1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 26, 1998
REGISTRATION NO. 333-49645
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 2
TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMKOR TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE                             3674                            23-1722724
(STATE OR OTHER JURISDICTION OF      (PRIMARY STANDARD INDUSTRIAL             (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)      CLASSIFICATION CODE NUMBER)           IDENTIFICATION NUMBER)

AMKOR TECHNOLOGY, INC.
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

FRANK J. MARCUCCI
CHIEF FINANCIAL OFFICER
AMKOR TECHNOLOGY, INC.
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

Copies to:
LARRY W. SONSINI, ESQ.
DONNA M. PETKANICS, ESQ.
BRUCE M. MCNAMARA, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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PROSPECTUS

LOGO

Amkor Technology, Inc.
Common Stock

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This Prospectus relates to shares of common stock, par value $.001 per
share (the "Common Stock"), of Amkor Technology, Inc., a Delaware corporation
("Amkor" or the "Company") which may be offered and sold by Smith Barney Inc.
("Salomon Smith Barney") in connection with market-making activities in the
Company's 5 3/4% Convertible Subordinated Notes due 2003 (the "Convertible
Notes").

Salomon Smith Barney may, subject to certain limitations, from time to time
borrow Common Stock from certain stockholders of the Company to settle short
sales of Common Stock (or to return Common Stock previously borrowed by Salomon
Smith Barney to settle such short sales) entered into by Salomon Smith Barney to
hedge any long position in the Convertible Notes resulting from market-making
activities. Such sales by Salomon Smith Barney will be made on the Nasdaq
National Market or in the over-the-counter market at market prices prevailing at
the time of sale or at prices related to such market prices. Salomon Smith
Barney is obligated to return such borrowed shares of Common Stock, and shares
that have been so returned may be reborrowed and sold. The total number of
shares borrowed at any time may not exceed 7,000,000. See "Plan of
Distribution." Salomon Smith Barney is not under any obligation to engage in any
market-making transactions with respect to the Convertible Notes, and any
market-making in the Convertible Notes actually engaged in by Salomon Smith
Barney may cease at any time.

The Common Stock is listed for trading on the Nasdaq National Market under
the symbol "AMKR." On August 24, 1998, the last sale price of the Common Stock
on the Nasdaq National Market was $5 7/8 per share.

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF SHARES OF COMMON STOCK.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

August 26, 1998

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ADDITIONAL INFORMATION

The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports and other information with the
Securities and Exchange Commission (the "Commission"). The Company has filed
with the Commission a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules filed as a part thereof, as permitted by the rules and
regulations of the Commission. For further information with respect to the
Company and the Common Stock, reference is hereby made to such Registration
Statement, including the exhibits and schedules filed as a part thereof.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete and where such
contract or other document is an exhibit to the Registration Statement, each
such statement is qualified in all respects by the provisions of such exhibit,
to which reference is hereby made for a full statement of the provisions
thereof. The Registration Statement, including the exhibits and schedules filed
as a part thereof, may be inspected without charge at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and will also be available for inspection
and copying at the regional offices of the Commission located at Seven World
Trade Center, 13th Floor, New York, New York 10048 and at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
these documents may be obtained at prescribed rates from the Public Reference
Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington. D.C. 20549. The Commission maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of the Commission's Web site is http://www.sec.gov. Information concerning the
Company is available for inspection at the offices of the Nasdaq National
Market, Reports Section, 1735 K Street, N.W., Washington, D.C. 20006.

PowerQuad(R) and SuperBGA(R) are registered trademarks of the Company and
ChipArray(TM), fleXBGA(TM) and PowerSOP(TM) are trademarks of the Company.
MicroBGA(TM) is a trademark of Tessera, Inc. This Prospectus includes other
trademarks and trade names of the Company and other entities.

CERTAIN PERSONS PARTICIPATING IN THE INITIAL PUBLIC OFFERING BY THE COMPANY
OF THE COMMON STOCK AND THE CONVERTIBLE NOTES MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK OR THE
CONVERTIBLE NOTES, INCLUDING PURCHASES OF SUCH SECURITIES TO STABILIZE THEIR
MARKET PRICE, PURCHASES OF SUCH SECURITIES TO COVER SOME OR ALL OF A SHORT
POSITION IN SUCH SECURITIES MAINTAINED BY THE UNDERWRITERS OF SUCH OFFERING AND
THE IMPOSITION OF PENALTY BIDS.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information found elsewhere in this Prospectus, including under "Risk Factors"
and the Consolidated Financial Statements and Notes thereto. Certain statements
contained in "Prospectus Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business,"
including statements regarding the anticipated growth in the market for the
Company's products, the Company's anticipated capital expenditures and financing
needs, the Company's expected capacity utilization rates, the belief of the
Company as to its future operating performance, and other statements contained
in this Prospectus that are not historical facts, are "forward-looking"
statements within the meaning of the U.S. federal securities laws. Because such
statements include risks and uncertainties, actual results may differ materially
from those anticipated in such forward-looking statements as a result of certain
factors, including those set forth in "Risk Factors," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business."
These forward-looking statements are made as of the date of this Prospectus and
the Company assumes no obligation to update such forward-looking statements or
to update the reasons why actual results could differ materially from those
anticipated in such forward-looking statements

THE COMPANY

Amkor is the world's largest independent provider of semiconductor
packaging and test services. The Company believes that it is also one of the
leading developers of advanced semiconductor packaging and test technology in
the industry. The Company offers a complete and integrated set of packaging and
test services including integrated circuit ("IC") package design, leadframe and
substrate design, IC package assembly, final testing, burn-in, reliability
testing, and thermal and electrical characterization. As of June 30, 1998, the
Company had in excess of 150 customers, including many of the largest
semiconductor companies in the world. Such customers include, among others,
Advanced Micro Devices, Inc., International Business Machines Corp., Intel
Corporation, Lucent Technologies, Inc., Motorola, Inc., National Semiconductor
Corp., Philips Electronics N.V., SGS-THOMSON Microelectronics N.V., Siemens AG
and Texas Instruments, Inc. ("TI").

Today, nearly all of the world's major semiconductor companies outsource
some or all of their packaging and test needs. The increasing complexities,
investment requirements and time to market pressures associated with IC design
and production, combined with the growth in the number of ICs being produced and
sold, are driving increasing demand for independent packaging and test services.

The Company provides packaging and test services through its three
factories in the Philippines as well as four factories of Anam Semiconductor,
Inc. ("ASI") in Korea pursuant to a supply agreement between the Company and
ASI. The Company and ASI have had a long-standing relationship. In 1996, 1997
and the six months ended June 30, 1998, approximately 72%, 68% and 67%,
respectively, of the Company's revenues were derived from sales of services
performed for the Company by ASI. In addition, substantially all of the revenues
of ASI in 1996, 1997 and the six months ended June 30, 1998 were derived from
services sold by the Company. Mr. James Kim, the Company's Chairman and Chief
Executive Officer, is a director of ASI, and he and other members of his family
beneficially own approximately 40.7% of ASI's outstanding common stock. The
Company expects that the businesses of the Company and ASI will continue to
remain highly interdependent by virtue of their supply relationship, overlaps
and family ties between their respective shareholders and management, financial
relationships, coordination of product and operation plans, joint research and
development activities and shared intellectual property rights.

The Company recently began offering wafer fabrication services through
ASI's new deep submicron CMOS foundry capable of producing 15,000 8" wafers per
month. Through a strategic relationship with TI, the Company and ASI have
qualified .25 micron CMOS process technology, and TI has agreed to provide to
ASI .18 micron CMOS process technology during 1998. ASI's foundry will primarily
manufacture DSPs, ASICs and other logic devices. By leveraging the Company's
leading position in semiconductor packaging and test services, the new wafer
fabrication services have enabled the Company to become one of the first
providers of a fully integrated, turnkey semiconductor fabrication, packaging
and test service solution.
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The Company's strategy is to: (i) maintain its product technology
leadership by continuing to design and produce leading-edge packaging
technology; (ii) maintain advanced manufacturing capabilities through continuous
advancement and refinement of its process technology; (iii) leverage the scale
and scope of its packaging and test capabilities to provide Amkor with several
competitive advantages, including procurement of key materials and manufacturing
equipment, the ability to capitalize on economies of scale and the ability to
offer an industry-leading breadth of product offerings; (iv) establish industry
packaging standards to bolster sales of leading-edge, high margin and high
growth product lines; (v) enhance customer and supplier relationships; (vi)
continue to focus on customer support; and (vii) provide an integrated, turnkey
solution comprised of wafer fabrication, packaging and test services.

The Company was organized under the laws of Delaware in September 1997 to
consolidate the ownership of several affiliated entities in the same business
and under common management. See "Reorganization." The Company's principal
executive offices are located at 1345 Enterprise Drive, West Chester, PA 19380
and its telephone number at that address is (610) 431-9600.

THE INITIAL PUBLIC OFFERING

On April 30, 1998, the Company commenced the initial public offering of
35,000,000 shares of Common Stock (5,000,000 of which were offered by James Kim,
a stockholder of the Company (the "Selling Stockholder")) at a price to the
public of $11.00 per share and $180,000,000 aggregate principal amount of
Convertible Notes (the "Initial Public Offering"). In connection with the
Initial Public Offering, the Company granted the underwriters of the Initial
Public Offering (the "Underwriters") 30-day options to purchase up to 5,250,000
additional shares of Common Stock and $27,000,000 additional principal amount of
Convertible Notes solely to cover over-allotments, if any. These options were
exercised in full by the Underwriters. As a result, the Company sold an
aggregate of 35,250,000 shares of Common Stock and $207,000,000 of Convertible
Notes in the Initial Public Offering. Salomon Smith Barney was a representative
of the Underwriters.

The net proceeds to the Company from the Initial Public Offering were
approximately $559,757,500, after deducting the underwriting discounts and
estimated offering expenses. The Company did not receive any proceeds from the
sale of the shares of Common Stock offered by the Selling Stockholders.

Approximately $154 million of the net proceeds to the Company from the
Initial Public Offering were used to repay certain bank loans, which, prior to
the Initial Public Offering, had outstanding balances of $43 million, $50
million and $61 million. These loans were due May 1998, October 2000 and April
2001, respectively, and accrued interest annually at rates equal to 7.16%, 6.78%
and 6.68%, respectively, at December 31, 1997, which rates represent LIBOR plus
a spread. The $43 million loan was incurred in August 1997 in order to redeem
$40 million of Floating Rate Notes issued by Amkor/Anam Pilipinas, Inc., a
subsidiary of the Company ("AAP"), and to repay certain short-term debt.

Approximately $102 million of the net proceeds to the Company from the
Initial Public Offering were used to repay numerous short-term bank loans
incurred primarily to finance capital expenditures for the Company's P1 factory
in the Philippines and for working capital. All of these loans were due within
12 months of December 31, 1997 and bore interest at rates ranging from 8.0% to
12.2%. In addition, approximately $8 million of the net proceeds were used to
repay two term loans of approximately $3 million and $5 million. These loans are
due September 1999 and January 2001, respectively, and accrue interest annually
at rates equal to 9.09% and 11.88%, respectively, at December 31, 1997, which
rates represent LIBOR plus a spread.

An additional approximately $34 million of the net proceeds to the Company
were used to purchase ASI's 40% interest in AAP. Approximately $86 million of
the net proceeds were used to repay all of the amounts due to Anam USA, Inc., a
wholly-owned subsidiary of ASI ("AUSA"). The remaining $176 million of such net
proceeds will be used for capital expenditures and working capital. Pending such
uses, the net proceeds to the Company of the Initial Public Offering have been
invested in investment grade, interest-bearing securities.

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USE OF PROCEEDS

This Prospectus relates to the offer and sale of shares of Common Stock
whereby Salomon Smith Barney may, subject to certain limitations, from time to
time borrow from Mr. James Kim and his wife, Mrs. Agnes Kim ("Mr. and Mrs.
Kim"), to settle short sales of Common Stock (or to return Common Stock
previously borrowed by Salomon Smith Barney to settle such short sales) entered
into by Salomon Smith Barney to hedge any long position in the Convertible Notes
resulting from its market-making activities. See "Plan of Distribution." The
Company will not receive any proceeds from the sale of the Common Stock to which
this Prospectus relates.

RISK FACTORS

See "Risk Factors" beginning on page 7 for a discussion of certain factors
that should be considered by potential investors.

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SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)

SIX MONTHS
YEAR ENDED DECEMBER 31,                      ENDED JUNE 30,
--------------------------------------------------------   -------------------
1993       1994       1995        1996         1997        1997       1998
--------   --------   --------   ----------   ----------   --------   --------
(UNAUDITED)

INCOME STATEMENT DATA:
Net revenues..................  $442,101   $572,918   $932,382   $1,171,001   $1,455,761   $663,490   $756,457
Gross profit..................    70,778     58,270    149,047      148,923      213,092     76,948    129,295
Operating income..............    26,374     13,843     84,855       71,368      100,841     26,168     67,646
Net income(1).................    17,236     11,574     61,932       32,922       43,281      3,878     29,603
Pro forma adjustment for
income taxes(2).............     2,900        200     10,400        2,900        3,613      2,700       (828)
Pro forma net income(2).......    14,336     11,374     51,532       30,022       39,668      1,178     30,431
Basic and diluted pro forma
net income per common
share.......................       .17        .14        .62          .36          .48        .01        .32
Shares used in per share
calculation.................    82,610     82,610     82,610       82,610       82,610     82,610     94,323

DECEMBER 31, 1997    JUNE 30, 1998
-----------------    -------------
(UNAUDITED)

BALANCE SHEET DATA:
Cash and cash equivalents.................................      $  90,917          $170,461
Working capital (deficit).................................        (38,219)          168,428
Total assets..............................................        855,592           947,419
Short-term borrowings and current portion of long-term
debt....................................................        167,317            32,973
5 3/4% Convertible Subordinated Notes due 2003............             --           207,000
Due to AUSA (non-current).................................        149,776                --
Other long-term debt......................................        196,934            18,120
Stockholders' equity......................................         90,875           445,486

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(1) Net income for 1997 reflects a $17.3 million loss related primarily to the
impairment of value of the Company's equity interest in ASI. This investment
was sold in 1998. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 6 of Notes to Consolidated
Financial Statements.

(2) Prior to the reorganization of the Company, Amkor Electronics, Inc. ("AEI"),
a predecessor of the Company, elected to be taxed as an S Corporation under
the Internal Revenue Code of 1986 and comparable state tax laws.
Accordingly, AEI did not recognize any provision for federal income tax
expense during the periods presented herein. The pro forma adjustment for
income taxes reflects the additional U.S. federal income taxes which would
have been recorded by the Company if AEI had not been an S Corporation
during these periods. See "Reorganization" and Note 1 of Notes to
Consolidated Financial Statements.

Capitalized terms used in this summary have the meanings ascribed to such
terms elsewhere in this Prospectus. Unless the context otherwise requires, all
references in this Prospectus to the "Company" or "Amkor" are to Amkor
Technology, Inc. and its subsidiaries. Prior to the Reorganization (as defined
under "Reorganization"), such subsidiaries were under common management and were
in the same business. As a result, the financial statements presented herein
have been prepared on a combined basis for periods which ended prior to the
Reorganization and prepared on consolidated basis for periods which ended
subsequent to the Reorganization. Unless otherwise indicated, all information in
this Prospectus gives effect to (i) the Reorganization which was consummated on
April 29, 1998, including the issuance of 82,610,000 shares of Common Stock in
connection therewith, and (ii) the Initial Public Offering and the application
of the net proceeds therefrom. See "-- The Initial Public Offering,"
"Reorganization," "Description of Capital Stock" and Note 1 of Notes to
Consolidated Financial Statements. References in this Prospectus to "Korea" are
to the Republic of Korea, and references to "won" or "W" are to the currency of
the Republic of Korea. The won has depreciated significantly against the U.S.
dollar and other foreign currencies in recent months. On August 13, 1998, the
base rate under the market average exchange rate system, as announced by the
Korea Financial Telecommunications and Clearings Institute in Seoul, Korea (the
"Market Average Exchange Rate"), was W1,324 to $1.00. No representation is made
that the won or U.S. dollar amounts referred to herein could have been or could
be converted into U.S. dollars or won, as the case may be, at any particular
rate or at all. Financial information for ASI contained in this Prospectus has
been prepared on the basis of Korean generally accepted accounting principles
("GAAP"), which differ in certain significant respects from U.S. GAAP.

Certain technical terms used throughout this Prospectus are defined in the
Glossary appearing immediately prior to the Consolidated Financial Statements at
the end of this Prospectus.

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RISK FACTORS

Prospective investors should consider carefully the following risk factors,
in addition to the other information contained in this Prospectus concerning the
Company and its business, before purchasing the shares of Common Stock or the
Convertible Notes offered hereby. Certain statements contained in "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business," including statements
regarding the anticipated growth in the market for the Company's products, the
Company's anticipated capital expenditures and financing needs, the Company's
expected capacity utilization rates, the belief of the Company as to its future
operating performance and other statements contained in this Prospectus that are
not historical facts, are "forward-looking" statements within the meaning of the
U.S. federal securities laws. Because such statements include risks and
uncertainties, actual results may differ materially from those anticipated in
such forward-looking statements as a result of certain factors, including those
set forth herein and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business." These forward-looking
statements are made as of the date of this Prospectus and the Company assumes no
obligation to update such forward-looking statements or to update the reasons
why actual results could differ materially from those anticipated in such
forward-looking statements.

FLUCTUATIONS IN OPERATING RESULTS; DECLINES IN AVERAGE SELLING PRICES

The Company's operating results have varied significantly from period to
period. A variety of factors could materially and adversely affect the Company's
revenues, gross profit and operating income, or lead to significant variability
of quarterly or annual operating results. These factors include, among others,
the cyclical nature of both the semiconductor industry and the markets addressed
by end-users of semiconductors, the short-term nature of its customers'
commitments, timing and volume of orders relative to the Company's production
capacity, changes in capacity utilization, evolutions in the life cycles of
customers' products, rescheduling and cancellation of large orders, rapid
erosion of packaging selling prices, availability of manufacturing capacity,
allocation of production capacity between the Company's facilities and those of
ASI, fluctuations in package and test service charges paid to ASI, changes in
costs, availability and delivery times of labor, raw materials and components,
effectiveness in managing production processes, fluctuations in manufacturing
yields, changes in product mix, product obsolescence, timing of expenditures in
anticipation of future orders, availability of financing for expansion, changes
in interest expense, the ability to develop and implement new technologies on a
timely basis, competitive factors, changes in effective tax rates, the loss of
key personnel or the shortage of available skilled workers, international
political or economic events, currency and interest rate fluctuations,
environmental events, and intellectual property transactions and disputes.
Unfavorable changes in any of the above factors may adversely affect the
Company's business, financial condition and results of operations. In addition,
the Company increases its level of operating expenses and investment in
manufacturing capacity based on anticipated future growth in revenues. If the
Company's revenues do not grow as anticipated and the Company is not able to
decrease its expenses, the Company's business, financial condition and operating
results would be materially and adversely affected. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

Beginning in 1997 and continuing through the current quarter of 1998,
intense competition and a general slowdown in the semiconductor industry
worldwide resulted in decreases in the average selling prices of many of the
Company's products. The Company expects that average selling prices for its
services will continue to decline in the future. A decline in average selling
prices of the Company's services, if not offset by reductions in the cost of
producing those services or by a shift to higher margin products, would decrease
the Company's gross margins and could materially and adversely affect the
Company's business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

DEPENDENCE ON THE HIGHLY CYCLICAL SEMICONDUCTOR AND PERSONAL COMPUTER INDUSTRIES

The Company's business is substantially affected by market conditions in
the semiconductor industry, which is highly cyclical and, at various times, has
been subject to significant economic downturns character-
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ized by reduced product demand, rapid erosion of average selling prices and
production overcapacity. In addition, the markets for semiconductors are
characterized by rapid technological change, evolving industry standards,
intense competition and fluctuations in end-user demand. Because the Company's
business will be dependent on the requirements of semiconductor companies for
independent packaging, test and wafer fabrication services for the foreseeable
future, any future downturn in the semiconductor industry could have a material
adverse effect on the Company's business, financial condition and results of
operations. The Company's operating results for 1996, 1997 and the first six
months of 1998 were adversely affected by a downturn in the semiconductor
market. In addition, a significant portion of the Company's net revenues from
packaging and test services depends on the packaging and testing of
semiconductors used in personal computer ("PC") products. The PC industry is
subject to intense competition, is highly volatile and is subject to significant
shifts in demand. As a result, any deterioration of business conditions in the
PC industry could have a material adverse effect on the Company. See
"Business -- Industry Background" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

DEPENDENCE ON RELATIONSHIP WITH ASI; POTENTIAL CONFLICTS OF INTEREST

ASI was founded in 1956 by Mr. H. S. Kim, who currently serves as the
honorary Chairman and a Representative Director of ASI. ASI is a member of the
Anam group of companies (the "Anam Group"), consisting principally of companies
in Korea in the electronics industries. The management of ASI and the other
companies in the Anam Group are influenced to a significant degree by the family
of H. S. Kim, which, together with the Company, collectively owned approximately
40.7% of the outstanding common stock of ASI as of December 31, 1997. A
significant portion of the shares owned by the Kim family are leveraged and as a
result of this, or for other reasons, the family's ownership could be
substantially reduced. James Kim, the founder of the Company and currently its
Chairman and Chief Executive Officer, is the eldest son of H. S. Kim. Since
January 1992, in addition to his other responsibilities, James Kim has been
serving as acting Chairman of the Anam Group and a director of ASI. Mr. In-Kil
Hwang, the President and a Representative Director of ASI, is the brother-in-law
of James Kim. In addition, four other members of Mr. Kim's family are on the
13-member Board of Directors of ASI. After the Initial Public Offering, James
Kim and members of his family beneficially owned approximately 65.8% of the
outstanding Common Stock of the Company, and Mr. Kim and other members of his
family will continue to exercise significant control over the Company. See
"-- Benefits of the Initial Public Offering to Existing Stockholders; Continued
Control by Existing Stockholders" and "Principal Stockholders."

The businesses of the Company and ASI have been interdependent for many
years. In 1996, 1997 and the six months ended June 30, 1998, approximately 72%,
68% and 67%, respectively, of the Company's revenues were derived from sales of
services performed for the Company by ASI. In addition, substantially all of the
revenues of ASI in 1996, 1997 and the six months ended June 30, 1998 were
derived from services sold by the Company. The Company expects the proportion of
its revenues derived from sales of services performed for the Company by ASI and
the proportion of ASI's revenues from services sold by the Company to increase
from the Company's sales of the wafer fabrication output of ASI's new wafer
foundry. In the event the ability of ASI to supply the Company were disrupted
for any reason, the Company's facilities in the Philippines would be able to
fill only a small portion of the resulting shortfall in packaging and test
capacity and none of the shortfall in wafer fabrication capacity. In addition,
there are currently no significant third party suppliers of packaging and test
services and no qualified third party supplier of wafer fabrication services
from which the Company could fill its orders. As a result, the Company's
business, financial condition and operating results will continue to be
significantly dependent on the ability of ASI to effectively provide contracted
services on a cost-efficient and timely basis. The Company expects that the
business of the Company and ASI will continue to remain highly interdependent by
virtue of their supply relationship, family ties between their respective
shareholders and management, financial relationships, coordination of product
and operation plans, joint research and development activities and shared
intellectual property rights. The termination or disruption of the Company's
relationship with ASI for any reason, or the insolvency of ASI or any material
adverse change in ASI's business resulting from underutilization of its
capacity, the level of its debt and its guarantees of affiliate debt, labor
disruptions, fluctuations in foreign exchange rates, changes in governmental
policies,

8

10

economic or political conditions in Korea or any other change, could have a
material adverse effect on the Company's business, financial condition and
results of operations.

The Company has recently entered into new supply agreements with ASI (the
"Supply Agreements"). Under the Supply Agreements, ASI has granted to the
Company a first right to substantially all of the packaging and test services
capacity of ASI and the exclusive right to all of the wafer output of its new
wafer foundry. The Company expects to continue to purchase substantially all of
ASI's packaging and test services, and to purchase all of ASI's wafer output,
under the Supply Agreements. Under the Supply Agreements, pricing arrangements
relating to packaging and test services provided by ASI to the Company are
subject to quarterly review and adjustment, and such arrangements relating to
the wafer output provided by ASI to the Company are subject to annual review and
adjustment, in each case on the basis of factors such as changes in the
semiconductor market, forecasted demand, product mix, capacity utilization and
fluctuations in exchange rates, as well as the mutual long-term strategic
interests of the Company and ASI. Although the Company and ASI agreed to reduce
the price paid by the Company for packaging and test services beginning in the
second quarter of 1998, there can be no assurance that any new pricing
arrangements resulting from such review and adjustment will be favorable to the
Company. Pursuant to long-standing arrangements between ASI and the Company's
operating subsidiaries, sales from ASI to the Company will continue to be made
through AUSA, a wholly-owned financing subsidiary of ASI. Under the Supply
Agreements, the Company will continue to reimburse AUSA for the financing costs
incurred by it in connection with trade financing provided to the Company. The
Supply Agreements also provide that Amkor-Anam, Inc., a subsidiary of the
Company, will continue to provide raw material procurement and related services
to ASI on a fee basis. The Supply Agreements have a five-year term and may be
terminated by any party thereto upon five years' written notice at any time
after the expiration of such initial five-year term. There can be no assurance
that ASI will not terminate either Supply Agreement upon the expiration of such
initial term or, if it does terminate a Supply Agreement, that the Company will
be able to obtain a new agreement with ASI on terms that are favorable to the
Company or at all.

ASI's ability to continue to provide services to the Company will depend on
ASI's financial condition and performance. ASI currently has a significant
amount of debt relative to its equity, which debt the Company expects will
continue to increase in the foreseeable future. The Company is advised that ASI,
as a public company in Korea, has published its most recent consolidated
financial statements as of and for the year ended December 31, 1997. These
consolidated financial statements are prepared on the basis of Korean GAAP,
which differs significantly from U.S. GAAP. U.S. GAAP financial statements are
not available. The independent auditor's report regarding ASI, included
elsewhere in this Prospectus, includes an explanatory

9

11

paragraph regarding change in accounting principles, the impact of the Korean
economic situation on ASI and its ability to continue as a going concern.

