADVANCE
     Expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Article VI.
     6.6 INDEMNITY NOT EXCLUSIVE
     The indemnification and advancement of expenses provided or granted pursuant to the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.
     6.7 INSURANCE INDEMNIFICATION
     The corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was an Agent of the corporation, or is or was serving at the request of the
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corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article VI.
     6.8 THE CORPORATION
     For purposes of this Article VI, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors and officers, so that any person who is or was a director or Agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under and subject to the provisions of this Article VI (including, without limitation, the provisions of Section 6.4) with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
     6.9 EMPLOYEE BENEFIT PLANS
     For purposes of this Article VI, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this Article VI.
     6.10 INDEMNITY FUND
     Upon resolution passed by the Board of Directors, the corporation may establish a trust or other designated account, grant a security interest or use other means (including, without limitation, a letter of credit), to ensure the payment of certain of its obligations arising under this Article VI and/or agreements which may be entered into between the corporation and its officers and directors from time to time.
     6.11 INDEMNIFICATION OF OTHER PERSONS
     The provisions of this Article VI shall not be deemed to preclude the indemnification of any person who is not an Agent (as defined in Section 6.1), but whom the corporation has the power or obligation to indemnify under the provisions of the Delaware General Corporation Law or otherwise. The corporation may, in its sole discretion, indemnify an employee, trustee or other agent as
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permitted by the Delaware General Corporation Law. The corporation shall indemnify an employee, trustee or other agent where required by law.
     6.12 SAVINGS CLAUSE
     If this Article or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each Agent against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit, proceeding or investigation, whether civil, criminal or administrative, and whether internal or external, including a grand jury proceeding and an action or suit brought by or in the right of the corporation, to the full extent permitted by any applicable portion of this Article that shall not have been invalidated, or by any other applicable law.
 	6.13	 	CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES	
     The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VI shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
ARTICLE VII
MISCELLANEOUS
     7.1 FISCAL YEAR
     The fiscal year of the corporation shall be determined by resolution of the Board of Directors.
     7.2 SEAL
     The corporate seal shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors.
     7.3 WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND COMMITTEES
     Any written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice. If such a waiver is given
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by electronic transmission, the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder.
     7.4 INTERESTED DIRECTORS; QUORUM
     No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
     7.5 FORM OF RECORDS
     Any records maintained by the corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.
     7.6 AMENDMENT OF BYLAWS
     These Bylaws may be amended, altered or repealed, and new Bylaws adopted, by (i)  the Board of Directors or (ii) the stockholders upon the affirmative vote of a majority of the voting power of the shares of capital stock entitled to vote thereon.
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Exhibit 12.1
AMKOR TECHNOLOGY, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratio data)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Nine Months	 	
 	 	Year Ended December 31,	 	 	Ended September 30,	 	
 	 	2002	 	 	2003	 	 	2004	 	 	2005	 	 	2006	 	 	2007	 	
Earnings	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes, minority interests and discontinued operations	 	$	(825,403	)	 	$	(55,833	)	 	$	(28,868	)	 	$	(145,288	)	 	$	182,494	 	 	$	137,486	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity Investment losses	 	 	(208,165	)	 	 	(3,290	)	 	 	(2	)	 	 	(55	)	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes, equity investment losses, minority interests and discontinued operations	 	 	(617,238	)	 	 	(52,543	)	 	 	(28,866	)	 	 	(145,233	)	 	 	182,494	 	 	 	137,486	 	
Interest expense	 	 	143,441	 	 	 	138,775	 	 	 	145,897	 	 	 	163,125	 	 	 	160,909	 	 	 	102,742	 	
Amortization of debt issuance costs	 	 	8,251	 	 	 	7,428	 	 	 	6,182	 	 	 	7,948	 	 	 	7,250	 	 	 	4,137	 	
Interest portion of rent	 	 	4,995	 	 	 	5,463	 	 	 	5,928	 	 	 	6,215	 	 	 	5,583	 	 	 	4,972	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	(460,551	)	 	$	99,123	 	 	$	129,141	 	 	$	32,055	 	 	$	356,236	 	 	$	249,337	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed Charges	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	 	$	143,441	 	 	$	138,775	 	 	$	145,897	 	 	$	163,125	 	 	$	160,909	 	 	$	102,742	 	
Amortization of debt issuance costs	 	 	8,251	 	 	 	7,428	 	 	 	6,182	 	 	 	7,948	 	 	 	7,250	 	 	 	4,137	 	
Interest portion of rent	 	 	4,995	 	 	 	5,463	 	 	 	5,928	 	 	 	6,215	 	 	 	5,583	 	 	 	4,972	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	156,687	 	 	$	151,666	 	 	$	158,007	 	 	$	177,288	 	 	$	173,742	 	 	$	111,851	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ratio of earnings to fixed charges	 	 	—x	1	 	 	—x	1	 	 	—x	1	 	 	—x	1	 	 	2.05	 	 	 	2.23	 	