1996            1997
----------    --------------
(IN MILLIONS)

INCOME STATEMENT DATA:
Sales.....................................................  W1,338,718      W1,786,457
Cost of sales.............................................   1,096,117       1,507,271
----------      ----------
Gross profit..............................................     242,601         279,186
Selling and administrative expenses.......................      77,754         103,158
----------      ----------
Operating income..........................................     164,847         176,028
Non-operating income:
Interest and dividend income............................      38,569          47,592
Foreign exchange gains..................................      10,420         122,507
Other...................................................       9,268          11,196
----------      ----------
58,257         181,295
----------      ----------
Non-operating expenses:
Interest expenses.......................................     138,657         160,658
Amortization of deferred charges........................       2,861          33,891
Foreign exchange losses.................................      39,792         339,204
Loss from forward contract..............................          --          94,644
Other...................................................       9,962          20,639
----------      ----------
191,272         649,036
----------      ----------
Ordinary income (loss)....................................      31,832        (291,713)
Extraordinary gains.......................................         447             774
Extraordinary losses......................................      11,072           1,812
----------      ----------
Net income (loss) before income taxes.....................      21,207        (292,751)
Income taxes..............................................      17,363           7,922
----------      ----------
Net income (loss) after income taxes......................       3,844        (300,673)
Minority interests in losses (earnings) of consolidated
subsidiaries, net.......................................      (8,569)          1,206
Amortization of consolidation adjustments, net............      (5,326)         (3,009)
Equity in earnings (losses) of unconsolidated
equity-method subsidiaries and investees, net...........         666         (46,253)
----------      ----------
Net loss..................................................   W  (9,385)     W (348,729)
==========      ==========
SUMMARY BALANCE SHEET DATA:
Cash and bank deposits....................................   W 324,139       W 215,024
Accounts and notes receivable, net........................     170,724         189,522
Inventory.................................................     214,494         260,302
Other current assets......................................     145,302         241,965
----------      ----------
Total current assets....................................     854,659         906,813
----------      ----------
Property, plant and equipment, net........................     994,931       2,159,466
Investments...............................................      83,715         121,880
Long-term accounts receivable.............................     198,251         203,739
Long-term loans...........................................         747         258,322
Other long-term assets....................................      92,985         285,810
----------      ----------
Total long-term assets..................................   1,370,629       3,029,217
----------      ----------
Total assets.......................................  W2,225,288      W3,936,030
==========      ==========
Short-term borrowings.....................................   1,050,405       1,720,916
Current maturities of long-term debt......................      85,252         120,913
Other current liabilities.................................     190,989         282,653
----------      ----------
Total current liabilities...............................   1,326,646       2,124,482
----------      ----------
Long-term debt, net of current maturities.................     475,045         736,784
Long-term capital lease obligations.......................     106,068         861,813
Other long-term liabilities...............................      67,672         111,017
----------      ----------
Total long-term liabilities.............................     648,785       1,709,614
----------      ----------
Total liabilities..................................   1,975,431       3,834,096
----------      ----------
Minority interests........................................      21,600          25,160
Stockholders' equity......................................     228,257          76,774
----------      ----------
Total liabilities and stockholders' equity.........  W2,225,288      W3,936,030
==========      ==========

10

12

A significant amount of the current and long-term liabilities of ASI are
denominated in U.S. dollars and other foreign currencies. At December 31, 1997,
the amount of U.S. dollar and other foreign currency denominated short-term
borrowings, current maturities of long-term debt, long-term debt (net of current
maturities) and long-term capital lease obligations were W1,222 billion, W59
billion, W159 billion and W834 billion, respectively. Due in part to the
significant depreciation of the won (for example, from a Market Average Exchange
Rate of W884 to $1.00 on December 31, 1996 to W1,415 to $1.00 on December 31,
1997 and W1,324 to $1.00 on August 13, 1998) resulting from the recent economic
crisis in Korea, ASI's liabilities in won terms and its leverage calculated in
won have significantly increased in 1997. The effect of this depreciation on
ASI, however, has been mitigated by the fact that substantial amounts of ASI's
revenues are denominated in U.S. dollars. The increase in ASI's liabilities was
also attributable in part to additional financing obtained in connection with
the construction of its new wafer foundry. See "-- Risks Associated with New
Wafer Fabrication Business" and Note 6 of Notes to Consolidated Financial
Statements.

The recent economic crisis in Korea has also led to sharply higher interest
rates in Korea and reduced opportunities for refinancing or refunding maturing
debts as financial institutions in Korea, which are experiencing financial
difficulties, are increasingly looking to limit their lending, particularly to
highly leveraged companies, and to increase their reserves and provisions for
non-performing assets. These developments will result in higher interest rates
on loans to ASI and have otherwise made it more difficult for ASI to obtain new
financing. In addition, ASI has obtained a significant amount of financing
through arrangements obtained by AUSA. As an overseas subsidiary of ASI, AUSA
was formed with the approval of the Bank of Korea. If the Bank of Korea were to
withdraw such approval, or if AUSA otherwise ceased operations for any reason,
ASI would be required to meet their financing needs through alternative
arrangements. Therefore, there can be no assurance that ASI will be able to
refinance its existing loans or obtain new loans, or continue to make required
interest and principal payments on such loans or otherwise comply with the terms
of its loan agreements. Any inability of ASI to obtain financing or generate
cash flow from operations sufficient to fund its capital expenditure, debt
service and repayment and other working capital and liquidity requirements could
have a material adverse effect on ASI's ability to continue to provide services
and otherwise fulfill its obligations to the Company. See "-- Dependence on
International Operations and Sales; Concentration of Operations in the
Philippines and Korea."

As of December 31, 1997, ASI and its consolidated subsidiaries were
contingently liable under guarantees in respect of debt of ASI's
non-consolidated subsidiaries and affiliates in the Anam Group in the aggregate
amount of approximately W857 billion. As of such date, ASI had provided
guarantees for all of AUSA's debt of $319 million, $176 million of bank loans
made to one of the Company's subsidiaries and the Company's obligations under a
receivables sales arrangement. Prior to the Initial Public Offering, the Company
met a significant portion of its financing needs through financing arrangements
obtained by AUSA for the benefit of the Company based on guarantees provided by
ASI. The Company currently does not depend on such financing arrangements. In
addition, if any relevant subsidiaries or affiliates of ASI, certain of which
may have greater exposure to domestic Korean economic conditions than ASI, were
to fail to make interest or principal payments or otherwise default under their
debt obligations guaranteed by ASI, ASI could be required under its guarantees
to repay such debt, which event could have a material adverse effect on its
financial condition and results of operations.

Historically, ASI has undertaken capacity expansion programs and other
capital expenditures primarily on the basis of forecasts of the Company and
business plans prepared jointly with the Company. The Supply Agreements
generally provide for continued capital investment by ASI based on the Company's
forecasts and operational plans prepared jointly by the Company and ASI
reflecting such forecasts. However, as a result of the recent deterioration of
the Korean economy, there can be no assurance that ASI will be able to fund
future capacity expansions and other capital investments required to supply the
Company with necessary packaging and test services and wafer output on a timely
and cost-efficient basis.

The Company and ASI have historically cooperated on the development of new
package designs and packaging and testing processes and technologies. The Supply
Agreements generally provide for continued cooperation between the Company and
ASI in research and development, as well as the cross-licensing of intellectual
property rights between the Company and ASI. If the Company's relationship with
ASI were
11

13

terminated for any reason, the Company's research and development capabilities
and intellectual property position could be materially and adversely affected.

The Company will continue to be controlled to a significant degree by James
Kim and members of his family for the foreseeable future, and Mr. Kim and other
members of his family will also continue to exercise significant influence over
the management of ASI and its affiliates. In addition, the Company and ASI will
continue to have certain contractual and other business relationships, including
under the Supply Agreements, and may engage in transactions from time to time
that are material to the Company. For example, on July 21, 1998 the Company
entered into a prepayment agreement with ASI relating to assembly and test
services. In accordance with the agreement, the Company made a $50 million
non-interest bearing advance to ASI, representing approximately one month's
charges for assembly and test services. The Company will offset this advance
against billings by ASI for assembly and test services provided in the fourth
quarter of 1998. Additionally, in connection with its wafer foundry agreement
with TI, the Company and TI agreed to revise certain payment and other terms
contained in the Master Purchase Agreement. As part of this revision, TI agreed
to advance ATI $20 million in June 1998 as a prepayment of wafer foundry
services to be provided in the fourth quarter of 1998. The Company has recorded
this amount in accrued expenses. The Company in turn advanced these funds to ASI
as a prepayment for foundry service charges. The Company will offset the advance
to ASI against billings by ASI in the fourth quarter of 1998. Under the terms of
the revision to the Master Purchase Agreement, the Company is ultimately
responsible to reimburse TI for any inability of ASI to comply with the terms of
the agreement. Although any such material agreements and transactions would
require approval of the Company's Board of Directors, such transactions
generally will not require any additional approval by a separate committee
comprised of the disinterested members of the Board of Directors and conflicts
of interest may arise in certain circumstances. There can be no assurance that
such conflicts will not from time to time be resolved against the interests of
the Company. The Company currently has six directors, four of whom are
disinterested. Under Delaware corporate law, each director owes a duty of
loyalty and care to the Company, which if breached can result in personal
liability for the directors. In addition, the Company may agree to certain
changes in its contractual and other business relationships with ASI, including
pricing, manufacturing allocation, capacity utilization and capacity expansion,
among others, which in the judgment of the Company's management will result in
reduced short-term profitability for the Company in favor of potential long-term
benefits to the Company and ASI. There can be no assurance that the Company's
business, financial condition or results of operations will not be adversely
affected by any such decision.

DEPENDENCE ON INTERNATIONAL OPERATIONS AND SALES; CONCENTRATION OF OPERATIONS IN
THE PHILIPPINES AND KOREA

All of the production facilities currently used to fill the Company's
orders are located in the Philippines and Korea and many of the Company's
customers' operations are located in countries outside of the United States. A
substantial portion of the Company's revenues are derived from sales to
customers located outside of the United States. In 1996, 1997 and the six months
ended June 30, 1998, sales to such customers accounted for 27%, 28% and 29%,
respectively, of the Company's revenues. The Company expects sales outside of
the United States to continue to represent a significant portion of its future
revenues. As a result, the Company's business will continue to be subject to
certain risks generally associated with doing business abroad, such as foreign
governmental regulations, currency fluctuations, political unrest, disruptions
or delays in shipments, currency controls and fluctuations, changes in local
economic conditions and import and export controls, as well as changes in tax
laws, tariffs and freight rates. The Company has structured its global
operations to take advantage of lower tax rates in certain countries and tax
incentives extended to encourage investment. The Company's tax returns through
1993 in the Philippines and through 1994 in the U.S. have been examined by the
Philippine and U.S. tax authorities, respectively. The recorded provisions for
subsequent open years are subject to changes upon examination by tax authorities
of tax returns for these years. Changes in the mix of income from the Company's
foreign subsidiaries, expiration of tax holidays and changes in tax laws and
regulations could result in increased effective tax rates for the Company. See
Notes 1 and 10 of Notes to Consolidated Financial Statements.

12

14

Philippines

The Company's results of operations and growth will be influenced by the
political situation in the Philippines and by the general state of the
Philippine economy. Although the political and economic situation in the
Philippines has stabilized in recent years, it has historically been subject to
significant instability. Most recently, the devaluation of the Philippine peso
relative to the U.S. dollar beginning in July 1997 has led to instability in the
Philippine economy. Any future economic or political disruptions or instability
or low economic growth in the Philippines could have a material adverse effect
on the Company's business, financial condition and results of operations.
Because the functional currency of the Company's Philippine operations is the
U.S. dollar, the Company has recently benefitted from cost reductions relating
to peso denominated expenditures, primarily payroll costs. The Company believes
that such devaluation of the Philippine peso will eventually lead to inflation
in the Philippines, which could offset any savings achieved to date.

Korea

In 1996, 1997 and the six months ended June 30, 1998, approximately 72%,
68% and 67%, respectively, of the Company's revenues were derived from sales of
services performed for the Company by ASI. The operations of ASI are subject to
certain risks. Relations between Korea and the Democratic People's Republic of
Korea ("North Korea") have been tense over most of Korea's history. Incidents
affecting relations between the two Koreas continually occur. No assurance can
be given that the level of tensions with North Korea will not increase or change
abruptly as a result of current or future events, which could have a material
adverse effect on ASI's, and as a result the Company's, business, financial
condition and results of operations.

Since the beginning of 1997, Korea has experienced a significant increase
in the number and size of companies filing for corporate reorganization and
protection from their creditors. Such failures were caused by, among other
factors, excessive investments, high levels of indebtedness, weak export prices
and the Korean government's greater willingness to allow troubled corporations
to fail. As a result of such corporate failures, Korea's financial institutions
have experienced a sharp increase in non-performing loans and certain Korean
banks have ceased operations. In addition, declines in domestic stock prices
have reduced the value of Korean banks' assets. These developments have led
international credit rating agencies to downgrade the credit ratings of Korea,
as well as various companies (including ASI) and financial institutions in
Korea.

During the same period, the value of the won relative to the U.S. dollar
has depreciated significantly. The Market Average Exchange Rate as of August 13,
1998 was W1,324 to $1.00, as compared to the December 31, 1996 Market Average
Exchange Rate of W884 to $1.00. Such depreciation of the won relative to the
U.S. dollar has increased the cost of imported goods and services, and the value
in won of Korea's public and private sector debt denominated in U.S. dollars and
other foreign currencies has also increased significantly. Korea's foreign
currency reserves also have declined significantly. Such developments have also
led to sharply higher domestic interest rates and reduced opportunities for
refinancing or refunding maturing debts as financial institutions in Korea,
which are experiencing financial difficulties, are increasingly looking to limit
their lending, in particular to highly leveraged companies, and to increase
their reserves and provisions for non-performing assets.

In order to address the liquidity crisis and the deteriorating economic
situation in Korea, the Korean government concluded an agreement with the
International Monetary Fund on December 3, 1997 pursuant to which Korea is
eligible to receive loans and other financial support reported to amount to an
aggregate of approximately $58 billion (the "IMF Financial Aid Package").
Because there are conditions on the availability of loans and other financial
support under the IMF Financial Aid Package, there can be no assurance that such
conditions will be satisfied or that such loans and other financial support will
be available. In connection with the IMF Financial Aid Package, the Korean
government announced a comprehensive policy package (the "Reform Policy")
intended to address the structural weaknesses in the Korean economy and the
financial sector. While the Reform Policy is intended to alleviate the current
economic crisis in Korea and improve the Korean economy over time, the immediate
effects could include, among others, slower economic growth, a reduction in the
availability of credit to Korean companies, an increase in interest rates, an
increase in taxes, an increased rate of inflation due to the depreciation of the
won, an increase in the number of

13

15

bankruptcies of Korean companies, labor unrest and labor strikes resulting from
a possible increase in unemployment, and political unrest. These events could
have a material adverse effect on the Korean economy. Moreover, there can be no
assurance that either the IMF Financial Aid Package or the Reform Policy will be
successful. In addition, there can be no assurance that political pressure will
not force the Korean government to retreat from some or all of its announced
Reform Policy or that the Reform Policy will be implemented as currently
contemplated.

The Korean government has stated that as of December 31, 1997 the total
amount of Korea's private and governmental external liabilities was $154.4
billion under IMF standards. As of December 31, 1997, the total amount of
foreign currency reserves held by Korea was $20.4 billion, of which the usable
portion (the total less amounts on deposit with overseas branches of Korean
financial institutions and swap positions between the Korean central bank and
other central banks) was $8.9 billion. Pursuant to an exchange offer concluded
in April 1998, the Korean financial institutions exchanged approximately $21.8
billion of their short-term foreign currency debt for longer term floating rate
loans guaranteed by the Korean government. In addition, the Korean government
raised approximately $4 billion through an international offering of its debt
securities in April 1998. Korean financial institutions and the Korean corporate
and public sectors continue to carry substantial amounts of debt denominated in
currencies other than the won, including short-term debt, and there can be no
assurance that there will be sufficient foreign currency reserves to repay this
debt or that this debt can be extended or refinanced.

Such recent and potential future developments relating to Korea, including
the continued deterioration of the Korean economy, could have a material adverse
effect on ASI's and the Company's business, financial condition and results of
operations. See "-- Dependence on Relationship with ASI; Potential Conflicts of
Interest," "Business -- Marketing and Sales" and "-- Facilities and
Manufacturing" and Note 14 of Notes to Consolidated Financial Statements.

CUSTOMER CONCENTRATION; ABSENCE OF BACKLOG

Due to the concentration of market share in the semiconductor industry, the
Company has been largely dependent on a small group of customers for a
substantial portion of its business. In 1995, 1996, 1997 and the six months
ended June 30, 1998, 34.1%, 39.2%, 40.1% and 34.7%, respectively, of the
Company's net revenues were derived from sales to the Company's top five
customers, with 13.3%, 23.5%, 23.4% and 19.4% of the Company's net revenues,
respectively, derived from sales to Intel Corporation ("Intel"). The ability of
the Company to maintain close, satisfactory relationships with such customers is
important to the ongoing success and profitability of its business. The Company
expects that it will continue to be dependent upon a relatively limited number
of customers for a significant portion of its net revenues in future periods.
None of the Company's customers is presently obligated to purchase any amount of
packaging or test services or to provide the Company with binding forecasts of
product purchases for any period. In addition, the Company's new wafer
fabrication business will be significantly dependent upon TI. The reduction,
delay, or cancellation of orders from one of the Company's significant
customers, including Intel for packaging and test services or TI for wafer
fabrication services, could materially and adversely affect the Company's
business, financial condition and results of operations. Although the Company
has received a commitment from TI which indicate that TI will meet its minimum
purchase obligation during the second half of 1998, during the first half of
1998 TI's orders were below such minimum purchase commitment due to market
conditions and issues encountered by TI in the transition of its products to .18
micron technology. There can be no assurance that TI will meet its purchase
obligations in the second half of 1998 or in the future. In addition, there can
be no assurance that such customers will not reduce, cancel or delay orders. See
"-- Dependence on the Highly Cyclical Semiconductor and Personal Computer
Industries" and "-- Risks Associated with New Wafer Fabrication Business."

All of the Company's customers operate in the cyclical semiconductor
business and may vary order levels significantly from period to period. In
addition, there can be no assurance that such customers or any other customers
will continue to place orders with the Company in the future at the same levels
as in prior periods. From time to time, semiconductor companies have experienced
reduced prices for some products, as well as delays or cancellations in orders.
There can be no assurance that, should these circumstances occur in the future,
they will not adversely affect the Company's business, financial condition and
results of operations. The
14

16

loss of one or more of the Company's customers, or reduced orders by any of its
key customers, could adversely affect the Company's business, financial
condition and results of operations. The Company's packaging and test business
does not typically operate with any material backlog, and the Company expects
that in the future the Company's packaging and test revenues in any quarter will
continue to be substantially dependent upon orders received in that quarter. The
Company's expense levels are based in part on its expectations of future
revenues and the Company may be unable to adjust costs in a timely manner to
compensate for any revenue shortfall. See "Business -- Marketing and Sales."

EXPANSION OF MANUFACTURING CAPACITY; PROFITABILITY AFFECTED BY CAPACITY
UTILIZATION RATES

The Company believes that its competitive position depends substantially on
its ability to expand its manufacturing capacity. Accordingly, although the
Company currently has available manufacturing capacity, the Company expects to
continue to make significant investments to expand such capacity, particularly
through the acquisition of capital equipment and the training of new personnel.
There can be no assurance that the Company will be able to utilize such capacity
or to continue to expand its manufacturing capacity in a timely manner, that the
cost of such expansion will not exceed management's current estimates or that
such capacity will not exceed the demand for the Company's services. In
addition, expansion of the Company's manufacturing capacity will continue to
significantly increase its fixed costs, and the Company expects to continue to
incur substantial additional depreciation and other expenses in connection with
the acquisition of new equipment and the construction of new facilities.
Increases or decreases in capacity utilization rates can have a significant
effect on gross margins since the unit cost of packaging and test services
generally decreases as fixed charges are allocated over a larger number of units
produced. Therefore, the Company's ability to maintain or enhance its gross
margins will continue to be dependent, in part, on its ability to maintain high
capacity utilization rates.

Capacity utilization rates may be affected by a number of factors and
circumstances, including overall industry conditions, operating efficiencies,
the level of customer orders, mechanical failure, disruption of operations due
to expansion of operations or relocation of equipment, fire or natural
disasters, employee strikes or work stoppages or other circumstances. Although
the Company has been able to maintain a high rate of capacity utilization in
recent years as a result of its close association with its customers, its
knowledge of the semiconductor market conditions, and its continued improvements
in operating efficiencies and equipment maintenance, there can be no assurance
that this high utilization rate will be sustained in the future. The Company's
inability to generate the additional orders necessary to fully utilize its
capacity would have a material adverse effect on the Company's business,
financial condition and results of operations. For example, in 1996 the
Company's capacity utilization rates were negatively affected by an unexpected
downturn in the semiconductor industry. There can be no assurance that the
Company's utilization rates will not be adversely affected by future declines in
the semiconductor industry or for any other reason. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and
"Business -- Manufacturing and Facilities."

LIQUIDITY AND FUTURE CAPITAL REQUIREMENTS

The Company plans to continue to incur substantial costs to fund its
equipment and facilities expansion plans and its packaging technology
development. The Company believes that its existing cash balances, cash flow
from operations, available equipment lease financing and bank borrowings, will
be sufficient to meet its projected capital expenditures, working capital and
other cash requirements for at least the next twelve months. There can be no
assurance, however, that lower than expected revenues, increased expenses,
increased costs associated with the purchase or maintenance of capital
equipment, decisions to increase planned capacity or other events will not cause
the Company to seek more capital, or capital sooner than currently expected. The
timing and amount of the Company's actual capital requirements cannot be
precisely determined and will depend on a number of factors, including demand
for the Company's services, availability of capital equipment, fluctuations in
foreign currency exchange rates, changes in semiconductor industry conditions
and competitive factors. There can be no assurance that additional financing
will be available when needed or, if available, will be available on
satisfactory terms. Failure to obtain any such financing could have

15

17

a material adverse effect on the Company. In addition, if the Company obtains
such financing by selling equity securities of the Company, the Company's
stockholders may experience significant dilution. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

RAPID TECHNOLOGICAL CHANGE; PRODUCT DEVELOPMENT

The semiconductor packaging and test industry is characterized by rapid
increases in the diversity and complexity of semiconductor packaging products.
As a result, the Company expects that it will need to offer, on an ongoing
basis, more advanced package designs in order to respond to competitive industry
conditions and customer requirements. The requirement to develop and maintain
advanced packaging capabilities and equipment could require significant research
and development and capital expenditures in future years. In addition, advances
in technology also typically lead to rapid and significant price erosion and
decreased margins for older package types and may lead to products currently
being offered by the Company becoming less competitive or inventories held by
the Company becoming obsolete. The failure by the Company to achieve advances in
package design or to obtain access to advanced package designs developed by
others could have a material adverse effect on the Company's business, results
of operations and financial condition. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

The Company's success is also dependent upon the ability of it and ASI to
develop and implement new manufacturing process and package design technologies.
Semiconductor package design and process methodologies have become increasingly
subject to technological change, requiring large expenditures for research and
development. Converting to new package designs or process methodologies could
result in delays in producing new package types which could adversely affect the
Company's ability to meet customer orders.

MANUFACTURING RISKS; PRODUCTION YIELDS

The semiconductor packaging process is complex and involves a number of
precise steps. Defective packaging can result from a number of factors,
including the level of contaminants in the manufacturing environment, human
error, equipment malfunction, use of defective raw materials, defective plating
services and inadequate sample testing. From time to time, the Company expects
to experience lower than anticipated production yields as a result of such
factors, particularly in connection with any expansion of its capacity or change
in its processing steps. In addition, the Company's yield on new products will
be lower during the period necessary for the Company to develop the requisite
expertise and experience in producing such products and using such processes.
The failure of the Company or ASI to maintain high quality production standards
or acceptable production yields, if significant and sustained, could result in
loss of customers, delays in shipments, increased costs, cancellation of orders
and product returns for rework, any of which could have a material adverse
effect on the Company's business, financial condition and results of operations.
See "Business -- Facilities and Manufacturing."

RISKS ASSOCIATED WITH NEW WAFER FABRICATION BUSINESS

The Company recently began providing wafer fabrication services, with
delivery of the first products from ASI's new foundry in January 1998. Neither
the Company nor ASI has significant experience in providing wafer fabrication
services, and there can be no assurance that the Company will not experience
difficulties in marketing and selling these services or that ASI will not
encounter operational difficulties such as lower than expected yields or longer
than anticipated production ramp-up, unexpected costs and other problems in
providing these services. If the Company or ASI encounters these or similar
difficulties, the Company's and ASI's businesses, financial condition and
results of operations could be materially adversely affected. In addition, TI
has transferred certain of its CMOS processes to ASI and ASI is dependent upon
TI's assistance for developing other state-of-the-art wafer manufacturing
processes. If ASI's relationship with TI is disrupted for any reason, ASI's
ability to produce wafers would be adversely affected, thus negatively impacting
the Company's ability to fulfill its customers' orders for fabrication services,
which could materially and adversely affect the Company's business, financial
condition and results of operations. In addition, ASI's technology agreements
with TI (the "TI Technology Agreements") only cover .25 micron and .18 micron
CMOS
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technology and TI is not under any obligation to transfer any next-generation
technology. If ASI is not able to obtain such technology on commercially
reasonable terms or at all, the Company's ability to market ASI's wafer
fabrication services could be materially and adversely affected which could have
a material adverse effect on the Company's and ASI's business, results of
operations and financial condition.

The Company's right to the supply of wafers from ASI's foundry is subject
to an agreement (the "TI Manufacturing and Purchasing Agreement") among ASI, the
Company and TI, pursuant to which TI has agreed to purchase from the Company at
least 40% of the capacity of this foundry and under certain circumstances has
the right to purchase up to 70% of this capacity. As a result, the Company's
wafer fabrication business will be significantly dependent upon TI, which may
adversely affect the Company's ability to obtain additional customers. If the
Company is unable to sell substantially all of the output of ASI's wafer
foundry, its business, results of operations and financial condition could be
materially and adversely affected. Although the Company has received a
commitment from TI which indicates that TI will meet its minimum purchase
obligation during the second half of 1998, during the first half of 1998 TI's
orders were below such minimum purchase commitment due to market conditions and
issues encountered by TI in the transition of its products to .18 micron
technology. There can be no assurance that TI will meet its purchase obligations
in the second half of 1998 or in the future. Accordingly, there can be no
assurance that TI will place orders representing at least 40% of the capacity of
this foundry during this period or in the future. A failure by TI to comply with
its minimum purchase obligations or the cancellation of a significant wafer
fabrication order by TI or any other customer could have a material adverse
effect on ASI's and the Company's business, financial condition and results of
operations. The TI Manufacturing and Purchasing Agreement terminates on December
31, 2007, unless terminated sooner. The TI Manufacturing and Purchasing
Agreement may be terminated upon two years' prior notice by either ASI or TI if
ASI and TI are unable to successfully negotiate prior to June 30, 2000 an
amendment to the TI Technology Agreements or a new agreement with respect to
ASI's use of TI's next-generation CMOS technology. During such two-year period,
TI would be obligated to purchase a minimum of only 20% of the capacity of ASI's
wafer fabrication facility. In addition, the TI Manufacturing and Purchasing
Agreement may be terminated sooner upon, among other events, mutual written
consent, material breach of the agreement by either party, the inability of
either party to obtain any necessary government approvals, the failure of ASI to
protect TI's intellectual property and a change of control, bankruptcy,
liquidation or dissolution of ASI. See "Business -- Competition."

DEPENDENCE ON RAW MATERIALS SUPPLIERS AND SUBCONTRACTORS

The Company obtains the direct materials for the packaging and test
services of its factories and for the packaging and test services provided by
ASI to fill the Company's orders directly from vendors. To maintain competitive
manufacturing operations, the Company must obtain from its vendors, in a timely
manner, sufficient quantities of acceptable materials at expected prices. The
Company sources most of its raw materials, including critical materials such as
lead frames and laminate substrates, from a limited group of suppliers. The
Company purchases all of its materials on a purchase order basis and has no
long-term contracts with any of its suppliers. From time to time, vendors have
extended lead times or limited the supply of required materials to the Company
because of vendor capacity constraints and, consequently, the Company has
experienced difficulty in obtaining acceptable raw materials on a timely basis.
In addition, from time to time, the Company may reject materials that do not
meet its specifications, resulting in declines in output or yield. There can be
no assurance that the Company will be able to obtain sufficient quantities of
raw materials and other supplies of an acceptable quality. The Company's
business, financial condition and results of operations could be materially and
adversely affected if its ability to obtain sufficient quantities of raw
materials and other supplies in a timely manner were substantially diminished or
if there were significant increases in the costs of raw materials that the
Company could not pass on to its customers. See "Business -- Facilities and
Manufacturing."

INABILITY TO OBTAIN PACKAGING AND TEST EQUIPMENT IN A TIMELY FASHION

In connection with its future expansion plans, the Company and ASI expect
to purchase a significant amount of new packaging and test equipment. From time
to time, increased demand for some of this

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equipment causes lead times to extend beyond those normally met by the equipment
vendors. The unavailability of such equipment or the failure of such equipment,
or other equipment acquired by the Company or ASI, to operate in accordance with
the Company's or ASI's specifications or requirements, or delays in the delivery
of such equipment could delay implementation of the Company's or ASI's expansion
plans and impair the ability of the Company to meet customer orders or otherwise
have a material adverse effect on the Company's business, results of operations
and financial condition. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business -- Facilities and
Manufacturing."

MANAGEMENT OF GROWTH

The Company has experienced and may continue to experience growth in the
scope and complexity of its operations and in the number of its employees. For
example, the Company is expanding its scope of operations to include wafer
fabrication services and is hiring new personnel in connection with such
expansion. This growth is expected to continue to strain the Company's
managerial, financial, manufacturing and other resources. In addition, although
the Company believes its current controls are adequate, in order to manage its
growth, the Company must continue to implement additional operating and
financial controls and hire and train additional personnel. Although the Company
has been successful in hiring and properly training sufficient numbers of
qualified personnel and in effectively managing its growth in the past, there
can be no assurance that the Company will be able to do so in the future, and
its failure to do so could have a material adverse effect on the Company's
business, financial condition and results of operations. In addition, any
failure to improve the Company's operational, financial and management systems
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "-- Risks Associated with New Wafer
Fabrication Business," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business -- Employees."

COMPETITION

The independent semiconductor packaging and test industry is very
competitive, being comprised of approximately 50 companies with about 15 of
those companies having sales of $100 million per year or more. The Company faces
substantial competition from established packaging companies primarily located
in Asia, such as Advanced Semiconductor Engineering, Inc. (Taiwan), ASE Test
Limited (Taiwan and Malaysia), ASAT, Ltd. (Hong Kong), Hana Microelectronics
Public Co. Ltd. (Hong Kong and Thailand), Astra International (Indonesia),
Carsem Bhd. (Malaysia), ChipPAC Incorporated (Korea), Siliconware Precision
Industries Co., Ltd. (Taiwan), and Shinko Electric Industries Co., Ltd. (Japan).
Each of these companies has significant manufacturing capacity, financial
resources, research and development operations, marketing and other
capabilities, and have been operating for some time. Such companies have also
established relationships with many large semiconductor companies which are
current or potential customers of the Company. The principal elements of
competition in the independent semiconductor packaging market include time to
market, breadth of package offering, technical competence, design services,
quality, production yields, responsiveness and customer service and price. On a
larger scale, the Company also competes with the internal manufacturing
capabilities of many of its largest customers. There can be no assurance that
the Company will be able to compete successfully in the future against existing
or potential competitors or that the Company's operating results will not be
adversely affected by increased price competition.

The independent wafer fabrication business is also highly competitive. The
Company's wafer fabrication services compete primarily with independent wafer
foundries such as Chartered Semiconductor Manufacturing Ltd., Taiwan
Semiconductor Manufacturing Company Ltd. and United Microelectronics
Corporation, as well as with integrated device manufacturers such as LG Semicon
Co., Ltd., Hitachi, Ltd., Toshiba Corp. and Winbond Electronics Corporation,
which provide foundry services for other semiconductor companies. Each of these
companies has significant manufacturing capacity, financial resources, research
and development operations, marketing and other capabilities and have been
operating for some time. Many of these companies have also established
relationships with many large semiconductor companies which are current or
potential customers of the Company. The principal elements of competition in the
wafer foundry market include

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technology, delivery cycle times, price, product performance, quality,
production yield, responsiveness and flexibility, reliability and the ability to
design and incorporate product improvements. There can be no assurance that the
Company will be able to compete successfully in the future against such
companies. See "Business -- Competition."

DEPENDENCE ON KEY PERSONNEL AND AVAILABILITY OF SKILLED WORKFORCE

The Company's success depends to a significant extent upon the continued
service of its key senior management and its technical personnel, each of whom
would be difficult to replace. Competition for qualified employees is intense,
and the loss of the services of any of its existing key personnel without
adequate replacement, or the inability to attract, retain and motivate qualified
new personnel could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, in connection with
its expansion plans, the Company and ASI will be required to increase the number
of qualified engineers and other employees at their respective facilities in the
Philippines and Korea. Competition for such employees in the Philippines and
Korea is intense and the inability to attract new qualified personnel or to
retain such personnel could have a material adverse effect on the Company's
results of operations and financial condition. See "Management."

ENVIRONMENTAL REGULATIONS

The semiconductor packaging process involves a significant amount of
chemicals and gases which are subject to extensive governmental regulations. For
example, liquid waste is produced at the stage at which silicon wafers are diced
into chips with the aid of diamond saws and cooled with running water. In
addition, excess materials on leads and moldings are removed from packaged
semiconductors in the trim and form process. The Company has installed equipment
to collect certain solvents used in connection with its manufacturing process
and has contracted with independent waste disposal companies to remove such
hazardous material.

Federal, state and local regulations in the United States, as well as
environmental regulations in Korea and the Philippines, impose various controls
on the storage, handling, discharge and disposal of chemicals used in the
Company's and ASI's manufacturing process and on the facilities occupied by the
Company and ASI. The Company believes that its activities, as well as those of
ASI, conform to present environmental and land use regulations applicable to
their respective operations and current facilities. Increasing public attention
has, however, been focused on the environmental impact of semiconductor
manufacturing operations and the risk to neighbors of chemical releases from
such operations. There can be no assurance that applicable land use and
environmental regulations will not in the future impose the need for additional
capital equipment or other process requirements upon the Company or ASI or
restrict the Company's or ASI's ability to expand their respective operations.
The adoption of new ordinances or similar measures or any failure by the Company
or ASI to comply with applicable environmental and land use regulations or to
restrict the discharge of hazardous substances could subject the Company or ASI
to future liability or cause their respective manufacturing operations to be
curtailed or suspended.

INTELLECTUAL PROPERTY

The Company currently holds 24 United States patents, five of which are
jointly held with ASI, related to various IC packaging technologies, in addition
to other pending patents. These patents will expire at various dates from 2012
through 2016. With respect to development work undertaken jointly with ASI, the
Company and ASI share intellectual property rights under the terms of the Supply
Agreements between the Company and ASI. Such Supply Agreements also provide for
the cross-licensing of intellectual property rights between the Company and ASI.
In addition, the Company enters into agreements with other developers of
packaging technology to license or otherwise obtain certain process or package
technologies.

The Company expects to continue to file patent applications when
appropriate to protect its proprietary technologies; however, the Company
believes that its continued success depends primarily on factors such as the
technological skills and innovation of its personnel rather than on its patents.
The process of seeking patent

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protection can be expensive and time consuming. There can be no assurance that
patents will be issued from pending or future applications or that, if patents
are issued, they will not be challenged, invalidated or circumvented, or that
rights granted thereunder will provide meaningful protection or other commercial
advantage to the Company. Moreover, there can be no assurance that any patent
rights will be upheld in the future or that the Company will be able to preserve
any of its other intellectual property rights.

Although the Company is not currently a party to any material litigation,
the semiconductor industry is characterized by frequent claims regarding patent
and other intellectual property rights. As is typical in the semiconductor
industry, the Company may receive communications from third parties asserting
patents on certain of the Company's technologies. In the event any third party
were to make a valid claim against the Company or ASI, the Company or ASI could
be required to discontinue the use of certain processes or cease the
manufacture, use, import and sale of infringing products, to pay substantial
damages and to develop non-infringing technologies or to acquire licenses to the
alleged infringed technology. The Company's business, financial condition and
results of operations could be materially and adversely affected by such
developments. Litigation, which could result in substantial cost to and
diversion of resources of the Company, may also be necessary to enforce patents
or other intellectual property rights of the Company or to defend the Company
against claimed infringement of the rights of others. The failure to obtain
necessary licenses or the occurrence of litigation relating to patent
infringement or other intellectual property matters could have a material
adverse effect on the Company's business, financial condition and results of
operations. In addition, ASI has obtained intellectual property for wafer
manufacturing primarily from TI. The licenses granted to ASI by TI under the TI
Technology Agreements are very limited. Although TI has granted to ASI a license
under TI's trade secret rights to use TI's technology in connection with ASI's
provision of wafer fabrication services, TI has not granted ASI a license under
its patents, copyrights and mask works to manufacture semiconductors for third
parties. Although TI has agreed that TI will not assert a claim for patent,
copyright or mask work right infringement against ASI or the Company in
connection with ASI's manufacture of semiconductor products for third parties,
TI has reserved the right to bring such infringement claims against ASI's or the
Company's customers with respect to semiconductor products purchased from ASI or
the Company. As a result, ASI's and the Company's customers could be subject to
patent litigation by TI and others, and ASI and the Company could in turn be
subject to litigation by such customers and others, in connection with the sale
of wafers produced by ASI. Any such litigation could materially and adversely
affect ASI's ability to continue to manufacture wafers and ASI's and the
Company's business, financial condition and results of operations.

NO PRIOR MARKET; LIQUIDITY; STOCK PRICE VOLATILITY

Prior to the Initial Public Offering, there had been no public market for
the Common Stock. There can be no assurance that an active public market for the
Common Stock will be sustained or that the market price of the Common Stock will
not decline. The trading price of the Common Stock has varied significantly and
could be subject to wide fluctuations in the future in response to
quarter-to-quarter variations in operating results, announcements of
technological innovations or new products by the Company or its competitors,
general conditions in the semiconductor industry, changes in earnings estimates
or recommendations by analysts, developments affecting ASI or other events or
factors. In addition, the public stock markets have experienced extreme price
and trading volume volatility in recent months. This volatility has
significantly affected the market prices of securities of many high technology
companies for reasons frequently unrelated to the operating performance of the
specific companies. These broad market fluctuations may adversely affect the
market price of the Common Stock.

BENEFITS OF THE INITIAL PUBLIC OFFERING TO EXISTING STOCKHOLDERS; CONTINUED
CONTROL BY EXISTING STOCKHOLDERS

Immediately after the closing of the Initial Public Offering, based upon
shares outstanding as of the date hereof, James Kim and members of his family
beneficially owned in the aggregate 77,610,000 shares of Common Stock, which
shares represented all of the outstanding Common Stock not offered in the
Initial Public Offering and approximately 65.8% of the total number of shares of
Common Stock outstanding following the Initial Public Offering. The Initial
Public Offering created a public market for the resale of

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shares held by these existing stockholders. Such stockholders, acting together,
will be able to effectively control substantially all matters submitted for
approval by the stockholders of the Company. Such matters could include the
election of a majority of the members of the Board of Directors, proxy contests,
approvals of transactions between the Company and ASI or other entities in which
Mr. James Kim and members of his family have an interest, mergers involving the
Company, tender offers, open market purchase programs or other purchases of
Common Stock that could give stockholders of the Company the opportunity to
realize a premium over the then prevailing market price for their shares of
Common Stock. Such continued control could also have the effect of delaying,
deferring or preventing a change in control of the Company, may discourage bids
for the Common Stock at a premium over the market price and may adversely affect
the market price of the Common Stock. See "Principal Stockholders."

ANTI-TAKEOVER EFFECTS OF DELAWARE LAW AND CERTAIN CHARTER PROVISIONS

The Company's Board of Directors has the authority to issue up to
10,000,000 shares of preferred stock $.001 par value ("Preferred Stock") and to
determine the price, rights, preferences and privileges of those shares without
any further vote or action by the Company's stockholders. The rights of the
holders of Common Stock will be subject to, and may be adversely affected by,
the rights of the holders of any Preferred Stock that may be issued in the
future. While the Company has no present intention to issue shares of Preferred
Stock, such issuance, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company. In addition, the Company is subject to
the anti-takeover provisions of Section 203 of the Delaware General Corporation
Law, which prohibits the Company from engaging in a "business combination" with
an "interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. The application of
Section 203 could have the effect of delaying or preventing a change of control
of the Company. The Company's Certificate of Incorporation (the "Certificate of
Incorporation") does not permit cumulative voting. This provision, and other
provisions of the Certificate of Incorporation, the Company's bylaws (the
"Bylaws") and Delaware corporate law, may have the effect of deterring hostile
takeovers or delaying or preventing changes in control or management of the
Company, including transactions in which stockholders might otherwise receive a
premium for their shares over then current market prices.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Common Stock into the public market could
adversely affect the prevailing market price of the Common Stock. In addition to
the up to 7,000,000 shares of Common Stock that may be offered hereby from time
to time, there were an additional 40,250,000 shares of Common Stock which were
sold to the public in the Initial Public Offering, and there will be 15,333,333
shares issuable upon conversion of the Convertible Notes, all of which shares
are freely tradeable. Excluding the shares described above, there are
approximately 70,610,000 additional shares of Common Stock outstanding, all of
which are "restricted" shares (the "Restricted Shares") under the Securities Act
of 1933, as amended (the "Securities Act"). Beginning April 29, 1999, all such
Restricted Shares will first become eligible for sale in the public market
pursuant to Rule 144 promulgated under the Securities Act, subject to certain
volume and other resale restrictions pursuant to Rule 144. See "Shares Eligible
for Future Sale."

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REORGANIZATION

Amkor Technology, Inc. is the successor corporation of Amkor Electronics,
Inc. ("AEI") which was incorporated in Pennsylvania in March 1970 to design
semiconductor packages and provide semiconductor packaging services through a
supply relationship with ASI. The Company was organized in September 1997 to
consolidate the ownership of AEI and a number of other companies which support
or engage in various aspects of the semiconductor packaging and test business
and in which Mr. James Kim (the founder of AEI) and members of his family owned
a majority interest (the "Amkor Companies"). Prior to the reorganization
described below, the Amkor Companies consisted of:

- AEI and its subsidiaries Amkor Receivables Corp., which purchases the
Company's accounts receivable under an accounts receivable financing
arrangement, and Amkor Wafer Fabrication Services SARL, which provides
various technical support for CIL's wafer fabrication services customers
in Europe and Asia;

- T.L. Limited ("TLL") and its subsidiary C.I.L. Limited ("CIL"), which
markets the Company's services to semiconductor companies in Europe and
Asia;

- Amkor/Anam EuroServices S.A.R.L. ("AAES"), which provides various
technical and support services for CIL's packaging and test customers;

- Amkor/Anam Advanced Packaging, Inc. ("AAAP"), Amkor/Anam Pilipinas, Inc.
("AAP") and AAP's subsidiary Automated MicroElectronics Inc. ("AMI"),
each of which provides manufacturing services; and

- AK Industries, Inc. ("AKI") and its subsidiary, Amkor-Anam, Inc., which
provides raw material purchasing and inventory management services.

All of the Amkor Companies were substantially wholly owned beneficially by
Mr. and Mrs. Kim or entities beneficially owned by members of Mr. James Kim's
immediate family (the "Founding Stockholders"), except for 40% of AAP owned by
ASI and one-third of AEI and all of AKI which were owned by certain trusts
established for the benefit of other members of Mr. Kim's family (the "Kim
Family Trusts").

Prior to the Initial Public Offering, the following transactions were
effected to consolidate the operations of the Amkor Companies under the Company,
(such transactions are referred to collectively as the "Reorganization"):

- AEI was merged into Amkor Technology, Inc.

- Amkor International Holdings ("AIH"), a newly formed Cayman Islands
holding company, became a wholly-owned subsidiary of Amkor Technology,
Inc. holding the following entities:
- First Amkor Cayman Islands, Ltd., a newly formed Cayman Islands
holding company, and its subsidiaries AAAP, AAP and AMI;
- TLL and its subsidiary CIL; and
- AAES.

- In addition, the Company acquired all of the stock of AKI from the Kim
Family Trusts for $3 million.

Except for the acquisition of AKI which has been accounted for as a
purchase transaction, the accounting for the Reorganization is similar to the
accounting for a pooling of interests as it represents an exchange of equity
interests among companies under common control. All of the Amkor Companies are
wholly owned, directly or indirectly, by the Company. An aggregate of 82,610,000
shares of Common Stock were issued by the Company in connection with the
Reorganization. The relative number of shares of Common Stock issued by the
Company in connection with each of the transactions comprising the
Reorganization was based upon relative amounts of stockholders' equity of each
of the Amkor Companies as of December 31, 1997. Accordingly, the Company issued
an aggregate of 14,620,140 shares of Common Stock in connection with the merger
of AEI into Amkor Technology, Inc., two-thirds of which (9,746,760 shares) were
received by Mr. and Mrs. Kim and one-third of which (4,873,380 shares) were
received by the Kim Family Trusts. The Company then issued an aggregate of
67,989,851 shares of Common Stock, representing approximately 82%
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of its shares immediately after the Reorganization, in exchange for all of the
outstanding shares of AIH and its subsidiaries. Of such shares, 27,528,234
shares and 36,376,617 shares were gifted to Mr. and Mrs. Kim and the Kim Family
Trusts, respectively, such that Mr. and Mrs. James Kim and the Kim Family Trusts
owned 45.1% and 49.9%, respectively, of the Common Stock outstanding after the
Reorganization. Following the Reorganization, the Founding Stockholders
beneficially owned a majority of the outstanding shares of Common Stock.
Following the Initial Public Offering, the Founding Stockholders and the Kim
Family Trusts beneficially owned 77,610,000 shares of Common Stock, representing
approximately 65.8% of the outstanding shares of Common Stock. See "Certain
Transactions" and "Principal Stockholders."

Following the Initial Public Offering, the Company purchased ASI's 40%
interest in AAP for approximately $34 million. See "Prospectus Summary -- The
Initial Public Offering" and Notes 1 and 17 to Consolidated Financial
Statements.

TERMINATION OF S CORPORATION STATUS AND DISTRIBUTIONS

Prior to the consummation of the Reorganization, AEI had elected to be
treated for U.S. federal and certain state tax purposes as an S Corporation
under the Internal Revenue Code of 1986 and comparable state tax laws. As a
result, AEI did not recognize federal corporate income taxes. Instead, up until
the termination of AEI's S Corporation status on April 28, 1998 (the
"Termination Date"), Mr. and Mrs. Kim and the Kim Family Trusts had been
obligated to pay U.S. federal and certain state income taxes on their allocable
portion of the income of AEI. The Company, Mr. and Mrs. Kim and the Kim Family
Trusts have entered into tax indemnification agreements providing that the
Company will be indemnified by such stockholders, with respect to their
proportionate share of any U.S. federal or state corporate income taxes
attributable to the failure of AEI to qualify as an S Corporation for any period
or in any jurisdiction for which S Corporation status was claimed through the
Termination Date. The tax indemnification agreements also provide that under
certain circumstances the Company will indemnify Mr. and Mrs. Kim and the Kim
Family Trusts if such stockholders are required to pay additional taxes or other
amounts attributable to taxable years on or before the Termination Date as to
which AEI filed or files tax returns claiming status as an S Corporation. AEI
has made various distributions to such stockholders which have enabled them to
pay their income taxes on their allocable portions of the income of AEI. Such
distributions totaled approximately $19.8 million, $13.0 million, $5.0 million
and $33.1 million in 1995, 1996, 1997 and the six months ended June 30, 1998.
The Company believes the amount of such undistributed net income was less than
$1.0 million at June 30, 1998. See Notes 1 and 10 of Notes to Consolidated
Financial Statements.

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RELATIONSHIP WITH ASI

ASI is a Korean company engaged primarily in providing semiconductor
packaging and test services to the Company, which in turn sells such services to
its customers. ASI also currently markets its services directly in Korea. In
addition, ASI manufactures and sells electric wiring devices and watches. ASI
operates four semiconductor packaging and test facilities in Korea, and has
recently qualified a new deep submicron CMOS wafer foundry in Korea which is
currently capable of producing 15,000 8" wafers per month. In March 1998, ASI
changed its name to Anam Semiconductor, Inc.

ASI was founded in 1956 by Mr. H. S. Kim, who currently serves as the
honorary Chairman and a Representative Director of ASI. ASI is a member of the
Anam Group, consisting principally of companies in Korea in the electronics
industries. The businesses of ASI and the other companies in the Anam Group are
influenced to a significant degree by the family of H. S. Kim, which, together
with the Company, collectively owned approximately 40.7% of the outstanding
common stock of ASI as of December 31, 1997. A significant portion of the shares
owned by the Kim family are leveraged and as a result of this, or for other
reasons, the family's ownership could be substantially reduced. James Kim, the
founder of the Company and currently its Chairman and Chief Executive Officer,
is the eldest son of H. S. Kim. Since January 1992, in addition to his other
responsibilities, James Kim has been serving as acting Chairman of the Anam
Group and a director of ASI. Mr. In-Kil Hwang, the President and a
Representative Director of ASI, is the brother-in-law of James Kim. In addition,
four other members of Mr. Kim's family are on the 13 member Board of Directors
of ASI. After the Initial Public Offering, James Kim and members of his family
beneficially owned approximately 65.8% of the outstanding Common Stock of the
Company, and Mr. Kim and other members of his family will continue to exercise
significant control over the Company. See "Risk Factors -- Benefits of the
Initial Public Offering to Existing Stockholders; Continued Control by Existing
Stockholders" and "Principal Stockholders."

The businesses of the Company and ASI have been interdependent for many
years. In 1996, 1997 and the six months ended June 30, 1998, approximately 72%,
68% and 67%, respectively, of the Company's revenues were derived from sales of
services performed for the Company by ASI. In addition, substantially all of the
revenues of ASI in 1996, 1997 and the six months ended June 30, 1998 were
derived from services sold by the Company. The Company expects the proportion of
its revenues derived from sales of services performed for the Company by ASI and
the proportion of ASI's revenues from services sold by the Company to increase
from the Company's sales of the wafer fabrication output of ASI's new wafer
foundry. In the event the ability of ASI to supply the Company were disrupted
for any reason, the Company's facilities in the Philippines would be able to
fill only a small portion of the resulting shortfall in packaging and test
capacity and none of the shortfall in wafer fabrication capacity. In addition,
there are currently no significant third party suppliers of packaging and test
services and no qualified third party suppliers of wafer fabrication services
from which the Company could fill its orders. As a result, the Company's
business, financial condition and operating results will continue to be
significantly dependent on the ability of ASI to effectively provide contracted
services on a cost-efficient and timely basis. The Company expects that the
businesses of the Company and ASI will continue to remain highly interdependent
by virtue of their supply relationship, family ties between their respective
shareholders and management, financial relationships, coordination of product
and operation plans, joint research and development activities and shared
intellectual property rights. The termination or disruption of the Company's
relationship with ASI for any reason, or the insolvency of ASI or any material
adverse change in ASI's business resulting from underutilization of its
capacity, the level of its debt and its guarantees of affiliate debt, labor
disruptions, fluctuations in foreign exchange rates, changes in governmental
policies, economic or political conditions in Korea or any other change, could
have a material adverse effect on the Company's business, financial condition
and results of operations.

The Company has recently entered into the Supply Agreements with ASI. Under
the Supply Agreements, ASI has granted to the Company a first right to
substantially all of the packaging and test services of ASI and the exclusive
right to all of the wafer output of its new wafer foundry. The Company expects
to continue to purchase substantially all of ASI's packaging and test services,
and to purchase all of ASI's wafer output, under the Supply Agreements. Under
the Supply Agreements, pricing arrangements relating to packaging and test
services provided by ASI to the Company are subject to quarterly review and
adjustment, and such
24

26

arrangements relating to the wafer output provided by ASI to the Company are
subject to annual review and adjustment, in each case on the basis of factors
such as changes in the semiconductor market, forecasted demand, product mix and
capacity utilization and fluctuations in exchange rates, as well as the mutual
long-term strategic interests of the Company and ASI. Although the Company and
ASI agreed to reduce the price paid by the Company for packaging and test
services beginning in the second quarter of 1998, there can be no assurance that
any new pricing arrangements resulting from such review and adjustment will be
favorable to the Company. Pursuant to long-standing arrangements between ASI and
the Company's operating subsidiaries, sales from ASI to the Company will
continue to be made through AUSA, a wholly-owned financing subsidiary of ASI.
Under the Supply Agreements, the Company will continue to reimburse AUSA for the
financing costs incurred by it in connection with trade financing provided to
the Company. The Supply Agreements also provide that Amkor-Anam, Inc., a
subsidiary of the Company, will continue to provide raw material procurement and
related services to ASI on a fee basis. The Supply Agreements have a five-year
term, and may be terminated by any party thereto upon five years' written notice
at any time after the expiration of such initial five-year term. There can be no
assurance that ASI will not terminate either Supply Agreement upon the
expiration of such initial term or that if it does terminate a Supply Agreement,
that the Company will be able to obtain a new agreement with ASI on terms that
are favorable to the Company or at all.

ASI's ability to continue to provide services to the Company will depend on
ASI's financial condition and performance. ASI currently has a significant
amount of debt relative to its equity, which debt the Company expects will
continue to increase in the foreseeable future. The Company is advised that ASI,
as a public company in Korea, has published its most recent consolidated
financial statements as of and for the year ended December 31, 1997. These
consolidated financial statements are prepared on the basis of Korean GAAP,
which differs significantly from U.S. GAAP. U.S. GAAP financial statements are
not available. The independent auditors' report regarding ASI, included
elsewhere in this Prospectus, includes an explanatory paragraph regarding change
in accounting principles, the impact of the Korean economic situation on ASI and
its ability to continue as a going concern.

25

27

The following is a summary of 1996 and 1997 consolidated financial
information pertaining to ASI prepared in accordance with Korean GAAP which
differs from U.S. GAAP. See Note 6 of Notes to Consolidated Financial
Statements.