 	 	 	
(1)	 	The ratio of earnings to fixed charges was less than 1:1 for 2005. In order to achieve a ratio of earnings to fixed charges of 1:1, we would have had to generate an additional $145.2 million of earnings in 2005. The ratio of earnings to fixed charges was less than 1:1 for the year ended December 31, 2004. In order to achieve a ratio of earnings to fixed charges of 1:1, we would have had to generate an additional $28.9 million of earnings for the year ended December 31, 2004. The ratio of earnings to fixed charges was less than 1:1 for the year ended December 31, 2003. In order to achieve a ratio of earnings to fixed charges of 1:1, we would have had to generate an additional $52.5 million of earnings in the year ended December 31, 2003. The ratio of earnings to fixed charges was less than 1:1 for the year ended December 31, 2002. In order to achieve a ratio of earnings to fixed charges of 1:1, we would have had to generate an additional $617.2 million of earnings in the year ended December 31, 2002.	

 
Exhibit 31.1
SECTION 302(a) CERTIFICATION
I, James J. Kim, certify that:
1.	 	I have reviewed this quarterly report on Form 10-Q of Amkor Technology, Inc.;	
 	 	 	
2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 	 	 	
3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 	 	 	
4.	 	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:	

 	a)	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 	 	 	 	
 	b)	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 	 	 	 	
 	c)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 	 	 	 	
 	d)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.	

5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

 	a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 	 	 	 	
 	b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.	

November 8, 2007 	/s/ JAMES J. KIM  	 	
 	James J. Kim 	 	
 	Chief Executive Officer 	 	

 
 	 	 	 	 	
Exhibit 31.2
SECTION 302(a) CERTIFICATION
I, Kenneth T. Joyce, certify that:
1.	 	I have reviewed this quarterly report on Form 10-Q of Amkor Technology, Inc.;	
 	 	 	
2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 	 	 	
3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 	 	 	
4.	 	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

 	a)	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 	 	 	 	
 	b)	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 	 	 	 	
 	c)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 	 	 	 	
 	d)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.	

5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

 	a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 	 	 	 	
 	b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.	

November 8, 2007 	/s/ KENNETH T. JOYCE  	 	
 	 	 	 	 	
 	Kenneth T. Joyce 	 	
 	Executive Vice President and
Chief Financial Officer 	 	

 
 	 	 	 	 	
Exhibit 32
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
     In connection with the quarterly report of Amkor Technology, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James J. Kim, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 	(1)	 	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and	
 	 	 	 	
 	(2)	 	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

November 8, 2007 	/s/ JAMES J. KIM  	 	
 	James J. Kim 	 	
 	Chief Executive Officer 	 	
 	
     In connection with the quarterly report of Amkor Technology, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth T. Joyce, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 	(1)	 	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and	
 	 	 	 	
 	(2)	 	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

November 8, 2007 	/s/ KENNETH T. JOYCE  	 	
 	Kenneth T. Joyce 	 	
 	Executive Vice President and
Chief Financial Officer