1996             1997
-----------    --------------
(IN MILLIONS)

INCOME STATEMENT DATA:
Sales.................................................  W 1,338,718     W 1,786,457
Cost of sales.........................................    1,096,117       1,507,271
-----------     -----------
Gross profit..........................................      242,601         279,186
Selling and administrative expenses...................       77,754         103,158
-----------     -----------
Operating income......................................      164,847         176,028
Non-operating income:
Interest and dividend income.......................       38,569          47,592
Foreign exchange gains.............................       10,420         122,507
Other..............................................        9,268          11,196
-----------     -----------
58,257         181,295
-----------     -----------
Non-operating expenses:
Interest expenses..................................      138,657         160,658
Amortization of deferred charges...................        2,861          33,891
Foreign exchange losses............................       39,792         339,204
Loss from forward contract.........................           --          94,644
Other..............................................        9,962          20,639
-----------     -----------
191,272         649,036
-----------     -----------
Ordinary income (loss)................................       31,832        (291,713)
Extraordinary gains...................................          447             774
Extraordinary losses..................................       11,072           1,812
-----------     -----------
Net income (loss) before income taxes.................       21,207        (292,751)
Income taxes..........................................       17,363           7,922
-----------     -----------
Net income (loss) after income taxes..................        3,844        (300,673)
Minority interests in losses (earnings) of
consolidated subsidiaries, net.....................       (8,569)          1,206
Amortization of consolidation adjustments, net........       (5,326)         (3,009)
Equity in earnings (losses) of unconsolidated
equity-method subsidiaries and investees, net......          666         (46,253)
-----------     -----------
Net loss..............................................   W   (9,385)     W (348,729)
===========     ===========

26

28

1996             1997
-----------    --------------
(IN MILLIONS)

SUMMARY BALANCE SHEET DATA:
Cash and bank deposits................................   W  324,139      W  215,024
Accounts and notes receivable, net....................      170,724         189,522
Inventories...........................................      214,494         260,302
Other current assets..................................      145,302         241,965
-----------     -----------
Total current assets...............................      854,659         906,813
-----------     -----------
Property, plant and equipment, net....................      994,931       2,159,466
Investments...........................................       83,715         121,880
Long-term accounts receivable.........................      198,251         203,739
Long-term loans.......................................          747         258,322
Other long-term assets................................       92,985         285,810
-----------     -----------
Total long-term assets.............................    1,370,629       3,029,217
-----------     -----------
Total assets..................................   W2,225,288      W3,936,030
===========     ===========
Short-term borrowings.................................    1,050,405       1,720,916
Current maturities of long-term debt..................       85,252         120,913
Other current liabilities.............................      190,989         282,653
-----------     -----------
Total current liabilities..........................    1,326,646       2,124,482
-----------     -----------
Long-term debt, net of current maturities.............      475,045         736,784
Long-term capital lease obligations...................      106,068         861,813
Other long-term liabilities...........................       67,672         111,017
-----------     -----------
Total long-term liabilities...................      648,785       1,709,614
-----------     -----------
Total liabilities.............................    1,975,431       3,834,096
-----------     -----------
Minority interests....................................       21,600          25,160
Stockholders' equity..................................      228,257          76,774
-----------     -----------
Total liabilities and stockholders' equity....   W2,225,288      W3,936,030
===========     ===========

A significant amount of the current and long-term liabilities of ASI are
denominated in U.S. dollars and other foreign currencies. At December 31, 1997,
the amount of U.S. dollar and other foreign currency denominated short-term
borrowings, current maturities of long-term debt, long-term debt (net of current
maturities) and long-term capital lease obligations were W1,222 billion, W59
billion, W159 billion and W834 billion, respectively. Due in part to the
significant depreciation of the won (for example, from a Market Average Exchange
Rate of W884 to $1.00 on December 31, 1996 to W1,415 to $1.00 on December 31,
1997 and W1,324 to $1.00 on August 13, 1998) resulting from the recent economic
crisis in Korea, ASI's liabilities in won terms and its leverage calculated in
won have significantly increased in 1997. The effect of this depreciation on
ASI, however, has been mitigated by the fact that substantial amounts of ASI's
revenues are denominated in U.S. dollars. The increase in ASI's liabilities was
also attributable in part to additional financing obtained in connection with
the constitution of its new wafer foundry. See "-- Risks Associated with New
Wafer Fabrication Business" and Note 6 of Notes to Consolidated Financial
Statements.

The recent economic crisis in Korea has also led to sharply higher domestic
interest rates in Korea and reduced opportunities for refinancing or refunding
maturing debts as financial institutions in Korea, which are experiencing
financial difficulties, are increasingly looking to limit their lending,
particularly to highly leveraged companies, and to increase their reserves and
provisions for non-performing assets. These developments will result in higher
interest rates on loans to ASI and have otherwise made it more difficult for ASI
to obtain new financing. In addition, ASI has obtained a significant amount of
financing through arrangements obtained by AUSA. As an overseas subsidiary of
ASI, AUSA was formed with the approval of the Bank of Korea. If the Bank of
Korea were to withdraw such approval, or if AUSA otherwise ceased operations for
any reason, ASI would be required to meet their financing needs through
alternative arrangements. Therefore, there can be no assurance that ASI will be
able to refinance its existing loans or

27

29

obtain new loans, or continue to make required interest and principal payments
on such loans or otherwise comply with the terms of its loan agreements. Any
inability of ASI to obtain financing or generate cash flow from operations
sufficient to fund its capital expenditure, debt service and repayment and other
working capital and liquidity requirements could have a material adverse effect
on ASI's ability to continue to provide services and otherwise fulfill its
obligations to the Company. See " -- Dependence On International Operations and
Sales; Concentration of Operations in the Philippines and Korea."

As of December 31, 1997, ASI and its consolidated subsidiaries were
contingently liable under guarantees in respect of debt of ASI's
non-consolidated subsidiaries and affiliates in the Anam Group in the aggregate
amount of approximately W857 billion. As of such date, ASI had provided
guarantees for all of AUSA's debt of $319 million, $176 million of bank loans to
one of the Company's subsidiaries and the Company's obligations under a
receivables sales arrangement. Prior to the Initial Public Offering, the Company
met a significant portion of its financing needs through financing arrangements
obtained by AUSA for the benefit of the Company, based on guarantees provided by
ASI. The Company currently does not depend on such financing arrangements. In
addition, if any relevant subsidiaries or affiliates of ASI, certain of which
may have greater exposure to domestic Korean economic conditions than ASI, were
to fail to make interest or principal payments or otherwise default under their
debt obligations guaranteed by ASI, ASI could be required under its guarantees
to repay such debt, which event could have a material adverse effect on its
financial condition and results of operations.

Historically, ASI has undertaken capacity expansion programs and other
capital expenditures primarily on the basis of forecasts of the Company and
business plans prepared jointly with the Company. The Supply Agreements
generally provide for continued capital investment by ASI based on the Company's
forecasts and operational plans prepared jointly by the Company and ASI
reflecting such forecasts. However, as a result of the recent deterioration of
the Korean economy, there can be no assurance that ASI will be able to fund
future capacity expansions and other capital investments required to supply the
Company with necessary packaging and test services and wafer output on a timely
and cost-efficient basis.

The Company and ASI have historically cooperated on the development of new
package designs and packaging and testing processes and technologies. The Supply
Agreements generally provide for continued cooperation between the Company and
ASI in research and development, as well as the cross-licensing of intellectual
property rights between the Company and ASI. If the Company's relationship with
ASI were terminated for any reason, the Company's research and development
capabilities and intellectual property position could be materially and
adversely affected.

The Company will continue to be controlled to a significant degree by James
Kim and members of his family for the foreseeable future, and Mr. Kim and other
members of his family will continue to exercise significant influence over the
management of ASI and its affiliates. In addition, the Company and ASI will
continue to have certain contractual and other business relationships, including
under the Supply Agreements, and may engage in transactions from time to time
that are material to the Company. For example, on July 21, 1998 the Company
entered into a prepayment agreement with ASI relating to assembly and test
services. In accordance with the agreement, the Company made a $50 million
non-interest bearing advance to ASI, representing approximately one month's
charges for assembly and test services. The Company will offset this advance
against billings by ASI for assembly and test services provided in the fourth
quarter of 1998. Additionally, in connection with its wafer foundry agreement
with TI, the Company and TI agreed to revise certain payment and other terms
contained in the Master Purchase Agreement. As part of this revision, TI agreed
to advance ATI $20 million in June 1998 as a prepayment of wafer foundry
services to be provided in the fourth quarter of 1998. The Company in turn
advanced these funds to ASI as a prepayment for foundry service charges. The
Company will offset the advance to ASI against billings by ASI in the fourth
quarter of 1998. Although any such material agreements and transactions would
require approval of the Company's Board of Directors, such transactions
generally will not require any additional approval by a separate committee
comprised of the disinterested members of the Board of Directors and conflicts
of interest may

28

30

arise in certain circumstances. There can be no assurance that such conflicts
will not from time to time be resolved against the interests of the Company. The
Company currently has six directors, four of whom are disinterested. Under
Delaware corporate law, each director owes a duty of loyalty and care to the
Company, which if breached can result in personal liability for the directors.
In addition, the Company may agree to certain changes in its contractual and
other business relationships with ASI, including pricing, manufacturing
allocation, capacity utilization and capacity expansion, among others, which in
the judgment of the Company's management will result in reduced short-term
profitability for the Company in favor of potential long-term benefits to the
Company and ASI. There can be no assurance that the Company's business,
financial condition or results of operations will not be adversely affected by
any such decision.

USE OF PROCEEDS

This Prospectus relates to the shares of Common Stock which Salomon Smith
Barney may, subject to certain limitations, from time to time, borrow from Mr.
and Mrs. Kim to settle short sales of Common Stock (or to return Common Stock
previously borrowed by Salomon Smith Barney to settle such short sales) entered
into by Salomon Smith Barney to hedge any long position in the Convertible Notes
resulting from its market-making activities. See "Plan of Distribution." The
Company will not receive any proceeds from the sale of the Common Stock to which
this Prospectus relates.

DIVIDEND POLICY

The Company currently anticipates that all future earnings will be retained
for use in the Company's business and that the Company will not pay any cash
dividends on its Common Stock in the foreseeable future. The payment of any
future dividends will be at the discretion of the Company's Board of Directors
and will depend upon, among other things, future earnings, operations, capital
requirements, the general financial condition of the Company and general
business conditions. As an S Corporation, AEI made substantial cash
distributions to its stockholders to pay income taxes on their allocable
portions of AEI's net income. See "Reorganization."

29

31

CAPITALIZATION

The following table sets forth as of June 30, 1998 the capitalization of
the Company derived from its unaudited Consolidated Financial Statements. The
capitalization information set forth in the table below is qualified by the more
detailed Consolidated Financial Statements and Notes thereto included elsewhere
in this Prospectus and should be read in conjunction with such Consolidated
Financial Statements and the Notes thereto.

JUNE 30, 1998
--------
(UNAUDITED)

Short term borrowings and current portion of long-term
debt......................................................       $ 32,973
Long-term debt:
5 3/4% Convertible Subordinated Notes due 2003............        207,000
Other long-term debt......................................         18,120
--------
Total long-term debt...................................        225,120
--------
Stockholders' equity:
Common Stock, $.001 par value; 500,000,000 shares
authorized; 117,860,000 shares issued and
outstanding(2).........................................            118
Additional paid-in capital................................        381,487
Retained earnings.........................................         63,881
--------
Total stockholders' equity.............................        445,486
--------
Total capitalization..............................       $670,606
========

- ---------------
(1) See "Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Liquidity and Capital Resources."

(2) Excludes 3,168,500 shares of Common Stock issuable upon exercise of options
granted immediately prior to the Initial Public Offering under the Company's
1998 Stock Plan, 1998 Stock Option Plan for French Employees and 1998
Director Option Plan. Also excludes an aggregate of 15,333,333 shares
reserved for issuance upon conversion of the Convertible Notes and an
additional 3,381,500 shares reserved for issuance under the Company's 1998
Stock Plan, 1998 Stock Option Plan for French Employees, 1998 Director
Option Plan and 1998 Employee Stock Purchase Plan. See "Management" and
"Description of Capital Stock" and Note 1 of Notes to Consolidated Financial
Statements.

30

32

SELECTED CONSOLIDATED FINANCIAL DATA

The selected financial data presented below for, and as of the end of, each
of the years in the five-year period ended December 31, 1997 and for the three
months and six months ended June 30, 1997 and 1998 are derived from the
financial statements of Amkor. The consolidated financial statements as of
December 31, 1995, 1996 and 1997 and for each of the years in the three-year
period ended December 31, 1997 have been audited by Arthur Andersen LLP,
independent public accountants, and their report thereon, together with such
consolidated financial statements, are included elsewhere in this Prospectus.
The selected consolidated financial data presented below as of and for the year
ended December 31, 1994 are derived from audited financial statements which are
not presented herein. The selected consolidated financial data presented below
as of and for the year ended December 31, 1993 and for the three months and six
months ended June 30, 1997 and 1998 are derived from unaudited consolidated
financial statements. In the opinion of management, the unaudited consolidated
financial statements have been prepared on the same basis as the audited
consolidated financial statements and contain all adjustments, consisting only
of normal recurring adjustments, necessary for a fair presentation of the
Company's results of operations for such periods and financial condition at such
dates. The selected consolidated financial data set forth below is qualified in
its entirety by, and should be read in conjunction with, "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements and Notes thereto.

YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1993         1994        1995         1996          1997
-----------   ---------   ---------   -----------   -----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)

INCOME STATEMENT DATA:
Net revenues.................   $ 442,101    $ 572,918   $ 932,382   $ 1,171,001   $ 1,455,761
Cost of revenues.............     371,323      514,648     783,335     1,022,078     1,242,669
---------    ---------   ---------   -----------   -----------
Gross profit...........      70,778       58,270     149,047       148,923       213,092
---------    ---------   ---------   -----------   -----------
Operating expenses:
Selling, general and
administrative...........      42,649       41,337      55,459        66,625       103,726
Research and development...       1,755        3,090       8,733        10,930         8,525
---------    ---------   ---------   -----------   -----------
Total operating
expenses.............      44,404       44,427      64,192        77,555       112,251
---------    ---------   ---------   -----------   -----------
Operating income.............      26,374       13,843      84,855        71,368       100,841
---------    ---------   ---------   -----------   -----------
Other (income) expense:
Interest expense, net......       5,116        5,752       9,797        22,245        32,241
Foreign currency (gain)
loss.....................       2,809       (4,865)      1,512         2,961          (835)
Other (income) expense,
net......................      (1,725)        (877)      6,523         3,150         8,429
---------    ---------   ---------   -----------   -----------
Total other expense....       6,200           10      17,832        28,356        39,835
---------    ---------   ---------   -----------   -----------
Income before income taxes,
equity in income (loss) of
ASI and minority
interest...................      20,174       13,833      67,023        43,012        61,006
Provision for income taxes...       2,445        2,977       6,384         7,876         7,078
Equity in income (loss) of
ASI........................       1,776        1,762       2,808        (1,266)      (17,291)
Minority interest............       2,269        1,044       1,515           948        (6,644)
---------    ---------   ---------   -----------   -----------
Net income...................   $  17,236    $  11,574   $  61,932   $    32,922   $    43,281
=========    =========   =========   ===========   ===========
PRO FORMA DATA (UNAUDITED):
Historical income before
income taxes, equity in
income (loss) of ASI and
minority interest..........   $  20,174    $  13,833   $  67,023   $    43,012   $    61,006
Pro forma provision for
income taxes(1)............       5,345        3,177      16,784        10,776        10,691
---------    ---------   ---------   -----------   -----------
Pro forma income before
equity in income (loss) of
ASI and minority
interest(1)................      14,829       10,656      50,239        32,236        50,315
Historical equity in income
(loss) of ASI..............       1,776        1,762       2,808        (1,266)      (17,291)
Historical minority
interest...................       2,269        1,044       1,515           948        (6,644)
---------    ---------   ---------   -----------   -----------
Pro forma net income (1).....   $  14,336    $  11,374   $  51,532   $    30,022   $    39,668
=========    =========   =========   ===========   ===========
Basic pro forma net income
per common share(1)........   $     .17    $     .14   $     .62   $       .36   $       .48
=========    =========   =========   ===========   ===========
Diluted pro forma net income
per common share(1)........   $     .17    $     .14   $     .62   $       .36   $       .48
=========    =========   =========   ===========   ===========
Shares used in computing
basic pro forma net income
per common share...........      82,610       82,610      82,610        82,610        82,610
=========    =========   =========   ===========   ===========
Shares used in computing
diluted pro forma net
income per common share....      82,610       82,610      82,610        82,610        82,610
=========    =========   =========   ===========   ===========

THREE MONTHS            SIX MONTHS
ENDED JUNE 30,         ENDED JUNE 30,
----------------------   -------------------
1997         1998       1997       1998
-----------   --------   --------   --------
(UNAUDITED)             (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)

INCOME STATEMENT DATA:
Net revenues.................   $350,471     $384,724   $663,490   $756,457
Cost of revenues.............    299,093      317,106    586,542    627,162
--------     --------   --------   --------
Gross profit...........     51,378       67,618     76,948    129,295
--------     --------   --------   --------
Operating expenses:
Selling, general and
administrative...........     26,657       28,939     47,265     57,654
Research and development...      2,030        1,938      3,515      3,995
--------     --------   --------   --------
Total operating
expenses.............     28,687       30,877     50,780     61,649
--------     --------   --------   --------
Operating income.............     22,691       36,741     26,168     67,646
--------     --------   --------   --------
Other (income) expense:
Interest expense, net......      8,306        4,875     16,355     14,397
Foreign currency (gain)
loss.....................      1,590          956        100      3,703
Other (income) expense,
net......................       (319)       1,808      1,287      5,897
--------     --------   --------   --------
Total other expense....      9,577        7,639     17,742     23,997
--------     --------   --------   --------
Income before income taxes,
equity in income (loss) of
ASI and minority
interest...................     13,114       29,102      8,426     43,649
Provision for income taxes...      4,186        8,437      2,689     13,487
Equity in income (loss) of
ASI........................         --           --         --         --
Minority interest............        221         (126)     1,859        559
--------     --------   --------   --------
Net income...................   $  8,707     $ 20,791   $  3,878   $ 29,603
========     ========   ========   ========
PRO FORMA DATA (UNAUDITED):
Historical income before
income taxes, equity in
income (loss) of ASI and
minority interest..........   $ 13,114     $ 29,102   $  8,426   $ 43,649
Pro forma provision for
income taxes(1)............      5,327        8,437      5,389     12,659
--------     --------   --------   --------
Pro forma income before
equity in income (loss) of
ASI and minority
interest(1)................      7,787       20,665      3,037     30,990
Historical equity in income
(loss) of ASI..............         --           --         --         --
Historical minority
interest...................        221         (126)     1,859        559
--------     --------   --------   --------
Pro forma net income (1).....   $  7,566     $ 20,791   $  1,178   $ 30,431
========     ========   ========   ========
Basic pro forma net income
per common share(1)........   $    .09     $    .20   $    .01   $    .32
========     ========   ========   ========
Diluted pro forma net income
per common share(1)........   $    .09     $    .19   $    .01   $    .32
========     ========   ========   ========
Shares used in computing
basic pro forma net income
per common share...........     82,610      106,035     82,610     94,323
========     ========   ========   ========
Shares used in computing
diluted pro forma net
income per common share....     82,610      116,427     82,610     99,519
========     ========   ========   ========

31

33

- ---------------
(1) Prior to the Reorganization, AEI, a predecessor of the Company, elected to
be taxed as an S Corporation under the Internal Revenue Code of 1986 and
comparable state tax laws. Accordingly, AEI did not recognize any provision
for federal income tax expense during the periods presented. The pro forma
provision for income taxes reflects the additional U.S. federal income taxes
which would have been recorded if AEI had not been an S Corporation during
these periods. See "Reorganization" and Note 1 of Notes to Consolidated
Financial Statements.

DECEMBER 31,
-------------------------------------------------------    JUNE 30,
1993         1994       1995       1996       1997        1998
-----------   --------   --------   --------   --------    --------
(UNAUDITED)                                               (UNAUDITED)
(IN THOUSANDS)

BALANCE SHEET DATA:
Cash and cash equivalents......................   $  8,929     $114,930   $ 91,151   $ 49,664   $ 90,917    $170,461
Working capital (deficit)......................    (13,073)     134,798    111,192     36,785    (38,219)    168,428
Total assets...................................    191,754      426,522    626,379    804,864    855,592     947,419
Short-term borrowings and current portion of
long-term debt...............................     76,051       52,526     85,120    191,813    167,317      32,973
5 3/4% Convertible Subordinated Notes due
2003.........................................         --           --         --         --         --     207,000
Due to AUSA (non-current)......................     18,823      211,693    219,037    234,894    149,776          --
Other long-term debt...........................     29,917       62,215    107,385    167,444    196,934      18,120
Stockholders' equity...........................      8,070        9,617     45,289     45,812     90,875     445,486

32

34

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

The following discussion contains forward-looking statements within the
meaning of the federal securities laws, including statements regarding the
anticipated growth in the market for the Company's products, the Company's
anticipated capital expenditures and financing needs, the Company's expected
capacity utilization rates, the belief of the Company as to its future operating
performance and other statements that are not historical facts. Because such
statements include risks and uncertainties, actual results may differ materially
from those anticipated in such forward-looking statements as a result of certain
factors, including those set forth in the following discussion as well as in
"Risk Factors" and "Business." The following discussion provides information and
analysis of the Company's results of operations from 1995 through 1997 and the
three months and the six months ended June 30, 1997 and 1998 and its liquidity
and capital resources and should be read in conjunction with the Consolidated
Financial Statements and Notes thereto and the selected consolidated financial
data included elsewhere in this Prospectus. The operating results for interim
periods are not necessarily indicative of results for any subsequent period.

OVERVIEW

Background. The Company is the world's largest independent provider of
semiconductor packaging and test services. The Company believes that it is also
one of the leading developers of advanced semiconductor packaging and test
technology in the industry. The Company offers a complete and integrated set of
packaging and test services including IC package design, leadframe and substrate
design, IC package assembly, final testing, burn-in, reliability testing, and
thermal and electrical characterization. The Company recently began offering
wafer fabrication services. The Company provides packaging and test services
through its three factories in the Philippines (P1, P2 and P3) as well as the
four factories of ASI in Korea, and wafer fabrication services through ASI's new
wafer foundry, pursuant to the Supply Agreements between the Company and ASI. As
of December 31, 1997, the Company had in excess of 150 customers, including many
of the largest semiconductor companies in the world.

The Company was formed in September 1997 to consolidate the operations of
the Amkor Companies, including AEI which was incorporated in 1970. These
companies were under common management and in the same business prior to the
Company's formation. As a result of the Reorganization, the financial statements
included in this Prospectus are presented on a consolidated basis. See
"Reorganization" and "Certain Transactions" and Note 1 of Notes to Consolidated
Financial Statements. Prior to the Reorganization, AEI elected to be taxed as an
S Corporation under the Internal Revenue Code of 1986 and comparable state tax
laws. Accordingly, AEI did not recognize any provision for federal income tax
expense during the periods presented in the Consolidated Financial Statements.
The Consolidated Financial Statements include a pro forma provision for income
taxes which reflects the U.S. federal income taxes which would have been
recorded by the Company if AEI had not been an S Corporation during these
periods. See Notes 1 and 10 of Notes to Consolidated Financial Statements.

General.  From 1995 to 1997, the Company's revenues increased from
approximately $932.4 million to $1.456 billion. This increase occurred primarily
as a result of increases in unit volumes, together with the shift in the
Company's product mix from traditional leadframe products to advanced leadframe
and laminate products, which were offset in part by decreasing average selling
prices. See "Business -- Products." In order to meet customer demand, the
Company has invested significant resources to expand its capacity in the
Philippines. In 1996 and the first six months of 1997, the Company incurred and
expensed $15.5 million and $16.6 million, respectively, of pre-operating and
start-up costs and initial operating losses in connection with its newest
factory, P3, in the Philippines. This facility operated at substantially less
than full capacity during these periods while customers were completing
qualification procedures for BGA packages to be produced at the facility. The
Company significantly increased utilization of P3 during the last six months of
1997. During the first six months of 1998, continued growth in the Company's
laminate product business has allowed it to increase the utilization of its P3
factory to the point where it is now contributing positive gross margins. See
"Risk Factors -- Expansion of Manufacturing Capacity; Profitability Affected by
Capacity Utilization Rates" and "Business -- Facilities and Manufacturing."
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The Company's results of operations are generally affected by the
capital-intensive nature of its business. In 1995, 1996, 1997 and the six months
ended June 30, 1998, the Company invested $123.6 million, $185.1 million, $179.0
million and $51.9 million, respectively, in property, plant and equipment.
Increases or decreases in capacity utilization rates can have a significant
effect on gross margins since the unit cost of packaging and test services
generally decrease as fixed charges, such as depreciation expense for the
equipment, are allocated over a larger number of units produced. The Company
plans to invest an additional approximately $88.1 million in plant, property and
equipment during the balance of 1998. In addition, the Company's gross margin is
significantly affected by fluctuations in service charges paid to ASI pursuant
to the Supply Agreements. Pricing arrangements relating to packaging and test
services provided by ASI to the Company are subject to quarterly review and
adjustment, and pricing arrangements relating to wafer fabrication services
provided by ASI are subject to annual review and adjustment, in each case on the
basis of factors such as changes in the semiconductor market, forecasted demand,
product mix and capacity utilization and fluctuations in exchange rates, as well
as the mutual long-term strategic interest of the Company and ASI. The Company's
results of operations are also affected by declines over time in the average
selling prices for particular products. At times in the past the Company has
been able to offset, at least in part, the effect of such decline on its margins
by successfully developing and marketing new products with higher margins, such
as advanced leadframe and laminate products, and by taking advantage of
economies of scale and higher productivity resulting from volume production.
During 1998 the general slowdown in the semiconductor industry has resulted in
strong pricing pressures which have resulted in decreased average selling prices
("ASPs") on many of the Company's products. However, due to the shift in the
Company's product mix toward the higher-priced laminate products, ASPs for the
Company overall, increased in the first six months of 1998 compared with the
same period in 1997. However, there can be no assurance that the Company will be
successful at offsetting any such declines in the future. See "Risk
Factors -- Expansion of Manufacturing Capacity; Profitability Affected by
Capacity Utilization Rates" and "-- Competition."

Due to the concentration of market share in the semiconductor industry, the
Company has been largely dependent upon a small group of customers for a
substantial portion of its business. In 1995, 1996, 1997 and the six months
ended June 30, 1998, 34.1%, 39.2%, 40.1%, and 34.7%, respectively, of the
Company's net revenues were derived from sales to the Company's top five
customers, with 13.3%, 23.5%, 23.4% and 19.4%, respectively, derived from sales
to Intel. See "Risk Factors -- Customer Concentration; Absence of Backlog."

Relationship with ASI. In 1996, 1997 and the six months ended June 30,
1998, approximately 72%, 68% and 67%, respectively, of the Company's revenues
were derived from sales of services performed for the Company by ASI. In
addition, substantially all of the revenues of ASI in 1996, 1997 and the six
months ended June 30, 1998 were derived from services sold by the Company.
Historically, ASI has directly sold packaging and test services in Japan and
Korea. The Company assumed substantially all of the marketing rights for
services in Japan in January 1998. Also, the Company recently began offering
wafer fabrication services through ASI's new deep submicron CMOS foundry which
is capable of producing up to 15,000 8" wafers per month. See "Risk
Factors -- Risks Associated with New Wafer Fabrication Business." The Company
expects the proportion of its net revenues derived from sales of services
performed for the Company by ASI and the percentage of ASI's revenues from
services sold by the Company to increase as the Company begins selling the wafer
fabrication output of ASI's new wafer foundry. The Company has a first right to
substantially all of the packaging and test service capacity of ASI and the
exclusive right to all of the wafer output of ASI's new wafer foundry.

The Supply Agreements between the Company and ASI generally provide, among
other things, for periodic price reviews and adjustments and coordination of
research and development efforts regarding package design and packaging and
testing processes and technologies. The Supply Agreements have a five year
initial term and thereafter may be terminated upon five years' notice. There can
be no assurance that ASI will not terminate either Supply Agreement upon the
expiration of such initial term, or that if it does terminate a Supply
Agreement, that the Company will be able to enter into a new agreement with ASI
on terms favorable to the Company or at all. See "Relationship with ASI."

The Company expects that the businesses of the Company and ASI will
continue to remain highly interdependent by virtue of their supply relationship,
overlaps and family ties between their respective
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shareholders and management, financial relationships, coordination of product
and operation plans, joint research and development activities and shared
intellectual property rights. As a result, the Company's business, financial
condition and operating results will continue to be significantly dependent on
ASI, including without limitation ASI's ability to effectively provide the
contracted services on a cost-efficient and timely basis as well as ASI's
financial condition and results of operations. The Company will continue to be
controlled to a significant degree by James Kim and members of his family, and
Mr. Kim and other members of his family will also continue to exercise
significant influence over the management of ASI and its affiliates. In
addition, the Company and ASI will continue to have certain contractual and
other business relationships and may engage in transactions from time to time
that are material to the Company. Although any such material agreements and
transactions would require approval of the Company's Board of Directors, such
transactions will generally not require any additional approval by a separate
committee comprised of the disinterested members of the Board of Directors and
conflicts of interest may arise in certain circumstances. There can be no
assurance that such conflicts will not from time to time be resolved against the
interests of the Company. The Company currently has six directors, four of whom
are disinterested. Under Delaware corporate law, each director owes a duty of
loyalty and care to the Company, which if breached can result in personal
liability for the directors. In addition, the Company may agree to certain
changes in its contractual and other business relationships with ASI, including
pricing, manufacturing allocation, capacity utilization and capacity expansion,
among others, which in the judgment of the Company's management will result in
reduced short-term profitability for the Company in favor of potential long-term
benefits to the Company and ASI. There can be no assurance that the Company's
business, financial condition or results of operations will not be adversely
affected by any such decision. See "-- Liquidity and Capital Resources" and
"Risk Factors -- Dependence on Relationship with ASI; Potential Conflicts of
Interest."

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RESULTS OF OPERATIONS

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

THREE MONTHS     SIX MONTHS
ENDED           ENDED
YEAR ENDED DECEMBER 31,      JUNE 30,        JUNE 30,
------------------------   -------------   -------------
1995     1996     1997    1997    1998    1997    1998
------   ------   ------   -----   -----   -----   -----
(UNAUDITED)     (UNAUDITED)

Net revenues............  100.0%   100.0%   100.0%   100.0%  100.0%  100.0%  100.0%
Cost of revenues........   84.0     87.3     85.4     85.3    82.4    88.4    82.9
-----    -----    -----    -----   -----   -----   -----
Gross profit..........   16.0     12.7     14.6     14.7    17.6    11.6    17.1
Operating expenses:
Selling, general and
administrative.....    6.0      5.7      7.1      7.6     7.5     7.1     7.7
Research and
development........    0.9      0.9      0.6      0.6     0.5     0.5     0.5
-----    -----    -----    -----   -----   -----   -----
Total operating
expenses.........    6.9      6.6      7.7      8.2     8.0     7.6     8.2
-----    -----    -----    -----   -----   -----   -----
Operating income........    9.1      6.1      6.9      6.5     9.6     4.0     8.9
-----    -----    -----    -----   -----   -----   -----
Other (income) expense:
Interest expense,
net................    1.0      1.9      2.2      2.4     1.3     2.5     1.9
Foreign currency
(gain) loss........    0.2      0.2     (0.1)     0.5     0.2     0.0     0.5
Other expense, net....    0.7      0.3      0.6     (0.1)    0.5     0.2     0.8
-----    -----    -----    -----   -----   -----   -----
Total other
expense..........    1.9      2.4      2.7      2.8     2.0     2.7     3.2
-----    -----    -----    -----   -----   -----   -----
Income before income
taxes, equity in
income (loss) of ASI
and minority
interest..............    7.2      3.7      4.2      3.7     7.6     1.3     5.7
Provision for income
taxes.................    0.7      0.7      0.5      1.2     2.2     0.4     1.8
Equity in income (loss)
of ASI................    0.3     (0.1)    (1.2)      --      --      --      --
Minority interest.......    0.2      0.1     (0.5)      --      --     0.3      --
-----    -----    -----    -----   -----   -----   -----
Net income..............    6.6      2.8      3.0      2.5     5.4     0.6     3.9
Pro forma adjustment for
income taxes..........    1.1      0.2      0.3      0.3      --     0.4    (0.1)
-----    -----    -----    -----   -----   -----   -----
Pro forma net income....    5.5%     2.6%     2.7%     2.2%    5.4%    0.2%    4.0%
=====    =====    =====    =====   =====   =====   =====

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30,
1997

Net Revenues. The Company's net revenues consist of fees for the packaging
and testing of ICs which are consigned by customers to the Company's or ASI's
factories as well as fees for wafer fabrication services provided by ASI's new
wafer foundry. The Company's net revenues increased 9.8% to $384.7 million for
the three months ended June 30, 1998, compared to $350.5 million for the same
period in 1997. The growth in revenues was attributable to a significant change
in the proportion of the Company's revenues derived from traditional leadframe
products versus laminate products and advanced leadframe products as well as
revenue from Japanese customers resulting from the assumption of marketing
rights in Japan from ASI in January 1998. During the second quarter of 1998,
advanced and laminate products represented 54% of total net revenue compared to
36% during the same period in 1997. Because the Company's laminate and advanced
leadframe products tend to have higher average selling prices than traditional
leadframe products, this change in the mix of products sold during the second
quarter of 1998 helped to offset generally declining average selling prices for
the Company's products on an overall basis. Revenues from the Company's wafer
fabrication services accounted for approximately 3% of total revenues during the
second quarter of 1998.

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Gross Profit. Gross profit increased to $67.6 million, or 17.6% of net
revenues, for the three months ended June 30, 1998 from $51.4 million, or 14.7%
of net revenues, for the three months ended June 30, 1997 due primarily to
improved gross profit at the Company's newest factory, P3, compared with
negative gross profit for this factory in the three months ended June 30, 1997
while P3 was in its start-up phase. The devaluation of the Philippine peso
resulted in a reduction in the Company's peso denominated costs of its
Philippine factory operations, resulting in lower costs and improved gross
margins. The new supply agreement with ASI with respect to packaging and test
services, which went into effect on January 1, 1998, also provided the Company
with improved gross margins on products purchased from ASI during the three
months ended June 30, 1998 compared with the three months ended June 30, 1997.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $28.9 million, or 7.5% of net revenues,
during the three months ended June 30, 1998, compared to $26.7 million, or 7.6%
of net revenues, during the three months ended June 30, 1997, primarily as a
result of growth in the number of employees in the Company's marketing and sales
support groups of approximately 21% during 1997. Such growth has resulted in an
overall increase in personnel-related costs including salaries, benefits and
payroll taxes. The Company also incurred higher costs for office rental,
depreciation and other occupancy-related expenses in the three months ended June
30, 1998 as compared to the same period in 1997. This level of growth has not
continued during 1998.

Research and Development Expenses. Research and development expenses were
$1.9 million or 0.5% of net revenues during the three months ended June 30,
1998, compared to $2.0 million or 0.5% of net revenues for the same period in
1997.

Other (Income) Expense. Other expense decreased during the three months
ended June 30, 1998 to $7.6 million from $9.6 million for the same period in
1997. The decrease of $2.0 million was primarily attributable to a $3.4 million
reduction in interest expense and a $0.6 million decrease in foreign exchange
losses which was offset by a $2.1 million increase in other expenses, net.
Interest expense, net for the second quarter of 1998 decreased $3.4 million
compared to the corresponding period in 1997 due to reduced debt balances
following application of the proceeds of the Initial Public Offering. Other
expense, net increased by $2.1 million in the second quarter of 1998 compared to
the second quarter of 1997 primarily due to financing costs associated with the
accounts receivable sale agreement entered into by the Company in July, 1997.

Income Taxes. The Company's effective tax rate (after giving effect to the
pro forma adjustment for income taxes) for the six months ended June 30, 1998
was 29% as compared to 40.6% for the same period in 1997. The higher effective
tax rate in 1997 was attributable to losses at the Company's subsidiary which
owns P3. The Company's subsidiary that owns P3 operates under a tax holiday from
Philippine income taxes until the end of 2002. Accordingly, the company derived
no tax benefits as a result of these losses. To the extent P3 is profitable, the
Company's effective tax rate related to its Philippine operations during the tax
holiday will be less than the Philippine statutory rate of 35%.

Minority Interest. Minority interest represents ASI's ownership interest in
the consolidated net income of Amkor/Anam Pilipinas, Inc. ("AAP"). Accordingly,
the Company recorded a minority interest expense in its consolidated financial
statements relating to the minority interest in the net income of AAP. In the
second quarter of 1998, the Company purchased ASI's 40% interest in AAP and, as
a result, the Company now owns substantially all of the common stock of AAP. The
acquisition of the minority interest resulted in the elimination of the minority
interest liability and in additional goodwill amortization of approximately $2.5
million per year.

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

Net Revenues. The Company's net revenues increased 14.0% to $756.5 million
for the six months ended June 30, 1998, compared to $663.5 million for the same
period in 1997. The growth in revenues was attributable to a significant growth
in unit volumes of semiconductors packaged and tested by the Company as well as
revenue from Japanese customers resulting from the assumption of marketing
rights in Japan from ASI in January 1998. The proportion of the Company's
revenues derived from traditional leadframe products declined in the first half
of 1998 as compared to the corresponding period in 1997 while revenues from
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39

laminate products and advanced leadframe products increased during this period.
Because the Company's advanced leadframe and laminate products tend to have
higher average selling prices than traditional leadframe products, this change
in the mix of products sold during the first six months of 1998 helped to offset
generally declining average selling prices for the Company's products on an
overall basis. Revenues from the Company's wafer fabrication services accounted
for approximately 2% of total revenues during the first six months of 1998.

Gross Profit. Gross profit increased to $129.3 million, or 17.1% of net
revenues, for the six months ended June 30, 1998 from $76.9 million, or 11.6% of
net revenues, in the six months ended June 30, 1997 due primarily to improved
gross profit at the Company's newest factory, P3, compared with negative gross
profit for this factory in the six months ended June 30, 1997 while P3 was in
its start-up phase. In addition, increased unit volumes during the six months
ended June 30, 1998 allowed the Company to improve capacity utilization which in
turn resulted in improved gross margins. The devaluation of the Philippine peso
resulted in a reduction in the Company's peso denominated costs of its
Philippine factory operations, resulting in lower costs and improved gross
margins. The new Supply Agreement with ASI with respect to packaging and test
services, which went into effect on January 1, 1998, also provided the Company
with improved gross margins on products purchased from ASI during the six months
ended June 30, 1998 compared with the six months ended June 30, 1997.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $57.7 million, or 7.7% of net revenues,
during the six months ended June 30, 1998, compared to $47.3 million or 7.1% of
revenues during the six months ended June 30, 1997, as a result of growth in the
number of employees in the Company's marketing and sales support groups of
approximately 21% during 1997. Such growth has resulted in an overall increase
in personnel-related costs including salaries, benefits and payroll taxes. The
Company also incurred higher costs for office rental, depreciation and other
occupancy-related expenses in the first six months of 1998 as compared to the
first six months of 1997. This level of growth has not continued during 1998.

Research and Development Expenses. Research and development expenses were
$4.0 million or 0.5% of net revenues during the six months ended June 30, 1998,
compared to $3.5 million or 0.5% of net revenues for the same period in 1997.
The increase was primarily due to increased expenditures by the Company
resulting from increased headcount and corresponding payroll-related costs.

Other (Income) Expense. Other expense increased during the six months ended
June 30, 1998 to $24.0 million from $17.7 million for the same period in 1997.
The increase of $6.3 million was primarily attributable to a $3.7 million
increase in foreign exchange losses and a $4.6 million increase in other
expenses, net, offset in part by a $2.0 million reduction in interest expense,
net. Foreign exchange gains and losses resulted from significant changes in the
value of the Philippine peso relative to the U.S. dollar which during the six
months ended June 30, 1998 resulted in a $3.7 million dollar foreign exchange
loss consisting of realized and unrealized losses. By comparison, changes in the
value of the Philippine peso relative to the U.S. dollar resulted in a foreign
currency loss of $0.1 million for the six months ended June 30, 1997. Other
expense, net increased by $4.6 million for the six months ended June 30, 1998
compared to the same period in 1997 due primarily to financing costs associated
with the accounts receivable sale agreement entered into by the Company in July
1997 as well as one-time bank charges incurred during the six months ended June
30, 1998. Interest expense, net for the first half of 1998 decreased $2.0
million compared to the corresponding period in 1997 due to reduced debt
balances following application of the proceeds of the Initial Public Offering.

Income Taxes. The Company's effective tax rate (after giving effect to the
pro forma adjustment for income taxes) for the six months ended June 30, 1998
was 29% as compared to 64.0% for the same period in 1997. The high effective tax
rate in 1997 was attributable to losses at the Company's subsidiary which owns
P3. The Company's subsidiary that owns P3 operates under a tax holiday from
Philippine income taxes until the end of 2002. Accordingly, the Company derived
no tax benefits as a result of these losses. To the extent P3 is profitable, the
Company's effective tax rate related to its Philippine operations during the tax
holiday will be less than the Philippine statutory rate of 35%.

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Minority Interest. Minority interest represents ASI's ownership interest in
the consolidated net income of AAP. Accordingly, the Company recorded a minority
interest expense in its consolidated financial statements relating to the
minority interest in the net income of AAP. The Company has purchased ASI's 40%
interest in AAP and, as a result, the Company owns all of the common stock of
AAP. See "Prospectus Summary -- The Initial Public Offering." The acquisition of
the minority interest resulted in the elimination of the minority interest
liability and will result in additional amortization of approximately $2.5
million per year.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

Net Revenues. Net revenues for 1997 increased 24.3% to $1,455.8 million
from $1,171.0 million for 1996 primarily due to an increase in unit volumes of
semiconductors packaged and tested by the Company, offset in part by declines in
average selling prices for many of the Company's leadframe products. In
addition, the opening of P3, the Company's newest factory, and K4, ASI's newest
factory, in September 1996 enabled the Company to begin to expand sales of BGA
packages in 1997.

Gross Profit. Gross profit increased 43.1% to $213.1 million in 1997 from
$148.9 million in 1996, resulting in a gross margin of 14.6% for 1997 as
compared to 12.7% for 1996. Cost of revenues consists principally of packaging
and test service charges from ASI, costs of direct material for both the
Philippine factories and ASI and labor and other costs at the Philippine
factories. Gross margin increased primarily due to improved operating results at
P1 and P2 during the second half of 1997, which more than offset initial
operating losses and start-up costs incurred in connection with P3 during the
first half of 1997. Product mix changes toward more profitable product lines and
decreased labor costs from the devaluation of the Philippine peso were the
primary factors resulting in improved margins at the P1 and P2 factories.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 55.7% to $103.7 million, or 7.1% of net
revenues, in 1997 from $66.6 million, or 5.7% of net revenues, in 1996 primarily
due to increases in personnel in marketing and support to sustain the Company's
growth. The number of employees in the Company's marketing and sales support
groups increased during 1997 by approximately 21% over 1996. Such increase
resulted in an overall increase in personnel-related costs including salaries,
benefits and payroll taxes. The Company also incurred increased costs for office
rental, depreciation and other occupancy-related expenses. The Company does not
expect this level of growth in employees to continue in 1998. In addition to the
increased costs from its marketing and sales support groups, the Company
incurred approximately $8.0 million and $3.6 million in general and
administrative expenses in connection with its P3 operations and wafer
fabrication services group, respectively, during 1997. No similar costs were
incurred in 1996 as these groups represented start-up operations in 1997.

Research and Development Expenses. Research and development expenses
decreased 22.0% to $8.5 million, or 0.6% of net revenues, in 1997, from $10.9
million, or 0.9% of net revenues, in 1996. The decrease in research and
development costs principally reflected the termination in late 1996 of the
Company's efforts to develop its own laminate substrate manufacturing
capability.

Other (Income) Expense. Other expense increased 40.5% to $39.8 million in
1997 from $28.4 million in 1996 primarily as a result of increased interest
expense and increased other expenses. Interest expense for 1997 increased to
$38.6 million from $27.7 million in 1996 as the Company significantly increased
its borrowing to finance capacity expansion. See "-- Liquidity and Capital
Resources." Interest expense in each of the periods was offset in part by
interest income of $6.4 million and $5.5 million, respectively. Other expenses
increased primarily due to $2.4 million in costs relating to the Company's trade
receivables securitization transactions. See "-- Liquidity and Capital
Resources" and Note 3 of Notes to Consolidated Financial Statements.

Income Taxes. The Company's effective tax rate (after giving effect to the
pro forma adjustment for income taxes) for 1997 was 18% as compared to 25% for
1996. The decrease in the Company's effective tax rate in 1997 compared to 1996
was primarily attributable to income not taxed due to the tax holiday available
to the Company's subsidiary which owns P3 and the foreign exchange effects
described below. The Company recognized deferred tax benefits for unrealized
foreign exchange losses in 1997 which are recognized in the Philippines for tax
reporting purposes and relate to unrecognized net foreign exchange losses on
U.S. dollar
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denominated monetary assets and liabilities. See Note 10 of Notes to
Consolidated Financial Statements. These losses are not recognized for financial
reporting purposes as the U.S. dollar is the functional currency. These losses
will be realized for Philippine tax reporting purposes upon settlement of the
related asset or liability. The benefit derived from unrealized foreign exchange
losses was partially offset by an increase in the valuation allowance as the
Company concluded that it was more likely than not that their tax benefits could
be realized in the Philippines within the three year loss carryforward period.
The Company has structured its global operations to take advantage of lower tax
rates in certain countries and tax incentives extended to encourage investment.
The recorded provisions for income taxes are subject to changes upon examination
of the Company's tax returns by tax authorities in the United States, the
Philippines and elsewhere. Changes in the mix of income from the Company's
foreign subsidiaries, expiration of tax holidays and changes in tax laws and
regulations could result in increased effective tax rates for the Company.

Equity in Income (Loss) of ASI. In 1997, the Company recognized a loss of
$17.3 million resulting principally from the impairment of value in its
investment in ASI. In February 1998, the Company disposed of its investment in
ASI's common stock. See "Certain Transactions" and Note 6 of Notes to
Consolidated Financial Statements.

Minority Interest. Minority interest represents ASI's ownership interest in
the consolidated net income of AAP. During 1997, as a result of a settlement of
an intercompany loan, which otherwise had no effect on the combined pretax
income of the Company, AAP reported a net loss as a separate entity.
Accordingly, the Company recorded a minority interest benefit in its
consolidated financial statements relating to the minority interest in the net
loss.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Net Revenues. Net revenues in 1996 increased 25.6% to $1.17 billion from
$932.4 million in 1995. The increase was primarily due to an increase in units
sold together with an increase in sales of newer products, such as advanced
leadframe and laminate packages. This increase in sales of newer products offset
declines in average selling prices for many of the Company's other products.

Gross Profit. Gross profit in 1996 and 1995 was approximately $149 million
representing a decrease in gross margin to 12.7% in 1996 from 16.0% in 1995. The
decrease in gross margin was primarily attributable to increases in cost of
revenues due to $15.5 million in pre-operating and start-up costs associated
with P3, as well as increased packaging and test service charges paid to ASI.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 20.1% to $66.6 million, or 5.7% of net
revenues, in 1996 from $55.5 million, or 6.0% of net revenues, in 1995 as a
result of the addition of personnel and infrastructure to service increases in
customer demand. In addition, the Company continued its investments in new
information systems in order to enhance operating efficiencies and improve
customer service and support.

Research and Development Expenses. Research and development expenses
increased 25.2% to $10.9 million, or 0.9% of net revenues, in 1996 from $8.7
million, or 0.9% of net revenues, in 1995 as a result of increased staffing and
funding for the Company's efforts to develop laminate substrate manufacturing
capabilities, prior to termination of such efforts in late 1996.

Other (Income) Expense. Other expense increased 59.0% to $28.4 million in
1996 from $17.8 million in 1995 primarily as a result of increases in interest
expense, net, offset in part by a decrease in other expense, net. Interest
expense, net in 1996 increased to $22.2 million from $9.8 million in 1995 as the
Company significantly increased its borrowing to finance capacity expansion. See
"-- Liquidity and Capital Resources." As a result of this increase in debt, the
Company's interest expense increased to $27.7 million in 1996 from $17.3 million
in 1995.

Income Taxes. The Company's effective tax rate (after giving effect to the
pro forma provision for income taxes) for 1996 and 1995 was 25%. These rates
were different from the United States statutory rate primarily due to the impact
of lower tax rates, including tax holidays, in certain of the countries in which
the Company's subsidiaries are located. See Note 10 of Notes to Consolidated
Financial Statements.

40

42

QUARTERLY RESULTS

The following table sets forth certain unaudited consolidated financial
information, including as a percentage of net revenues, for the eight fiscal
quarters ended June 30, 1998. The Company disposed of its investment in ASI
common stock in February 1998. Also, the Company has purchased ASI's 40%
interest in AAP. After the disposition of the Company's interest in ASI there
was no other equity in income (loss) of ASI. Following the Company's acquisition
of ASI's interest in AAP, there was no minority interest related to AAP.
Consequently, this information is not presented below. The amounts of equity in
income (loss) of ASI and minority interest have historically varied
significantly by quarter depending on the income (loss) of ASI and AAP. See
"Reorganization" and Note 6 of Notes to Consolidated Financial Statements. The
Company believes that all necessary adjustments, consisting only of normal
recurring adjustments, have been included in the amounts stated below to present
fairly the selected quarterly information when read in conjunction with the
Consolidated Financial Statements and the Notes thereto included elsewhere
herein. The Company's results of operations have varied and may continue to vary
significantly from quarter to quarter and are not necessarily indicative of the
results of any future period. In addition, in light of the Company's recent
growth, the Company believes that period-to-period comparisons should not be
relied upon as an indication of future performance.

QUARTER ENDED
----------------------------------------------------------------------------------------
MARCH 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,
1996        1996       1996        1996       1997       1997       1997        1997
---------   --------   ---------   --------   --------   --------   ---------   --------
(IN THOUSANDS)

Net revenues..................  $270,327    $272,262   $285,784    $342,628   $313,019   $350,471   $380,130    $412,141
Cost of revenues..............   230,387     231,959    250,898     308,834    287,449    299,093    314,246     341,881
--------    --------   --------    --------   --------   --------   --------    --------
Gross profit................    39,940      40,303     34,886      33,794     25,570     51,378     65,884      70,260
Operating expenses:
Selling, general and
administrative............    13,752      15,948     16,716      20,209     20,608     26,657     26,829      29,632
Research and development....     2,100       2,757      3,071       3,002      1,485      2,030      2,236       2,774
--------    --------   --------    --------   --------   --------   --------    --------
Total operating
expenses................    15,852      18,705     19,787      23,211     22,093     28,687     29,065      32,406
--------    --------   --------    --------   --------   --------   --------    --------
Operating income..............    24,088      21,598     15,099      10,583      3,477     22,691     36,819      37,854
Total other expense, net......     3,316       6,052      9,853       9,135      8,165      9,577     11,242      10,851
--------    --------   --------    --------   --------   --------   --------    --------
Income before income taxes,
equity in income (loss) of
ASI and minority interest...    20,772      15,546      5,246       1,448     (4,688)    13,114     25,577      27,003
Provision for income taxes....     3,803       2,847        961         265     (1,497)     4,186        842       3,547
--------    --------   --------    --------   --------   --------   --------    --------
Income before equity in income
(loss) of ASI and minority
interest....................  $ 16,969    $ 12,699   $  4,285    $  1,183   $ (3,191)  $  8,928   $ 24,735    $ 23,456
========    ========   ========    ========   ========   ========   ========    ========

QUARTER ENDED
-------------------
MAR. 31,   JUNE 30,
1998       1998
--------   --------
(IN THOUSANDS)

Net revenues..................  $371,733   $384,724
Cost of revenues..............   310,056    317,106
--------   --------
Gross profit................    61,677     67,618
Operating expenses:
Selling, general and
administrative............    28,715     28,939
Research and development....     2,057      1,938
--------   --------
Total operating
expenses................    30,772     30,877
--------   --------
Operating income..............    30,905     36,741
Total other expense, net......    16,358      7,639
--------   --------
Income before income taxes,
equity in income (loss) of
ASI and minority interest...    14,547     29,102
Provision for income taxes....     5,050      8,437
--------   --------
Income before equity in income
(loss) of ASI and minority
interest....................  $  9,497   $ 20,665
========   ========

QUARTER ENDED
----------------------------------------------------------------------------------------
MARCH 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,
1996        1996       1996        1996       1997       1997       1997        1997
---------   --------   ---------   --------   --------   --------   ---------   --------

Net revenues..................     100.0%      100.0%     100.0%      100.0%     100.0%     100.0%     100.0%      100.0%
Cost of revenues..............      85.2        85.2       87.8        90.1       91.8       85.3       82.7        83.0
--------    --------   --------    --------   --------   --------   --------    --------
Gross profit................      14.8        14.8       12.2         9.9        8.2       14.7       17.3        17.0
--------    --------   --------    --------   --------   --------   --------    --------
Operating expenses:
Selling, general and
administrative............       5.1         5.9        5.8         5.9        6.6        7.6        7.1         7.2
Research and development....       0.8         1.0        1.1         0.9        0.5        0.6        0.5         0.6
--------    --------   --------    --------   --------   --------   --------    --------
Total operating
expenses................       5.9         6.9        6.9         6.8        7.1        8.2        7.6         7.8
--------    --------   --------    --------   --------   --------   --------    --------
Operating income..............       8.9         7.9        5.3         3.1        1.1        6.5        9.7         9.2
Total other expense, net......       1.2         2.2        3.5         2.7        2.6        2.8        3.0         2.6
--------    --------   --------    --------   --------   --------   --------    --------
Income before income taxes,
equity in income (loss) of
ASI and minority interest...       7.7         5.7        1.8         0.4       (1.5)       3.7        6.7         6.6
Provision for income taxes....       1.4         1.0        0.3         0.1       (0.5)       1.2        0.2         0.9
--------    --------   --------    --------   --------   --------   --------    --------
Income before equity in income
(loss) of ASI and minority
interest....................       6.3%        4.7%       1.5%        0.3%      (1.0)%      2.5%       6.5%        5.7%
========    ========   ========    ========   ========   ========   ========    ========

QUARTER ENDED
-------------------
MAR. 31,   JUNE 30,
1998       1998
--------   --------

Net revenues..................     100.0%     100.0%
Cost of revenues..............      83.4       82.4
--------   --------
Gross profit................      16.6       17.6
--------   --------
Operating expenses:
Selling, general and
administrative............       7.7        7.5
Research and development....       0.6        0.5
--------   --------
Total operating
expenses................       8.3        8.0
--------   --------
Operating income..............       8.3        9.6
Total other expense, net......       4.4        2.0
--------   --------
Income before income taxes,
equity in income (loss) of
ASI and minority interest...       3.9        7.6
Provision for income taxes....       1.3        2.2
--------   --------
Income before equity in income
(loss) of ASI and minority
interest....................       2.6%       5.4%
========   ========

41

43

The Company's revenues, gross profit and operating profit are generally
lower in the first quarter of the year as compared to the fourth quarter of the
preceding year primarily due to the combined effect of holidays in the United
States, the Philippines and Korea. Semiconductor companies in the United States
generally reduce their production during the holidays at the end of December
which results in a significant decrease in orders for packaging and testing
services during the first two weeks of January. In addition, the Company
typically closes its factories in the Philippines for holidays in January, and
ASI closes its factories in Korea for holidays in February. As a result of these
factors, the Company's net revenues are significantly reduced during the months
of January and February. The first and second quarters of 1998 have seen a
general slowdown in the semiconductor industry. This has resulted in quarter to
quarter growth of approximately 1% from the first quarter of 1998 to the second
quarter of 1998 as it relates to the Company's packaging and test operations.
Wafer fabrication services represented only 3% of total net revenue in the
second quarter of 1998. However, revenues from wafer fabrication services
increased 274% in the second quarter of 1998 compared to the first quarter of
1998.

Beginning in 1997 and continuing through the current quarter of 1998,
intense competition in the semiconductor industry worldwide led to decreases in
the average selling prices of many of the Company's products. These decreases
were partially offset by increases in sales of advanced leadframe and laminate
packages, which carry higher prices and gross margins. In addition, the
Company's cost of revenues as a percentage of revenues increased significantly
during the three quarters ended March 31, 1997 primarily as a result of initial
operating losses and start-up costs associated with P3. Cost of revenues was
also affected in the two quarters ended June 30, 1997, as the Company recognized
a $2.2 million write-off for custom laminate raw materials which were purchased
to meet customer orders which were subsequently cancelled. The combined effect
of these factors was to decrease the levels of profitability in the third and
fourth quarters of 1996 and the first quarter of 1997. In addition, the Supply
Agreement with respect to packaging and test services provides for quarterly
review and adjustment. During the quarterly review occuring in the second
quarter of 1998, ASI and the Company agreed to price reductions for services
provided by ASI which resulted in improved gross margins in the second quarter
of 1998 as compared to the first quarter of 1998.

Selling, general and administrative expenses increased during the second,
third and fourth quarters of 1997 primarily due to increased staffing levels at
the Company's marketing and sales support groups, as well as at its P3 factory
and wafer fabrication services group, which resulted in increased
employee-related costs. See "-- Results of Operations -- Year Ended December 31,
1997 Compared to Year Ended December 31, 1996 -- Selling, General and
Administrative Expenses."

Income tax rates in the third quarter of 1997 were lower compared to prior
periods as the Company recognized deferred tax benefits for unrealized foreign
exchange losses during the quarter, which are recognized for Philippine tax
reporting purposes but are not recognized for financial reporting purposes since
the U.S. dollar is the functional currency. Although similar circumstances
during the fourth quarter of 1997 resulted in the recognition of additional
deferred tax assets, their effect on the overall tax rates were mitigated by a
valuation allowance also recorded during the fourth quarter of approximately $22
million. See "-- Results of Operations -- Year End December 31, 1997 Compared to
Year Ended December 31, 1996 -- Income Taxes." As the majority of these tax
assets relate to fluctuations in the value of the Philippine peso, management is
unable to determine the impact to the effective tax rates which may occur as a
result of future exchange rate fluctuations.

The Company's quarterly operating results may vary significantly due to a
variety of factors including, among others, the cyclical nature of both the
semiconductor industry and the markets addressed by end-users of semiconductors,
the short-term nature of its customers' commitments, timing and volume of orders
relative to the Company's production capacity, changes in capacity utilization,
evolutions in the life cycles of customers' products, rescheduling and
cancellation of large orders, rapid erosion of packaging selling prices,
availability of manufacturing capacity, allocation of production capacity
between the Company's facilities and ASI's facilities, fluctuations in packaging
and test service charges paid to ASI, changes in costs, availability and
delivery times of labor, raw materials and components, effectiveness in managing
production processes, fluctuations in manufacturing yields, changes in product
mix, product obsolescence, timing of expenditures in anticipation of future
orders, availability of financing for expansion, changes in interest expense,
the ability to
42

44

develop and implement new technologies, competitive factors, changes in
effective tax rates, the loss of key personnel or the shortage of available
skilled workers, international political or economic events, currency and
interest rate fluctuations, environmental events, and intellectual property
transactions and disputes. Unfavorable changes in any of the above factors may
adversely affect the Company's business, financial condition and results of
operations. In addition, the Company increases its level of operating expenses
and investment in manufacturing capacity in anticipation of future growth in
revenues. To the extent the Company's revenues do not grow as anticipated, the
Company's financial condition and operating results may be materially adversely
affected. See "Risk Factors -- Fluctuations in Operating Results; Declines in
Average Selling Price."

LIQUIDITY AND CAPITAL RESOURCES

Following the application of the net proceeds to the Company of the Initial
Public Offering, at June 30, 1998, the Company had cash and cash equivalents of
$170.5 million and working capital of $168.4 million. The Company used the net
proceeds received from the Initial Public Offering primarily to repay an
aggregate of approximately $248 million of long-term debt, including $86 million
of amounts due to AUSA. In addition, the Company has used such net proceeds to
repay $102 million of short-term loans and $34 million to repurchase ASI's 40%
interest in AAP. See "Prospectus Summary -- The Initial Public Offering."
Following the application of the estimated net proceeds of the Initial Public
Offering to the Company together with repayments of debt prior to the Initial
Public Offering, the Company had $33 million of short-term borrowings and
current portion of long-term debt, $225 million of long-term debt and no amounts
due to AUSA. The remaining $176 million of such net proceeds will be available
for capital expenditures and working capital.

The Company has been investing significant amounts of capital to increase
its packaging and test services capacity, including the construction of P3, the
addition of capacity in the Company's other Philippine facilities and the
construction of a new manufacturing facility in the United States. Advanced
packaging processes are being developed at the U.S. facility. In 1995, 1996,
1997 and the six months ended June 30, 1998, the Company made capital
expenditures of $123.6 million, $185.1 million, $179.0 million and $51.9
million, respectively. Because the Company and ASI have added a significant
amount of packaging and test capacity in recent years, the Company intends to
decrease its level of capital expenditures in 1998. The Company currently
intends to spend approximately $140.0 million in capital expenditures in 1998,
primarily for capacity expansion at the Company's existing facilities in the
Philippines to meet expected demand. The Company believes that expenditure
levels could increase substantially in 1999 to provide the Company with adequate
capacity.

The Company believes that its existing cash balances, cash flow from
operations, available equipment lease financing and bank borrowings will be
sufficient to meet its anticipated cash requirements including working capital
and capital expenditures, for at least the next 12 months. There can be no
assurance, however, that lower than expected revenues, increased expenses,
increased costs associated with the purchase or maintenance of capital
equipment, decisions to increase planned capacity or other events will not cause
the Company to seek more capital, or to seek capital sooner than currently
expected. The timing and amount of the Company's actual capital requirements
cannot be precisely determined and will depend on a number of factors, including
demand for the Company's services, availability of capital equipment,
fluctuations in foreign currency exchange rates, changes in semiconductor
industry conditions and competitive factors. There can be no assurance that such
additional financing will be available when needed or, if available, will be
available on satisfactory terms. Failure to obtain any such financing could have
a material adverse effect on the Company. In addition, if the Company obtains
such financing by selling equity securities of the Company, the Company's
stockholders may experience significant dilution.

Prior to the Initial Public Offering, the Company met a significant portion
of its cash requirements for working capital and capital expenditures from a
combination of cash from operating activities, short-term and long-term bank
loans and financing obtained for the benefit of the Company by AUSA, a
wholly-owned financing subsidiary of ASI, as well as financing from a trade
receivables securitization agreement. Currently the Company does not rely on
financing obtained for its benefit by AUSA. Cash provided by operating
activities in 1995, 1996, 1997 and the six months ended June 30, 1998 was $53.3
million, $8.6 million, $250.1 million and $108.7 million, respectively. Cash
provided (used) by financing activities was $71.2 mil-
43

45

lion, $148.0 million, $(16.0) million and $59.8 million for 1995, 1996, 1997 and
the six months ended June 30, 1998, respectively.

At June 30, 1998, the Company's debt consisted of $33.0 million of
borrowings classified as current liabilities and $225.1 million of long-term
debt and capital lease obligations. As of June 30, 1998, the Company had
extended guarantees in respect of bank debt of affiliates in the amount of $5.0
million and in respect of vendor obligations of an affiliate in the amount of
$8.7 million, which amount may vary over time. At June 30, 1998, the Company had
$83.9 million in borrowing facilities with a number of domestic and foreign
banks, of which $57.3 million remained unused. Certain of the agreements with
such banks require compliance with certain financial covenants and restrictions,
and are collateralized by assets of the Company. These facilities are typically
revolving lines of credit and working capital facilities for one-year renewable
periods and generally bear interest at rates ranging from 9.4% to 17.2%.
Long-term debt and capital lease obligations outstanding at June 30, 1998 have
various expiration dates through April 2004, and accrue interest at rates
ranging from 5.8% to 13.0%. See Note 8 of Notes to Consolidated Financial
Statements.

The Company previously has met a significant portion of its financing needs
through financing arrangements obtained by AUSA, ASI's wholly-owned financing
subsidiary. A majority of the amount which was due to AUSA represented
outstanding amounts under financing obtained by AUSA for the benefit of the
Company, with the balance representing payables to AUSA for packaging and
service charges paid to ASI. Based on guarantees provided by ASI, AUSA obtained
for the benefit of the Company a continuous series of short-term financing
arrangements which generally were less than six months in duration, and
typically were less than two months in duration. Because of the short term
nature of these loans, the flows of cash to and from AUSA under this arrangement
have been significant. At June 30, 1998, the Company had no outstanding balances
with AUSA. Although the Company believes that alternative financing arrangements
will be available in the future, there can be no assurance that the Company will
be able to obtain alternative financing on acceptable terms or at all.

At June 30, 1998, the Company's obligation under the Receivables Sale (as
defined below) was guaranteed by ASI. ASI currently has a significant amount of
debt relative to its equity and is contingently liable under guarantees in
respect of debt of its subsidiaries and affiliates, including AUSA. As of
December 31, 1997, ASI and its consolidated subsidiaries had guarantees
outstanding in respect of debt of its non-consolidated subsidiaries and
affiliates in the Anam Group in the aggregate amount of approximately W857
billion, including the guarantees of the Company's loans. As a result of its
relationship with ASI, the Company's business, financial condition and operating
results are significantly dependent on ASI. There can be no assurance that AUSA
will be able to obtain additional guarantees, if necessary, from ASI. In
addition, a deterioration in ASI's financial condition could trigger defaults
under ASI's guarantees, causing acceleration of such loans. See
"-- Overview -- Relationship with ASI," "Risk Factors -- Dependence on
Relationship with ASI; Potential Conflicts of Interest" and "Relationship with
ASI".

In July 1997, the Company entered into a trade receivables securitization
agreement with a commercial financial institution. Under the terms of the
agreement, the financial institution has committed to purchase, with limited
recourse, all right, title and interest in eligible receivables, as defined in
the agreement, up to $100 million (the "Receivables Sale"). Funds received
pursuant to the agreement reflect a discount of LIBOR plus 0.375% from accounts
receivable sold. The Company applied approximately $83.4 million of the initial
Receivables Sale proceeds together with approximately $17 million of working
capital to reduce the Company's indebtedness to AUSA, which amounts were
advanced by AUSA to entities controlled by members of James Kim's family. See
Note 3 of Notes to Consolidated Financial Statements.

The Company incurs charges from ASI for assembly and test services
performed on a monthly basis. Historically the Company has paid ASI for these
services on net 30-day terms. On July 21, 1998 the Company entered into a
prepayment agreement with ASI relating to assembly and test services. In
accordance with the agreement, the Company made a $50 million non-interest
bearing advance to ASI, representing approximately one month's charges for
assembly and test services. The Company will offset this advance against
billings by ASI for assembly and test services provided in the fourth quarter of
1998.

44

46

In connection with its wafer foundry agreement with TI, the Company and TI
agreed to revise certain payment and other terms contained in the Master
Purchase Agreement. As part of this revision, TI agreed to advance ATI $20
million in June 1998 as a prepayment of wafer foundry services to be provided in
the fourth quarter of 1998. The Company in turn advanced these funds to ASI as a
prepayment for foundry service charges. The Company will offset the advance to
ASI against billings by ASI in the fourth quarter of 1998. Under the terms of
the revision to the Master Purchase Agreement, the Company is ultimately
responsible to reimburse TI for any inability of ASI to comply with the terms of
the agreement.

Prior to the consummation of the Reorganization, AEI was treated for U.S.
federal and certain state tax purposes as an S Corporation under the Internal
Revenue Code of 1986 and comparable state tax laws. As a result, AEI did not
recognize U.S. federal corporate income taxes. Instead, up until the Termination
Date, Mr. and Mrs. Kim and the Kim Family Trusts had been obligated to pay U.S.
federal and certain state income taxes on their allocable portion of the income
of AEI. The Company, Mr. and Mrs. Kim and the Kim Family Trusts have entered
into tax indemnification agreements providing that the Company will be
indemnified by such stockholders, with respect to their proportionate share of
any U.S. federal or state corporate income taxes attributable to the failure of
AEI to qualify as an S Corporation for any period or in any jurisdiction for
which S Corporation status was claimed through the Termination Date. The tax
indemnification agreements also provide that under certain circumstances the
Company will indemnify Mr. and Mrs. Kim and the Kim Family Trusts if such
stockholders are required to pay additional taxes or other amounts attributable
to taxable years on or before the Termination Date as to which AEI filed or
files tax returns claiming status as an S Corporation. AEI has made various
distributions to Mr. and Mrs. Kim and the Kim Family Trusts which have enabled
them to pay their income taxes on their allocable portions of the income of AEI.
Such distributions totaled approximately $19.8 million, $13.0 million, $5.0
million and $33.1 million in 1995, 1996, 1997, and the first six months of 1998,
respectively. The Company believes that the amount of such undistributed net
income was less than $1.0 million at June 30, 1998. See "Reorganization" and
Notes 1 and 10 of Notes to Consolidated Financial Statements.

FOREIGN CURRENCY TRANSLATION GAINS AND LOSSES

The Company's subsidiaries in the Philippines maintain their accounting
records in U.S. dollars. This is due to the fact that all sales, the majority of
all bank debt and all significant material and fixed asset purchases of such
subsidiaries are denominated in U.S. dollars. As a result, the Philippine
subsidiaries' exposure to changes in the Philippine peso/U.S. dollar exchange
rate relates primarily to certain receivables and advances and other assets
offset by payroll, pension and local liabilities. To minimize its foreign
exchange risk, the Company selectively hedges its net foreign currency exposure
through short-term (generally not more than 30 to 60 days) forward exchange
contracts. To date, the Company's hedging activity has been immaterial.

45

47

BUSINESS

The following discussion contains forward-looking statements within the
meaning of the U.S. federal securities laws, including statements regarding the
anticipated growth in the market for the Company's products, the Company's
anticipated capital expenditures and financing needs, the Company's expected
capacity utilization rates, the belief of the Company as to its future operating
performance and other statements that are not historical facts. Because such
statements include risks and uncertainties, actual results may differ materially
from those anticipated in such forward-looking statements as a result of certain
factors, including those set forth herein, in "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Amkor is the world's largest independent provider of semiconductor
packaging and test services. The Company believes that it is also one of the
leading developers of advanced semiconductor packaging and test technology in
the industry. The Company offers a complete and integrated set of packaging and
test services including IC package design, leadframe and substrate design, IC
package assembly, final testing, burn-in, reliability testing, and thermal and
electrical characterization. As of June 30, 1998, the Company had in excess of
150 customers, including many of the largest semiconductor companies in the
world. Such customers include, among others, Advanced Micro Devices, Inc.,
International Business Machines Corp., Intel, Lucent Technologies, Inc.,
Motorola, Inc., National Semiconductor Corp., Philips Electronics N.V.,
SGS-THOMSON Microelectronics N.V., Siemens AG and TI.

The Company recently began offering wafer fabrication services through
ASI's new deep submicron CMOS foundry. This foundry is currently capable of
producing up to 15,000 8" wafers per month. Through a strategic relationship
with TI, the Company and ASI have qualified .25 micron CMOS process technology,
and TI has agreed to provide to ASI .18 micron CMOS process technology during
1998. This foundry will primarily manufacture digital signal processors
("DSPs"), application specific integrated circuits ("ASICs") and other logic
devices. By leveraging the Company's leading position in semiconductor packaging
and test services, the new wafer fabrication services have enabled the Company
to become one of the first providers of a fully integrated, turnkey
semiconductor fabrication, packaging and test service solution.

The Company provides packaging and test services through its three
factories in the Philippines as well as the four factories of ASI in Korea
pursuant to a Supply Agreement between the Company and ASI, under which ASI
provides packaging and test services to the Company. In 1996, 1997 and the first
six months of 1998, ASI provided packaging and test services representing
approximately 72%, 68% and 67% respectively, of the Company's net revenues.

46

48

INDUSTRY BACKGROUND

Manufacturing Process

The production of a semiconductor is a complex process that requires
increasingly sophisticated engineering and manufacturing expertise. The
production process can be broadly divided into three primary stages: (i) wafer
fabrication, (ii) assembly of die into finished devices (referred to as
"packaging") and (iii) testing of finished devices and other back-end processes.

[ORGANIZATIONAL CHART]

The wafer fabrication process begins with the generation of a mask that
defines the circuit patterns for the transistors and interconnect layers that
will be formed on the raw silicon wafer. The transistors and other circuit
elements are formed by repeating a series of process steps wherein a
photosensitive material is first deposited on the wafer, the material is exposed
to light through the mask in a photolithography process, and finally, the
unwanted material is etched away, leaving only the desired circuit pattern on
the wafer. By stacking up the various patterns, the individual elements of the
semiconductor are defined. The final step in the wafer fabrication process is to
electrically test each individual chip in a wafer probe process in order to
identify the good chip for packaging.

The fabricated wafers are then transferred to packaging facilities.
Semiconductor packaging serves to protect the chip, facilitate integration into
electronic systems, and enable the dissipation of heat from the devices. In the
packaging process, the wafer is diced into its individual die which are then
separated from the wafer and attached to a substrate via an epoxy adhesive.
Leads on the substrate are then connected by extremely fine gold wires to the
input/output ("I/O") terminals on the chips through the use of automated
machines known as "wire bonders". Each die is then encapsulated in a plastic
molding compound, thus forming the package, which then goes through several
additional finishing steps to prepare it for testing.

Following packaging, each packaged device is then tested utilizing a
sophisticated test platform and program which tests the many different operating
specifications of the IC, including functionality, voltage,

47

49

current and timing. The completed devices are either shipped back to the
customer or shipped directly to their final destination.

Trends Toward Outsourcing

Historically, semiconductor companies manufactured semiconductors primarily
in their own factories. Independent packagers of semiconductors were used solely
to handle the overflow volume requirements of semiconductor companies.
Outsourcing of final testing and wafer fabrication was virtually non-existent in
the early days of the industry. Over the past fifteen years, however, the need
for independent semiconductor packaging and test services has grown dramatically
for several reasons.

First, semiconductor companies are facing ever-increasing demands for
miniaturization, higher lead counts and improved thermal and electrical
performance in IC packages. As a result of this trend, semiconductor packaging
is now viewed as an enabling technology requiring sophisticated expertise and
technological innovation. Independent providers of packaging and test services
have developed substantial expertise in packaging and test technology and new
package innovation. Semiconductor companies, having found it difficult to keep
pace using their internal resources, have come to rely increasingly on the
independent packaging and test services providers as a key source for new
technology development and innovation.

Second, semiconductor companies are increasingly seeking to shorten their
time to market for new products. Having the right packaging technology and
capacity in place is a critical factor in reducing time to market. As packaging
solutions are identified for a specific product, semiconductor companies
frequently do not have the equipment or expertise to implement such solutions in
the volumes required, nor sufficient time to develop these capabilities before
introducing a new product into the market. For this reason, semiconductor
companies are increasingly leveraging the resources and capabilities of
independent packaging and test companies to deliver their new products to market
more quickly.

Third, the packaging and testing of ICs has evolved into an increasingly
complex process that requires substantial investment in specialized equipment
and facilities. For example, the investment in facilities and equipment
necessary for a processing line capable of packaging 100 million ball grid array
("BGA") packages per year can be as much as $200 million. As a result of the
substantial cost of this manufacturing equipment, the equipment must be utilized
at a high capacity level for an extended period of time in order to be cost
effective. With semiconductor companies facing increasingly shorter product life
cycles, faster new product introductions and the need to continuously update or
replace packaging equipment to accommodate new products, it has become
increasingly difficult for semiconductor companies to sustain such high levels
of capacity utilization. Independent providers of packaging and test services,
on the other hand, can use existing equipment at high utilization levels over a
longer period of time for a broad range of customers, effectively extending the
life of the equipment.

Fourth, as the cost to build a new wafer fabrication facility has increased
to over $1 billion, semiconductor companies have been forced to concentrate
their capital resources on core wafer manufacturing activities. As a result,
semiconductor companies are increasingly seeking to use independent packaging
and test providers who have the ability to invest the capital to develop new
packaging and test capacity. The Company believes that as the cost to construct
new wafer fabrication facilities continues to increase, semiconductor
manufacturers will increasingly seek to outsource packaging and test services.

Fifth, there has been a recent growth of "fabless" semiconductor companies
whose core competency and focus is entirely on the semiconductor design process.
According to industry estimates, sales by fabless semiconductor companies have
grown significantly. The significant growth in the sales by fabless
semiconductor companies has been driven in large part by the ability of such
companies to effectively outsource virtually every significant step of the
semiconductor manufacturing process. This development has allowed fabless
semiconductor companies to introduce new semiconductors very quickly without
committing significant amounts of capital and other resources. The Company
believes that increases in the number of fabless semiconductor companies will
continue to be a significant driver of growth in the independent semiconductor
manufacturing industry.

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50

These trends, combined with the growth in the number of ICs being produced
and sold, are driving increasing demand for independent packaging and test
services. Today, nearly all of the world's major semiconductor companies use
independent packaging and test service providers for at least a portion, if not
all, of their packaging and test needs.

Many of the same forces that have driven the growth of independent
packaging and test have also been driving increasing demand for independent
wafer fabrication services. Moreover, because the cost of new wafer fabrication
facilities has been rising steadily, many semiconductor companies are seeking to
leverage their capital resources by outsourcing some or all of their wafer
fabrication needs. This is particularly true for newer, smaller geometry
technologies that are necessary for producing the newest, leading edge ICs,
because they cannot be produced in many semiconductor companies' existing wafer
fabrication facilities. As the demand for ICs with smaller geometries increases,
the Company believes semiconductor companies will increasingly utilize
independent wafer manufacturers.

The Need for Turnkey Solutions

The growing demand for independent wafer fabrication, packaging, and test
services has generally been served by separate wafer fabrication, packaging or
test companies. This creates inefficiencies for semiconductor companies which
must manage the delays, complex logistics and uncertainty inherent in utilizing
a different service provider for each step of the semiconductor manufacturing
process. Only a very few, if any, independent service providers have the
capability of providing a combination of wafer fabrication, packaging and test
services.

THE AMKOR SOLUTION

Amkor is the largest independent provider of semiconductor packaging and
test services in the world. With its leading edge process technology and package
design expertise, the Company is able to provide its customers with a broad
range of new packaging solutions that enable faster, smaller and more powerful
ICs. Due to its size and industry-leading position, the Company is capable of
implementing and utilizing the capital equipment necessary for both new and
mature packages, thereby affording its customers an attractive alternative in
their capital allocation decisions. In addition, with ASI's new wafer
fabrication capabilities, the Company is able to offer a fully integrated,
turnkey semiconductor manufacturing solution.

STRATEGY

Principal elements of the Company's strategy include:

Maintain Product Technology Leadership. The Company believes that it is one
of the world's leading designers and developers of new semiconductor packaging
technology. The Company has designed and developed such leading edge leadframe
and laminate products as its PowerQuad(R), SuperBGA(R), fleXBGA(TM) and
ChipArray(TM) BGA packages. The Company is focusing additional design and
development efforts on new generations of the BGA packaging format and on "flip
chip" die attach technologies where the I/O pads on the chip are attached
directly to the package's substrate rather than with wire-bonded connections.
The Company employs a staff of leading semiconductor packaging technologists and
undertakes significant research and development activities in its Chandler,
Arizona and Philippines locations, as well as through joint development
activities with ASI's development staff in Korea. The Company intends to
continue to maintain its leading packaging technology position.

Maintain Advanced Manufacturing Capabilities. The Company believes that its
tradition of manufacturing excellence has been a key factor in its success in
attracting and retaining customers, and it is committed to maintaining that high
level of excellence. Key to this effort is the Company's commitment to
continuous advancement of its process technology. The Company's development
teams work with its customers, suppliers, and others to develop new processing
technologies as well as pursue continuous improvements in the Company's existing
processing capabilities. These efforts have directly resulted in reduced time to
market, increased quality, and lower manufacturing costs.

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Leverage Scale and Scope of the Company's Packaging and Test
Capabilities. The Company believes that its scale of operations and its breadth
of product offerings provide it with several competitive advantages. First, the
Company believes that its size and position in the industry allow it certain
advantages in procuring key materials and manufacturing equipment. Second, the
Company is able to capitalize on the substantial economies of scale that result
from high utilization rates of its capital equipment, thereby lowering the
Company's per unit manufacturing costs and facilitating cost-effective solutions
for its customers. The Company's scale also allows it to offer an
industry-leading breadth of product offerings and to be a single source for many
of its customers' packaging requirements. The Company offers over 450 different
package formats and sizes with a variety of processing and materials options.
The Company added 175 and 139 new packaging options, respectively, in 1996 and
1997. The Company is committed to continued expansion of both its size of
operations and its scope of product and service offerings.

Establish Industry Packaging Standards. The Company believes that by
bringing new package designs to market early, its designs are more likely to
become industry standards, which in turn will allow the Company to obtain higher
margins than its competitors for such new designs. The Company also seeks to
capture substantial market share and to spur the industry-wide adoption of its
new packages by investing aggressively in expanding its manufacturing capacity
for these packages. As a result, it is one of the leading providers of advanced
packaging solutions such as thin package formats and BGA packages. The Company
believes these package types will comprise some of the highest growth and more
profitable segments of the packaging market in coming years.

Enhance Customer and Supplier Relationships. As the world's largest
independent provider of semiconductor packaging and test services, the Company
has developed long-standing strategic relationships with leading semiconductor
and electronics companies, its suppliers, and other developers of new
semiconductor technologies. The Company believes that these relationships have
allowed it to stay ahead of the constantly advancing demand curve for
independent packaging services. The Company has repeatedly developed
leading-edge packaging technologies that have met the requirements of newer IC
devices and that have been quickly accepted in the marketplace. The Company's
alliances with certain of its key equipment and material suppliers have enabled
the Company to achieve packaging and manufacturing process innovation and cost
reduction. Developing and maintaining these relationships within the industry
will continue to be an integral part of the Company's overall strategic
direction.

Focus on Customer Service and Support. The Company believes that its focus
on customer service and support has been crucial in attracting and retaining
leading semiconductor companies as its customers. The Company has a firmly
established customer-oriented culture. To provide a dedicated customer support
infrastructure and to stay abreast of customers' expectations, the Company has
strategically established technical and sales teams near major customer
facilities and in acknowledged technology centers. In addition, the Company has
implemented direct electronic links with its customers to enhance communication
and facilitate real-time engineering data and order information flow.

Provide an Integrated, Turnkey Solution. The Company seeks to provide a
complete turnkey solution comprising wafer fabrication, packaging and test
services. The Company recently began providing wafer fabrication services
through ASI's new deep submicron CMOS foundry. With the addition of wafer
fabrication, the Company is able to provide all stages of IC production for its
customers from the fabrication of wafers through the shipment of finished ICs.
The Company believes this integration will enable customers to improve the cost
and performance of their ICs and achieve faster time to market for both new
product introductions and production lead times.

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PRODUCTS

Packaging

The Company offers a broad range of package formats designed to provide
customers with a full array of packaging solutions for both commodity and
advanced products. The Company's products are divided into three product
families: traditional leadframe, advanced leadframe, and laminate products as
shown in the following tables.

- --------------------------------------------------------------------------------------------------

TRADITIONAL LEADFRAME PRODUCTS
- --------------------------------------------------------------------------------------------------
- ------------------------------------------
PACKAGE TYPE                               NUMBER OF LEADS  APPLICATIONS
- ------------------------------------------ ---------------  --------------------------------------

PDIP (Plastic Dual In-line Packages)            8-48        General purpose plastic IC package for
SPDIP (Shrink DIP)                              28-64       consumer electronic products such as
games, telephones, TV, audio equipment
and computer peripherals.
- --------------------------------------------------------------------------------------------------
Hermetic                                       Custom       A line of mature, ceramic predominant
packages used especially for
high-reliability applications
(military, space and commercial
aviation).
- --------------------------------------------------------------------------------------------------
PLCC (Plastic Leaded Chip Carrier)              20-84       Used for logic, gate arrays, DAC,
processors and chip sets used in
larger form-factor items (copiers,
printers, scanners, desktop PCs,
electronic games and monitors).
- --------------------------------------------------------------------------------------------------
SOIC (Small Outline Integrated Circuit)         8-44        Designed for needs of lower lead
devices. End uses include consumer
audio/video and entertainment
products, pagers, cordless telephones,
fax machines, copiers, printers, PC
peripherals and automotive parts.
- --------------------------------------------------------------------------------------------------
MQFP (Metric Quad Flat Package)                44-304       Adapted to meet the increasing
challenges of advanced
processors/controllers, DSPs, ASICs,
video-DAC, PC chip sets, gate arrays,
logic devices, multimedia and other
technologies for consumer, commercial,
office, automotive, PC and industrial
products.
- --------------------------------------------------------------------------------------------------
PowerQuad(R)                                   100-304      Higher performance thermally enhanced
QFP package. Used for DSPs,
programmable logic devices,
microprocessors and micro-controllers,
high-speed and field programmable gate
array logic devices, ASIC and other
technologies requiring more thermal
performance than offered by standard
QFP packages.
- --------------------------------------------------------------------------------------------------
PowerSOP(TM)                                    8-36        Higher performance thermally enhanced
SOIC package. Used for wireless RF
telecom devices, automotive,
industrial, disk drive, pagers, and
other technologies requiring more
thermal performance than offered by
standard SOIC packages.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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- ------------------------------------------
ADVANCED LEADFRAME PRODUCTS
- --------------------------------------------------------------------------------------------------
- ------------------------------------------
PACKAGE TYPE                               NUMBER OF LEADS  APPLICATIONS
- ------------------------------------------ ---------------  --------------------------------------

TQFP (Thin Quad Flat Package)                  32-256       Designed for lightweight, portable
electronics requiring broad
performance characteristics, including
notebook computers, desktop PCs,
audio/video and telecommunications
products, cordless/RF devices, office
equipment, disk drives and
communication boards (e.g., Ethernet
and ISDN).
- --------------------------------------------------------------------------------------------------
TSOP (Thin Small Outline Package)               32-48       Primary application is for SRAM, DRAM,
FLASH and FSRAM memory devices. End
uses include PC cards, PCMCIA
form-factor products, cameras
(still/video) and notebook computers.
- --------------------------------------------------------------------------------------------------
TSSOP (Thin Shrink Small Outline Package)       8-80        Designed for gate drivers,
controllers, logic, analog, memory
(SRAM, DRAM, EPROM, E2PROM),
comparators and optoelectronics.
- --------------------------------------------------------------------------------------------------
SSOP (Shrink Small Outline Package)             8-64        Designed to enable end-products such
as pagers, portable audio/video
products, disk drives, and wireless
applications to be reduced in size and
weight.
- --------------------------------------------------------------------------------------------------

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- ------------------------------------------
LAMINATE PRODUCTS
- --------------------------------------------------------------------------------------------------
- ------------------------------------------
PACKAGE TYPE                               NUMBER OF BALLS  APPLICATIONS
- ------------------------------------------ ---------------  --------------------------------------

PBGA (Plastic Ball Grid Array)                 119-544      Semiconductors for end users which
require the enhanced performance
provided by the integrated design of
PBGA, including microprocessors/
controllers, ASICs, gate arrays,
memory, DSPs and PC chip sets.
Designed for applications where
improved portability, form-factor and
high-performance are necessary,
including wireless products, cellular,
GPS, notebook computers, video cameras
and disk drives.
- --------------------------------------------------------------------------------------------------
SuperBGA(R)                                    64-600       Designed for high-speed, high-power
semiconductors such as ASICs,
microprocessors, gate arrays, and
DSPs. Applications include wireless
products, notebook computers, PDAs,
video GUI and CPU/BUS boards.
- --------------------------------------------------------------------------------------------------
fleXBGA(TM)                                    133-412      Higher performance, lower profile
package than PBGA due to size
reduction made possible by denser
substrate. Ideal for high performance
disk drives, cellular phones, pagers,
wireless communications, DSPs and
micro-controller applications.
- --------------------------------------------------------------------------------------------------
MicroBGA(TM)                                    8-200       Especially suited for memory devices
such as FLASH, SRAM, DRAM and FSRAM
technologies, microprocessors/
controllers and high value ASICs
requiring a low height, weight and
size packaging. End uses include
cellular and other telecommunications
products, disk drives,
notebooks/sub-notebooks, PDAs,
wireless and consumer systems and
memory boards.
- --------------------------------------------------------------------------------------------------
ChipArray(TM)                                  36-128       Designed for semiconductors such as
memory, analog, ASICs and PLDs
requiring a smaller package than
conventional PBGAs. Applications
include cellular and other
telecommunications, notebooks/sub-
notebooks, PDAs, wireless systems and
GPS.
- --------------------------------------------------------------------------------------------------
FlipChip                                         N/A        An enabling interconnect technology
which can be utilized in advanced IC
packages such as PBGA, chip scale and
flex circuit solutions to support
improved electrical requirements and
very high semiconductor density in
very small systems.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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Traditional Leadframe Products. Traditional leadframe products are the most
widely recognized package types and are characterized by a chip encapsulated in
a plastic mold compound with metal leads surrounding the perimeter. This package
type has evolved from packages designed to be plugged into the circuit board by
inserting the leads into holes on the circuit board to the more modern
surface-mount design, in which the leads are soldered to the surface of the
circuit board. Specific package customization and evolutionary improvements are
continually being engineered to enable improved electrical performance and
multi-chip capability, as well as smaller printed circuit board footprints. The
Company offers a wide range of lead counts and body sizes within this product
group to satisfy customer die size variations. In addition, the Company offers
power versions of the SOP, PLCC, and MQFP package types which are specially
designed to handle today's high power ICs that need with enhanced heat
dissipation characteristics.

Advanced Leadframe Products. The Company's customers are seeking
increasingly thinner packages, which has led the Company to develop newer, more
advanced leadframe products. The Company's advanced leadframe products are
similar in design to its traditional leadframe products. However, the advanced
leadframe products generally are thinner and smaller, have more leads, and have
advanced thermal and electrical characteristics which are necessary for many of
today's more advanced semiconductor applications. The TSOP, TSSOP and SSOP
packages are significantly smaller than the Company's traditional SOIC products,
while the TQFP package is a smaller version of the MQFP package. The Company
also offers power versions of these package types. The Company plans to continue
to develop increasingly smaller versions of these products to keep pace with
continually shrinking die sizes and increasing demands for miniaturization.

Laminate Products. The laminate product family represents the newest and
fastest growth area for the Company and consists of products employing the BGA
format which utilize a laminate (plastic or tape) substrate rather than a
leadframe substrate. BGA technology was first introduced in the industry as a
solution to problems associated with the increasingly high lead counts required
for advanced semiconductors. As the number of leads surrounding the IC
increased, packagers attempted to maintain the size of the package by increasing
the proximity of the leads to one another. As a result, however, these high lead
count packages experienced significant electrical shorting problems and required
the development of increasingly sophisticated and expensive techniques for
producing circuit boards to accommodate the density of the leads. The BGA
methodology solved this problem by effectively creating leads on the bottom of
the package in the form of small bumps or balls. These balls can be evenly
distributed across the entire bottom surface of the package, allowing greater
distance between the individual leads. The Company's first product in this
family was the plastic BGA. The Company has subsequently designed additional BGA
type packages which include features that enable low cost, high volume
manufacturing methods as well as higher performance packages. These new laminate
products include: SuperBGA(R), which includes a copper heat-sink for heat
dissipation and is designed for very low profile, high power applications;
ChipArray(TM), which allows the package to be as small as 1.5 mm larger than the
chip itself; and MicroBGA(TM), which is designed to be approximately the same
size as the chip and uses a tape substrate rather than a plastic laminate. The
Company is currently designing newer versions of BGA packages to enable further
significant reductions in package size.

Test and Related Services

The Company also provides its customers with semiconductor test services.
The Company has the capability to test digital logic, analog and mixed signal
products. The combination of the Company's test operations together with ASI's
Korean test operations comprises one of the largest independent test operations
in the world. Providing test services requires a high level of communication and
integration between the Company and its customers. In order to enable
semiconductor companies to improve their time to market and to reduce costs,
there has been an increasing trend to put packaging and test operations in the
same location. The Company has capitalized on this trend by supplying its own
testers or by supplementing customer-supplied testers with handlers and other
related equipment.

Although test services accounted for only 3.5% of the Company's total 1997
revenue and 13% of the total units shipped, the Company expects test services to
grow significantly during the next several years as customers seek to reduce the
time to market for their products by using contractors with test services at the

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packaging site. In addition to final test services, the Company provides a full
range of other related services, such as burn-in test services, "dry pack"
services, "tape and reel" packing, and wafer "probing" or "sorting."

The following table sets forth, for the periods indicated, the amount of
the Company's packaging and test net revenues and the percentage of such net
revenues by product type:

SIX MONTHS
ENDED
1994               1995               1996               1997          JUNE 30, 1998
----------------   ----------------   ----------------   ----------------   ----------------
REVENUES     %     REVENUES     %     REVENUES     %     REVENUES     %     REVENUES     %
--------   -----   --------   -----   --------   -----   --------   -----   --------   -----
(DOLLARS IN MILLIONS)

Traditional Leadframe.....    $487      85.1%    $699      75.0%   $  792     67.6%   $  801     55.0%   $336.1     45.4%
Advanced Leadframe........      53       9.2      157      16.8       220     18.8       312     21.5     172.5     23.3
Laminate..................       3       0.5       15       1.6        90      7.7       248     17.0     195.5     26.4
Testing and Other.........      30       5.2       61       6.6        69      5.9        95      6.5      36.3      4.9
----     -----     ----     -----    ------    -----    ------    -----    ------    -----
Total Packaging and
Test Net Revenues...    $573     100.0%    $932     100.0%   $1,171    100.0%   $1,456    100.0%   $740.4    100.0%
====     =====     ====     =====    ======    =====    ======    =====    ======    =====

Wafer Fabrication

The Company recently began offering wafer fabrication services through
ASI's new deep submicron CMOS foundry. This foundry is currently capable of
producing up to 15,000 8" wafers per month. Through a strategic relationship
with TI, the Company and ASI have qualified .25 micron CMOS process technology,
and TI has agreed to provide to ASI .18 micron CMOS process technology during
1998. The Company's right to the supply of wafers from the foundry is subject to
the TI Manufacturing and Purchasing Agreement, pursuant to which TI has agreed
to purchase at least 40% of the capacity of the foundry and under certain
circumstances has the right to purchase 70% of the capacity of the foundry.
Although the Company has received a commitment from TI which indicates that TI
will meet its minimum purchase obligation during the second half of 1998, during
the first half of 1998 TI's orders were below such minimum purchase commitment
due to market conditions and issues encountered by TI in the transition of its
products to .18 micron technology. There can be no assurance that TI will meet
its purchase obligations in the second half of 1998 or in the future. There can
be no assurance that TI will place orders representing at least 40% of the
capacity of this foundry during this period or in the future. A failure by TI to
comply with its minimum purchase obligations or the cancellation of a
significant wafer fabrication order by TI or any other customer could have a
material adverse effect on ASI's and the Company's business, financial condition
and results of operations. See "Risk Factors -- Risks Associated with New Wafer
Fabrication Business" and " -- Intellectual Property."

The new foundry's capability is targeted to meet the needs of customers for
DSPs, ASICs and other logic devices. As technological capability and the needs
for CMOS designs in this area change, the Company anticipates the need to add
embedded memory and special analog functionality to its core CMOS technology.
The Company plans to continue to focus its semiconductor technology development
efforts to serve the needs of the high performance digital logic market.

With the addition of the wafer fabrication capability, the Company is able
to offer fully integrated turnkey semiconductor manufacturing services to its
customers. This complete turnkey solution will enable the Company to work with
its customers' IC designers to optimize the integration of IC design with wafer
fabrication, package design, and packaging and test processes. The Company
believes this integration will enable customers to improve the cost and
performance of their ICs and achieve faster time to market in terms of both new
product introductions and production lead times.

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CUSTOMERS

The Company currently has more than 150 customers, including many of the
largest semiconductor companies in the world. Set forth below is a list of the
Company's top 50 customers in 1997:

Actel Corporation                Integrated Circuit Systems, Inc.    Plessey Semiconductors
Altera Corporation               Integrated Device Technology, Inc.  Philips Electronics N.V.
Adaptec, Inc.                    Intel Corporation                   Robert Bosch GmbH
Advanced Micro Devices, Inc.     Lattice Semiconductor               Rockwell Corp.
Alcatel Mietec                     Corporation                       S3 Incorporated
American Micro Systems, Inc.     Level One Communications, Inc.      SGS-THOMSON
Analog Devices, Inc.             LSI Logic Corporation               Microelectronics N.V.
Atmel Corporation                Lucent Technologies Inc.            Siemens AG
Cirrus Logic                     Macronix International Co., Ltd.    SMC Corporation
Cypress Semiconductor Corp.      Matra Harris Semiconductors         Silicon Storage
Dallas Semiconductor             Maxim Integrated Circuits           Technology, Inc.
Delco Electronics Corporation    Microchip Technology Inc.           Symbios Logic
Digital Equipment Corp.          Microlinear                         TEMIC Semiconductors
Harris Corporation               Motorola, Inc.                      Texas Instruments
Hewlett-Packard Company          National Semiconductor                Incorporated
International Business Machines    Corporation                       VLSI Technology, Inc.
Corporation                    NeoMagic Corporation                VTC Inc.
IC Works Inc.                    Northern Telecom                    Waferscale Integration, Inc.
Xilinx, Inc.

The Company's five largest customers collectively accounted for approximately
34.1%, 39.2%, 40.1% and 34.7% of the Company's total revenues in 1995, 1996,
1997 and the six months ended June 30, 1998, respectively. The Company
anticipates that this customer concentration will continue at least for the
foreseeable future. See "Risk Factors -- Customer Concentration; Absence of
Backlog."

MARKETING AND SALES

The Company sells to and supports its customers through an international
network of offices located in close proximity to its largest customers and
concentration of customers, including offices in the United States (Austin,
Texas; Boise, Idaho; Chandler, Arizona; Dallas, Texas; Santa Clara, California
and West Chester, Pennsylvania), France, Singapore, Taiwan, and the Philippines.
A substantial majority of the Company's sales have historically been derived
from U.S.-based customers. See Note 18 of Notes to Combined Financial
Statements. The Company assigns each of its customers a sales and customer
support team consisting of an account manager, a technical program manager, and
one or more customer support representatives. The largest multinational
customers are typically supported from multiple offices. The Company's worldwide
force of account managers, customer service representatives and technical
product managers exceeds 200 personnel. In addition, an extended staff of
product management, process and reliability engineering, marketing and
advertising, information systems, and factory personnel supports the direct
account teams. Together, these direct and extended teams deliver an array of
services to the Company's customers including providing information and expert
advice on packaging solutions and trends, managing the start-up of specific
packaging and test programs, providing a continuous flow of information to the
customers regarding products and programs in process, and researching and
helping to resolve technical and logistical issues.

FACILITIES AND MANUFACTURING

Facilities

The Company provides packaging and test services through its factories in
the Philippines as well as its test facility in the U.S. The Company's Chandler,
Arizona site is currently equipped for limited scale advanced packaging
processes. In addition, the Company provides packaging and test services through
ASI's

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four factories in Korea, which provide such services to the Company pursuant to
a Supply Agreement. In 1996, 1997 and the six months ended June 30, 1998, ASI
provided packaging and test services which accounted for approximately 72%, 68%
and 67%, respectively, of the Company's revenues. In addition to providing
world-class manufacturing services, these factories provide purchasing,
engineering, and customer service support. The Company recently began offering
wafer fabrication services through ASI's new state-of-the-art .25 micron wafer
foundry in Korea pursuant to a Supply Agreement. The size, location, and
manufacturing services provided by each of the Company's and ASI's primary
facilities is set forth in the table below. See "Risk Factors -- Dependence on
Relationship With ASI; Potential Conflicts of Interest," "--Expansion of
Manufacturing Capacity; Profitability Affected by Capacity Utilization Rates,"
"-- Risks Associated with New Wafer Fabrication Business" and "-- Inability to
Obtain Packaging and Test Equipment in a Timely Fashion."

APPROXIMATE
PLANT SIZE
FACILITY                      LOCATION              (SQUARE FEET)           MANUFACTURING SERVICES
--------                      --------              -------------           ----------------------

Company Facilities
P1                     Muntilupa, Philippines                579,000      Packaging and test services; packaging
and process development
P2                     Muntilupa, Philippines                115,000      Packaging services
P3                     Province of Laguna, Philippines       249,000      Packaging and test services
AATS                   Santa Clara, California                 3,000      Final testing services; test program
development; central shipping and
logistics
A1 (1999)              Chandler, Arizona                     106,000      Packaging services for laminate
products; package and process
development

ASI Facilities
K1                     Seoul, Korea                          646,000      Packaging services, package and
process development
K2                     Buchon, Korea                         264,000      Packaging services
K3                     Bupyung, Korea                        404,000      Packaging and test services
K4                     Kwangju, Korea                        597,000      Packaging services

Wafer Foundry          Buchon, Korea                         480,000      Wafer fabrication services

The Company's operational headquarters is located in Chandler, Arizona
while its administrative headquarters is located in West Chester, Pennsylvania.
In addition to an executive staff, the Chandler, Arizona campus houses sales and
customer service for the southwest region, product management, a technical
design center, planning, marketing and research and development. The West
Chester location houses finance and accounting, legal, personnel administration,
information systems, and serves as a satellite sales office for the Company's
eastern sales region.

Raw Materials and Equipment

The Company's packaging operations depend upon obtaining adequate supplies
of raw materials on a timely basis. The principal raw materials used in the
Company's packaging process are leadframes or laminate substrates, along with
gold wire and molding compound. The Company purchases raw materials based on the
stated demand requirements of its customers and its customers are generally
responsible for any unused materials that result from an overstatement of
demand. The Company works closely with its primary raw material suppliers to
insure the availability and timeliness of raw material supplies. In addition,
the Company negotiates worldwide pricing agreements with its major suppliers to
take advantage of the scale of its operations. The Company is not dependent on
any one supplier for a substantial portion of its raw material requirements.

The Company's packaging operations and expansion plans also depend on
obtaining adequate supplies of manufacturing equipment on a timely basis. To
that end, the Company works closely with its major equipment suppliers to insure
that equipment deliveries are on time and the equipment meets the Company's
stringent performance specifications. In addition, an affiliate of ASI
manufactures semiconductor packaging equipment

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exclusively for the Company and ASI at locations in close proximity to the
Company's and ASI's packaging facilities in the Philippines and Korea,
respectively. See "Risk Factors -- Dependence on Raw Materials Suppliers and
Subcontractors."

Total Quality Management

The Company believes that total quality management is a vital component of
its manufacturing strategy. To that end, the Company has established a
comprehensive Quality Operating System designed to promote continuous
improvement and maximize manufacturing yields at high volume production while
maintaining the highest quality standards. Each of the Company's and ASI's
factories is ISO9002 and QS-9000 certified. ISO9002 is a worldwide manufacturing
quality certification program administered by an independent standards
organization. QS9000 is similarly an independently administered manufacturing
quality certification used by United States automotive manufacturers. The
Company believes that many of its customers prefer to purchase from suppliers
who are ISO9002 and QS9000 certified.

COMPETITION

The independent semiconductor packaging and test industry is very
competitive, being comprised of approximately 50 companies, with about 15 of
those companies having sales of $100 million per year or more. The Company faces
substantial competition from established packaging companies primarily located
in Asia, such as Advanced Semiconductor Engineering, Inc. (Taiwan), ASE Test
Limited (Taiwan and Malaysia), ASAT Ltd. (Hong Kong), Hana Microelectronics
Public Co. Ltd. (Hong Kong and Thailand), Astra International (Indonesia),
Carsem Bhd. (Malaysia), ChipPAC Incorporated (Korea), Siliconware Precision
Industries Co., Ltd. (Taiwan), and Shinko Electric Industries Co., Ltd. (Japan).
Each of these companies has significant manufacturing capacity, financial
resources, research and development operations, marketing and other
capabilities, and have been operating for some time. Such companies have also
established relationships with many large semiconductor companies which are
current or potential customers of the Company. The principal elements of
competition in the independent semiconductor packaging market include time to
market, breadth of package offering, technical competence, design services,
quality, production yields, customer service, and price. The Company believes it
generally competes favorably with respect to these factors. On a larger scale,
the Company also competes with the internal manufacturing capabilities of many
of its largest customers.

The independent wafer fabrication business is also highly competitive. The
Company expects its wafer fabrication services to compete primarily with
independent wafer foundries such as Chartered Semiconductor Manufacturing, Ltd.,
Taiwan Semiconductor Manufacturing Company, Ltd. and United Microelectronics
Corporation, as well as with device manufacturers such as LG Semicon Co., Ltd.,
Hitachi, Ltd., Toshiba Corp. and Winbond Electronics Corporation, which provide
foundry services for other semiconductor companies. Each of these companies has
significant manufacturing capacity, financial resources, research and
development operations, marketing and other capabilities and have been operating
for some time. Many of these companies have also established relationships with
many large semiconductor companies which are current or potential customers of
the Company. The principal elements of competition in the wafer foundry market
include technology, delivery cycle times, price, product performance, quality,
production yield, responsiveness and flexibility, reliability and the ability to
design and incorporate product improvements. See "Risk Factors -- Competition."

RESEARCH AND DEVELOPMENT

The Company's research and development efforts are focused on developing
new package designs and process capabilities, and on improving the efficiency
and capabilities of its existing production processes and materials. The Company
believes that technology development is one of the key success factors in the
packaging market and believes that it has a distinct advantage in this area. In
addition to its internal development work, and its co-development work with ASI,
the Company also works closely with its packaging equipment and raw material
suppliers in developing advanced processing capabilities and materials for use
in the Company's production process. Currently, the Company is focusing on
development programs that extend
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the capability and applicability of the BGA packaging format. These include high
performance BGAs for microprocessors and other high-end devices, and a chip size
package for memory. In addition, the Company is aggressively developing a
flip-chip die attach and connect process for its laminate packages that has the
potential to reduce packaging size and cost and improve package performance
significantly. The flip-chip packaging process involves attaching the die I/O
terminals directly to the lead circuits on the substrate without the use of gold
wires. In addition to providing a smaller package size, this process is expected
to result in significant improvements in packaging yields by eliminating the
delicate wire bonds from the package.

As of June 30, 1998, the Company employed approximately 95 persons in
research and development activities. In addition, other management and
operational personnel are involved in research and development activities. In
1995, 1996, 1997 and the six months ended June 30, 1998, the Company's research
and development expenses were approximately $8.7 million, $10.9 million, $8.5
million and $4.0 million, respectively. The Company expects to continue to
invest significant resources in research and development.

INTELLECTUAL PROPERTY

The Company currently holds 24 U.S. patents, five of which are jointly held
with ASI, related to various IC packaging technologies, in addition to other
pending patents. These patents will expire at various dates from 2012 through
2016. With respect to development work undertaken jointly with ASI, the Company
and ASI share intellectual property rights under the terms of the Supply
Agreements between the Company and ASI. The Supply Agreements also provide for
the cross-licensing of intellectual property rights between the Company and ASI.
In addition, the Company enters into agreements with other developers of
packaging technology to license or otherwise obtain certain process or packaging
technologies.

The Company expects to continue to file patent applications when
appropriate to protect its proprietary technologies; however, the Company
believes that its continued success depends primarily on factors such as the
technological skills and innovation of its personnel rather than on its patents.
The process of seeking patent protection can be expensive and time consuming.
There can be no assurance that patents will be issued from pending or future
applications or that, if patents are issued, they will not be challenged,
invalidated or circumvented, or that rights granted thereunder will provide
meaningful protection or other commercial advantage to the Company. Moreover,
there can be no assurance that any patent rights will be upheld in the future or
that the Company will be able to preserve any of its other intellectual property
rights.

Although the Company is not currently a party to any material litigation,
the semiconductor industry is characterized by frequent claims regarding patent
and other intellectual property rights. As is typical in the semiconductor
industry, the Company may receive communications from third parties asserting
patents on certain of the Company's technologies. In the event any third party
were to make a valid claim against the Company or ASI, the Company or ASI could
be required to discontinue the use of certain processes or cease the
manufacture, use, import and sale of infringing products to pay substantial
damages and to develop non-infringing technologies or to acquire licenses to the
alleged infringed technology. The Company's business, financial condition and
results of operations could be materially and adversely affected by such
developments. Litigation, which could result in substantial cost to and
diversion of resources of the Company, may also be necessary to enforce patents
or other intellectual property rights of the Company or to defend the Company
against claimed infringement of the rights of others. The failure to obtain
necessary licenses or the occurrence of litigation relating to patent
infringement or other intellectual property matters could have a material
adverse effect on the Company's business, financial condition and results of
operations. In addition, ASI has obtained intellectual property for wafer
manufacturing primarily from TI. The licenses granted to ASI by TI under the TI
Technology Agreements are very limited. Although TI has granted to ASI a license
under TI's trade secret rights to use TI's technology in connection with ASI's
provision of wafer fabrication services, TI has not granted ASI a license under
its patents, copyrights and mask works to manufacture semiconductors for third
parties. Although TI has agreed that TI will not assert a claim for patent,
copyright or mask work right infringement against ASI or the Company in
connection with ASI's manufacture of semiconductor products for third parties,
TI has reserved the right to bring such infringement claims against ASI's or the
Company's customers with respect to semiconductor products purchased from ASI or
the Company. As a result, ASI's and the Company's customers could be subject to
patent litigation by TI and others, and ASI and the
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Company could in turn be subject to litigation by such customers and others, in
connection with the sale of wafers produced by ASI. Any such litigation could
materially and adversely affect ASI's ability to continue to manufacture wafers
and ASI's and the Company's business, financial condition and results of
operations.

ENVIRONMENTAL MATTERS

The semiconductor packaging process involves a significant amount of
chemicals and gases which are subject to extensive governmental regulations. For
example, liquid waste is produced at the stage at which silicon wafers are diced
into chips with the aid of diamond saws and cooled with running water. In
addition, excess materials on leads and moldings are removed from packaged
semiconductors in the trim and form process. The Company has installed equipment
to collect certain solvents used in connection with its manufacturing process
and has contracted with independent waste disposal companies to remove such
hazardous material.

Federal, state and local regulations in the United States, as well as
environmental regulations in Korea and the Philippines, impose various controls
on the storage, handling, discharge and disposal of chemicals used in the
Company's and ASI's manufacturing processes and on the facilities occupied by
the Company and ASI. The Company believes that its activities, as well as those
of ASI, conform to present environmental and land use regulations applicable to
their respective operations and current facilities. Increasing public attention
has, however, been focused on the environmental impact of semiconductor
manufacturing operations and the risk to neighbors of chemical releases from
such operations. There can be no assurance that applicable land use and
environmental regulations will not in the future impose the need for additional
capital equipment or other process requirements upon the Company or ASI or
restrict the Company's or ASI's ability to expand their respective operations.
The adoption of new ordinances or similar measures or any failure by the Company
or ASI to comply with applicable environment and land use regulations or to
restrict the discharge of hazardous substances could subject the Company or ASI
to future liability or cause their respective manufacturing operations to be
curtailed or suspended.

EMPLOYEES

As of June 30, 1998, the Company had approximately 9,880 full-time
employees, 8,105 of whom were engaged in manufacturing, 1,260 in manufacturing
support, 95 in research and development, 210 in marketing and sales, and 210 in
finance, business management, and administration. The Company's employees are
not represented by any collective bargaining agreement, and the Company has
never experienced a work stoppage. The Company believes that its relations with
its employees are good. See "Risk Factors -- Dependence on Key Personnel and
Availability of Skilled Workforce."

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company and their ages as of
June 30, 1998 are as follows:

NAME                     AGE                        POSITION
----                     ---                        --------

James J. Kim..............................   62   Chief Executive Officer and Chairman
John N. Boruch............................   56   President and Director
Frank J. Marcucci.........................   63   Chief Financial Officer
Eric R. Larson............................   42   Vice President
Michael D. O'Brien........................   66   Vice President
Winston J. Churchill......................   57   Director
Robert E. Denham..........................   52   Director
Thomas D. George(1)(2)....................   58   Director
Gregory K. Hinckley(1)(2).................   51   Director

- ---------------

(1) Member of Compensation Committee.

(2) Member of Audit Committee.

James J. Kim. James Kim has served as the Company's Chief Executive Officer
since September 1997. Mr. Kim founded AEI in 1968 and has served as its Chairman
since 1970. He has also served as the Chairman of the Anam group of companies
and a director of ASI since 1992. Mr. Kim is a director of CFM Technologies,
Inc. Mr. Kim earned B.S. and M.A. degrees in Economics from the University of
Pennsylvania. Mr. Kim is Chairman of The Electronics Boutique, Inc., an
electronics retail chain, and Forte Systems, Inc., an information technology,
consulting and outsourcing company.

John N. Boruch. John Boruch has served as President and a director of the
Company since September 1997. Mr. Boruch has served as President of AEI since
February 1992. From 1991 to 1992 he served as AEI Corporate Vice President in
charge of Sales. Mr. Boruch earned a B.A. in Economics from Cornell University.
Mr. Boruch joined the Company in 1984.

Frank J. Marcucci. Frank Marcucci has served as the Chief Financial Officer
of the Company since September 1997. Mr. Marcucci has served as the Chief
Financial Officer of AEI since joining AEI in 1980. Mr. Marcucci earned a B.S.
in Business Administration from Duquesne University and an MBA from the
University of Pittsburgh. Mr. Marcucci is a Certified Public Accountant.

Eric R. Larson. Eric Larson has served as Vice President of the Wafer
Fabrication business of the Company since September 1997. Mr. Larson has served
as President of Amkor/Anam Semiconductor, a division of AEI, since December
1996. From 1979 to 1996 he worked for the Hewlett-Packard Company ("HP") in
various management capacities, most recently as Worldwide Marketing Manager for
disk products. In addition, Mr. Larson was the worldwide Manager of Sales and
Marketing of the IC Business Division of HP from July 1985 to May 1993. Mr.
Larson earned a B.A. in Political Science from Colorado State University and an
MBA from the University of Denver.

Michael D. O'Brien. Michael O'Brien has served as the Vice President of
Packaging and Testing Operations of the Company since September 1997. Mr.
O'Brien has served as Corporate Vice President of AEI since 1990. Mr. O'Brien
earned a B.S. from Texas A&M University. Mr. O'Brien joined the Company in 1988.

Winston J. Churchill. Mr. Churchill has been a director of the Company
since July 1998. Mr. Churchill is a managing general partner of SCP Private
Equity Partners, L.P., a private equity fund sponsored by Safeguard Scientifics,
Inc. He is also chairman of Churchill Investment Partners, Inc. and CIP Capital
Management, Inc. From 1984 to 1989, Mr. Churchill was a general and, later, a
managing partner of a private investment firm. From 1967 to 1983 he practiced
law at the Philadelphia firm of Saul, Ewing, Remick & Saul where he served as
Chairman of the Banking and Financial Institutions Department, Chairman of the
Finance

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Committee and was a member of the Executive Committee. Mr. Churchill is chairman
of the board of Central Sprinkler Corporation and IBAH, Inc. He is also a member
of the boards of Geotek Communications, Inc. and Griffin Land & Nurseries, Inc.
From 1989 to 1993 he served as Chairman of the Finance Committee of the
Pennsylvania Public School Employes' Retirement System. Mr. Churchill is also a
member of the Executive Committee of the Council of Institutional Investors.

Robert E. Denham. Mr. Denham has been a director of the Company since July
1998. He is a partner in the law firm of Munger, Tolles & Olson, having rejoined
the firm in 1998 after serving as the Chairman and Chief Executive Officer of
Salomon Inc. from June 1992 to December 1997. Mr. Denham joined Salomon Inc. in
August 1991 as General Counsel of Salomon Inc. and its subsidiary, Salomon
Brothers. Prior to joining Salomon Inc., Mr. Denham worked for twenty years at
the law firm of Munger, Tolles & Olson. Mr. Denham served as a U.S.
Representative to the APEC Business Advisory Council, appointed to that position
by President Clinton. He is a member of the Council on Foreign Relations and the
OECD Business Sector Advisory Group on Corporate Governancy. He is also one of
the four public members of the Independence Standards Board (established by the
Securities and Exchange Commission to develop principles for determining
independence of accountants).

Thomas D. George. Mr. George has been a director of the Company since
November 1997. Mr. George was Executive Vice President, and President and
General Manager, Semiconductor Products Sector ("SPS") of Motorola from April
1993 to May 1997. Prior to that, he held several positions with Motorola,
including Executive Vice President and Assistant General Manager, SPS from
November 1992 to April 1993 and Senior Vice President and Assistant General
Manager, SPS from July 1986 to November 1992. Mr. George is currently retired.

Gregory K. Hinckley. Mr. Hinckley has been a director of the Company since
November 1997. Mr. Hinckley serves as Executive Vice President, Chief Operating
Officer and Chief Financial Officer of Mentor Graphics Corporation since January
1997. From November 1995 until December 1996 he held the position of Senior Vice
President with VLSI, a manufacturer of complex ASICs. From August 1992 until
December 1996, Mr. Hinckley held the position of Vice President, Finance and
Chief Financial Officer with VLSI. From December 1991 until August 1992, he was
an independent consultant. Mr. Hinckley is a director of OEC Medical Systems,
Inc., a manufacturer of medical imaging equipment.

DIRECTOR COMPENSATION

Directors who are also employees or officers of the Company do not receive
compensation for their services as directors. Non-employee directors are
eligible to receive an annual retainer of $15,000 plus per meeting fees of
$1,000 per board meeting and $1,000 per committee meeting attended. Directors
are reimbursed for travel and related expenses incurred by them in attending
board and committee meetings.

1998 Director Option Plan. The Company's 1998 Director Option Plan (the
"Director Plan") was adopted by the Board of Directors in January 1998 and was
approved by the Company's stockholders in April 1998. The Director Plan became
effective immediately prior to the Initial Public Offering. A total of 300,000
shares of Common Stock have been reserved for issuance under the Director Plan.
The option grants under the Director Plan are automatic and non-discretionary.
The Director Plan provides for an initial grant of options to purchase 15,000
shares of Common Stock to each new nonemployee director of the Company (an
"Outside Director") upon the later of the effective date of the Director Plan or
the date which such individual first becomes an Outside Director. In addition,
each Outside Director will automatically be granted subsequent options to
purchase 5,000 shares of Common Stock on each date on which such Outside
Director is re-elected by the stockholders of the Company, provided that as of
such date such Outside Director has served on the Board of Directors for at
least six months. The exercise price of the options is 100% of the fair market
value of the Common Stock on the grant date, except that with respect to initial
grants to directors on the effective date of the Director Plan the exercise
price was equal 94% of the Initial Public Offering price per share of Common
Stock in the Initial Public Offering. The term of each option is ten years. Each
option granted to an Outside Director vests as to 33 1/3% of the optioned stock
one year after the date of grant, and as to an additional 33 1/3% of the
optioned stock on each anniversary of the date of grant, provided that the

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optionee continues to serve as an Outside Director on such date so that 100% of
the optioned stock may be exercisable three years after the date of grant. In
the event of the sale of all or substantially all the Company's assets or the
merger of the company with or into another corporation, all outstanding options
under the Director Plan may either be assumed or an equivalent option may be
substituted by the surviving entity. Following such assumption or substitution,
if the director is terminated other than upon a voluntary resignation, such
assumed or substituted options will vest and become exercisable in full. If no
assumption or substitution occurs, each such option will vest and become
exercisable in full. The Director Plan will terminate in January 2008 unless
sooner terminated by the Board of Directors.

BOARD COMMITTEES

The Board of Directors has a Compensation Committee and an Audit Committee.
The Compensation Committee is comprised of Messrs. George and Hinckley. The
functions of the Compensation Committee are to review and approve annual
salaries, bonuses, and grants of stock options pursuant to the Company's 1998
Stock Plan and to review and approve the terms and conditions of all employee
benefit plans or changes thereto. The Audit Committee is comprised of Messrs.
George and Hinckley. The functions of the Audit Committee are to recommend
annually to the Board of Directors the appointment of the independent auditors
of the Company, discuss and review in advance the scope and the fees of the
annual audit and review the results thereof with the independent auditors,
review and approve non-audit services of the independent auditors, review
compliance with existing major accounting and financial reporting policies of
the Company, review the adequacy of the financial organization of the Company,
and review management's procedures and policies relating to the adequacy of the
Company's internal accounting controls and compliance with applicable laws
relating to accounting practices.

EXECUTIVE COMPENSATION

Summary Compensation. The following table sets forth compensation earned
during the fiscal year ended December 31, 1997, by the Company's Chief Executive
Officer and the four other most highly compensated executive officers whose
total salary and bonus during such year exceeded $100,000 (collectively, the
"Named Executive Officers").

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION(1)
----------------------     ALL OTHER
NAME AND PRINCIPAL POSITIONS                   SALARY        BONUS      COMPENSATION
----------------------------                  ---------    ---------    ------------

James J. Kim, Chief Executive Officer and
Chairman(2)..........................................    $500,000     $500,000       $  6,000
John N. Boruch, President(3)...........................     415,000      375,000          6,000
Frank J. Marcucci, Chief Financial Officer(4)..........     254,000      100,000        245,000
Eric R. Larson, Vice President.........................     220,000           --             --
Michael D. O'Brien, Vice President.....................     249,000      100,000             --

- ---------------

(1)  At the time of the Initial Public Offering, Messrs. Boruch, Marcucci,
Larson and O'Brien received option grants of 400,000 shares, 110,000
shares, 90,000 shares and 90,000 shares, respectively, of Common Stock
under the Company's 1998 Stock Plan, in each case with an exercise price
per share equal to the Initial Public Offering price per share.

(2)  All other compensation for Mr. Kim represents the amount of insurance
premium paid by the Company on Mr. Kim's behalf for a life insurance
policy. Effective January 1, 1998, Mr. Kim is compensated at an annual
salary of $750,000 and he may earn an annual bonus of up to $500,000 if the
Company achieves its annual operating plan, as approved by the Company's
Board of Directors.

(3)  All other compensation for Mr. Boruch represents the amount of insurance
premium paid by the Company on Mr. Boruch's behalf for a life insurance
policy.

(4)  All other compensation for Mr. Marcucci represents the amount of insurance
premium paid by the Company on Mr. Marcucci's behalf for a life insurance
policy together with a bonus paid to

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Mr. Marcucci to cover the income taxes owed by Mr. Marcucci as a result of
the payment of such insurance premium.

STOCK PLANS

1998 Stock Plan. The Company's 1998 Stock Plan (the "1998 Plan") provides
for the grant to employees of incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986 (the "Code"), and for the grant
to employees, directors and consultants of nonstatutory stock options and stock
purchase rights. The 1998 Plan was adopted by the Board of Directors in January
1998 and was approved by the Company's stockholders in April 1998. Unless
terminated sooner, the 1998 Plan will terminate automatically in January 2008.
The maximum aggregate number of shares which may be optioned and sold under the
1998 Plan is 5,000,000, plus an annual increase to be added on each anniversary
date of the adoption of the 1998 Plan equal to the lesser of (i) the number of
shares of Common Stock needed to restore the maximum aggregate number of shares
of Common Stock which may be optioned and sold under the 1998 to 5,000,000, or
(ii) a lesser amount determined by the Board of Directors.

The 1998 Plan may be administered by the Board of Directors or a committee
appointed by the Board of Directors (the "Committee"), which Committee shall, in
the case of options intended to qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code, consist of two or more
"outside directors" within the meaning of Section 162(m) of the Code. The Board
of Directors or the Committee, as applicable, has the power to determine the
terms of options granted, including the exercise price and the fair market
value, to reduce the exercise price of any option to the then current fair
market price if the fair market value of the Common Stock covered by such option
shall have declined since the date the option was granted, the number of shares
subject to the option or stock purchase right, and the exercisability thereof
and the form of consideration payable upon such exercise. In addition, the Board
of Directors has the authority to amend, suspend or terminate the 1998 Plan,
provided that no such action may affect any share of Common Stock previously
issued and sold or any option previously granted under the 1998 Plan.

Unless determined otherwise by the administrators, options and stock
purchase rights granted under the 1998 Plan are not transferable by the
optionee, and each option and stock purchase right is generally exercisable
during the lifetime of the optionee only by such optionee. Options granted under
the 1998 Plan must generally be exercised within 30 days following termination
of an optionee's status as an employee, director or consultant of the Company,
within twelve months after an optionee's termination by disability, and within
twelve months after an optionee's termination by death, but in no event later
than the expiration of the option. In the case of stock purchase rights, unless
the administrator determines otherwise, a restricted stock purchase agreement
shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's employment with the Company for any
reason (including death or disability). The purchase price for shares
repurchased pursuant to a restricted stock purchase agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at a rate determined by the administrator. The exercise price of all incentive
stock options granted under the 1998 Plan must be at least equal to the fair
market value of the shares on the date of grant. The exercise price of
nonstatutory stock options granted under the 1998 Plan is determined by the
Committee, but with respect to nonstatutory stock options intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the exercise price must be at least equal to the fair market value of the
Common Stock on the date of grant. With respect to any employee who owns stock
possessing more than ten percent of the voting power of all classes of the
Company's, or any parent or subsidiary of the Company's outstanding capital
stock, the exercise price of any incentive stock option granted to such person
must equal at least 110% of the fair market value of the Common Stock on the
date of grant and the term of such incentive stock option must not exceed five
years. The term of all other options granted under the 1998 Plan may not exceed
ten years.

The 1998 Plan provides that in the event of a merger of the Company with or
into another corporation, or a sale of substantially all of the Company's
assets, each outstanding option and stock purchase right will be assumed or
substituted for by the successor corporation. In the event the successor
corporation refuses to

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assume or substitute for the option or stock purchase right, the optionee shall
have the right to exercise all of the optioned stock, including shares as to
which it would not otherwise be exercisable.

1998 Stock Option Plan for French Employees. The 1998 Stock Option Plan for
French Employees (the "French Plan") was approved by the Board of Directors in
April 1998. Unless terminated sooner, the French Plan will continue in existence
for 5 years. The French Plan provides for the granting of options to employees
of Amkor/Anam EuroServices S.A.R.L. and Amkor Wafer Fabrication Services SARL,
the Company's French subsidiaries (the "French Subsidiaries"). A total of
250,000 shares of Common Stock have been reserved for issuance under the French
Plan plus an annual increase to be added on each anniversary date of the
adoption of the French Plan equal to the lesser of (i) the number of shares of
Common Stock needed to restore the maximum aggregate number of shares of Common
Stock which may be optioned and sold under the French Plan to 250,000, or (ii) a
lesser amount determined by the Board of Directors. Options granted under the
French Plan are not transferable by the optionee other than by will or by the
laws of descent and distribution. The exercise price for each option granted
under the French Plan shall be 100% of the fair market value of the shares of
Common Stock on the date the option is granted and the maximum term of the
option must not exceed ten years.

Stock options granted under the French Plan vest over a five year period
with 50% of the shares subject to cash options vesting on the second anniversary
of the vesting commencement date and 1/24 of the remaining shares subject to
each option vesting each month thereafter. Shares subject to the options granted
under the French Plan may not be transferred, assigned or hypothecated in any
manner other than by will or the laws of descent or distribution before the date
which is five years after the date of grant.

The French Plan may be administered by the Board of Directors or a
committee appointed by the Board of Directors (the "Committee"). The Board of
Directors or the Committee, as applicable, has the power to determine the terms
of options granted, including the exercise price and the fair market value the
number of shares subject to the option and the exercisability thereof and the
form of consideration payable upon such exercise. In addition, the Board of
Directors has the authority to amend, suspend or terminate the French Plan,
provided that no such action may affect any share of Common Stock previously
issued and sold or any option previously granted under the French Plan.

Unless determined otherwise by the administrators, options granted under
the French Plan are not transferable by the optionee, and each option is
generally exercisable during the lifetime of the optionee only by such optionee.
Options granted under the French Plan must generally be exercised within 30 days
following termination of an optionee's status as an employee of either of the
French Subsidiaries, within six months after an optionee's termination by
disability, and within six months after an optionee's termination by death, but
in no event later than the expiration of the option. The term of all options
granted under the French Plan may not exceed ten years.

The French Plan provides that in the event of a merger of the Company with
or into another corporation, or a sale of substantially all of the Company's
assets, each outstanding option will be assumed or substituted for by the
successor corporation. In the event the successor corporation refuses to assume
or substitute for the option, the optionee shall have the right to exercise all
of the optioned stock, including shares as to which it would not otherwise be
exercisable.

1998 Employee Stock Purchase Plan. The Company's 1998 Employee Stock
Purchase Plan (the "Purchase Plan") was adopted by the Board of Directors in
January 1998 and was approved by the stockholders in April 1998. The Purchase
Plan will be implemented on October 1, 1998. A total of 1,000,000 shares of
Common Stock have been made available for sale under the Purchase Plan and an
annual increase is to be added on each anniversary date of the adoption of the
Purchase Plan equal to the lesser of (i) the number of shares needed to restore
the maximum aggregate number of shares available for sale under the Purchase
Plan to 1,000,000, or (ii) a lesser amount determined by the Board of Directors.
The Purchase Plan, which is intended to qualify under Section 423 of the Code is
administered by the Board of Directors or by a committee appointed by the Board.
Employees (including officers and employee directors of the Company but
excluding 5% or greater stockholders) are eligible to participate if they are
customarily employed for at least 20 hours per week and for more than five
months in any calendar year. The Purchase
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Plan permits eligible employees to purchase Common Stock through payroll
deductions, which may not exceed 15% of the compensation an employee receives on
each pay day. The Purchase Plan will be implemented by consecutive six-month
offering periods except that the first offering period will begin on October 1,
1998 and will last for seven months. Subsequent offering periods will begin on
May 1 and November 1 of each year. Each participant will be granted an option on
the first day of an offering period, and shares of Common Stock will be
automatically purchased on the last date of each purchase period within the
offering period. If the fair market value of the Common Stock on any purchase
date (other than the final purchase date of the offering period) is lower than
such fair market value on the start date of that offering period, then all
participants in that offering period will be automatically withdrawn from such
offering period and re-enrolled in the immediately following offering period.
The purchase price of the Common Stock under the Purchase Plan will be equal to
85% of the lesser of the fair market value per share of Common Stock on the
start date of the offering period or on the purchase date. Employees may end
their participation in an offering period at any time, and participation ends
automatically on termination of employment with the Company. In the event of a
proposed dissolution or liquidation of the Company, the offering periods then in
progress will be shortened by setting a new exercise date that is before the
dissolution or liquidation, and will terminate immediately prior to the
consummation of the proposed action, unless otherwise provided by the Board. In
the event of a proposed sale of all or substantially all of the Company's assets
or the merger of the Company with or into another corporation, each outstanding
option will be assumed or substituted for by the successor corporation. In the
event the successor corporation refuses to assume or substitute for the options,
the offering periods then in progress will be shortened by setting a new
exercise date that is before the sale or merger and the offering periods then in
progress will end on the new exercise date. Each participant will be notified at
least ten business days prior to the new exercise date, and unless such
participant ends his or her participation, the option will be exercised
automatically on the new exercise date. The Purchase Plan will terminate in
January 2008, unless sooner terminated by the Board of Directors.

401(k) PLAN

The Company participates in a tax-qualified employee savings and retirement
plan (the "401(k) Plan") which covers certain of the Company's employees who are
at least 21 years of age. Pursuant to the 401(k) Plan, employees may elect to
reduce their current eligible compensation by up to 13% of eligible compensation
or the statutorily prescribed annual limit, whichever is lower, and have the
amount of such reduction contributed to the 401(k) Plan. After an eligible
employee completes one year of service and has attained age 21, he or she will
become eligible for the Company matching contributions effective as of the
quarterly entry date after meeting these service and age requirements. The
matching contribution amount is a discretionary amount as determined from time
to time by the Company. The 401(k) Plan is intended to qualify under Section 401
of the Internal Revenue Code of 1986, as amended, so that contributions by
employees or by the Company to the 401(k) Plan, and income earned on plan
contributions, are not taxable to employees until withdrawn from the 401(k)
Plan, and so that contributions by the Company, if any, will be deductible by
the Company when made. The trustee under the 401(k) Plan, at the direction of
each participant, invests the assets of the 401(k) Plan in any of a number of
designated investment options.

PHILIPPINE PENSION PLANS

The Company adopted a retirement plan for its eligible Philippine employees
and those eligible employees of designated affiliated companies and subsidiaries
of the Company, the Amkor/Anam Pilipinas, Incorporated Employees' Retirement
Benefit Plan (the "Phillipine Plan"), originally effective January 1, 1988, and
most recently amended on January 1, 1997. Eligible employees are employees with
regular and permanent status that have been employed continuously for one (1)
year by a participating company. Currently, the companies participating in the
Phillipine Plan are AMI, AAAP, and Anam Amkor Precision Machine Company
(Phils.), Incorporated. At normal retirement age (age 60), death, or upon total
and permanent disability, a participant will receive a lump sum benefit payment
based on a percentage of his or her final base monthly salary, as determined by
his or her years of credited service. A participant who retires at age 50 with
at least ten (10) years of service will receive a reduced payment based on the
same formula.

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Company contributions to the Phillipine Plan are held in trust. The Phillipine
Plan is presently underfunded by $3.8 million. See Note 9 of Notes to
Consolidated Financial Statements.

LIMITATIONS ON LIABILITY AND INDEMNIFICATION MATTERS

The Company has adopted provisions in its Certificate of Incorporation that
eliminate to the fullest extent permissible under Delaware law the liability of
its directors to the Company for monetary damages. Such limitation of liability
does not affect the availability of equitable remedies such as injunctive relief
or rescission. The Bylaws provide that the Company shall indemnify its directors
and officers, and may indemnify its other employees and agents, to the fullest
extent permitted by Delaware law, including in circumstances in which
indemnification is otherwise discretionary under Delaware law. The Company has
entered into indemnification agreements with its officers and directors
containing provisions which may require the Company, among other things, to
indemnify the officers and directors against certain liabilities that may arise
by reason of their status or service as directors or officers (other than
liabilities arising from willful misconduct of a culpable nature), and to
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified.

There is no currently pending litigation or proceeding involving a
director, officer, employee or other agent of the Company in which
indemnification would be required or permitted.

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CERTAIN TRANSACTIONS

ASI was founded in 1956 by Mr. H. S. Kim, who currently serves as the
honorary Chairman and a Representative Director of ASI. ASI is a member of the
Anam Group of companies, consisting principally of companies in Korea in the
electronics industries. The management of ASI and the other companies in the
Anam Group are influenced to a significant degree by the family of H. S. Kim,
which, together with the Company, collectively owned approximately 40.7% of the
outstanding common stock of ASI as of December 31, 1997. A significant portion
of the shares owned by the Kim family are leveraged and as a result of this, or
for other reasons, the family's ownership could be substantially reduced. James
Kim, the founder of the Company and currently its Chairman and Chief Executive
Officer, is the eldest son of H. S. Kim. Since January 1992, in addition to his
other responsibilities, James Kim has been serving as acting Chairman of the
Anam Group and a director of ASI. Mr. In-Kil Hwang, the President and a
Representative Director of ASI, is the brother-in-law of James Kim. In addition,
four other members of Mr. Kim's family are on the 13-member Board of Directors
of ASI. In connection with the Reorganization, Mr. James Kim and members of his
family exchanged their interests in the Amkor Companies in return for shares of
Common Stock. James Kim and members of his family beneficially own approximately
65.8% of the outstanding Common Stock, and Mr. Kim and other members of his
family will continue to exercise significant control over the Company. The
Company and ASI have had a long-standing relationship. In 1996, 1997 and the six
months ended June 30, 1998, approximately 72%, 68% and 67%, respectively, of the
Company's revenues were derived from sales of services performed for the Company
by ASI. In addition, substantially all of the revenues of ASI in 1996, 1997 and
the six months ended June 30, 1998 were derived from services sold by the
Company. The Company expects that the businesses of the Company and ASI will
continue to remain highly interdependent by virtue of their supply relationship,
overlaps and family ties between their respective shareholders and management,
financial relationships, coordination of product and operation plans, joint
research and development activities and shared intellectual property rights. See
"Relationship with ASI" and "Reorganization."

The Company has entered into indemnification agreements with its officers
and directors containing provisions which may require the Company, among other
things, to indemnify the officers and directors against certain liabilities that
may arise by reason of their status or service as directors or officers (other
than liabilities arising from willful misconduct of a culpable nature), and to
advance to them expenses incurred as a result of any proceeding against them as
to which they could be indemnified.

In connection with the Reorganization, the Company has entered into tax
indemnification agreements with Mr. and Mrs. Kim and the Kim Family Trusts
pursuant to which the Company will be indemnified by such stockholders with
respect to their proportionate share of any U.S. federal or state corporate
income taxes attributable to the failure of AEI to qualify as an S Corporation
for any period or in any jurisdiction for which S Corporation status was claimed
through the Termination Date. The tax indemnification agreements also provide
that under certain circumstances the Company will indemnify Mr. and Mrs. Kim and
the Kim Family Trusts if such stockholders are required to pay additional taxes
or other amounts attributable to taxable years on or before the Termination Date
as to which AEI filed or files tax returns claiming status as an S Corporation.
AEI has made various distributions to such stockholders which have enabled them
to pay their income taxes on their allocable portions of the income of AEI. Such
distributions totaled approximately $13.0 million, $5.0 million and $33.1
milliion in 1996, 1997 and the first six months of 1998, respectively. The
Company believes that the amount of such undistributed net earnings was less
than $1.0 million at June 30, 1998. See "Reorganization" and Notes 1 and 10 of
Notes to Consolidated Financial Statements.

In February 1998 the Company sold its investment in ASI common stock to AK
Investments, Inc. ("AK Investments"), a company owned by Mr. Kim, for $13.9
million, the market value determined by the closing price of ASI shares on the
Korea Stock Exchange on the date of the sale. In exchange for such shares, AK
Investments assumed $13.9 million of the Company's long-term borrowing from
AUSA. See Note 6 of Notes to Consolidated Financial Statements.

In June, 1998, the Company purchased ASI's 40% interest in AAP for
approximately $34 million.

The Company incurs charges from ASI for assembly and test services
performed on a monthly basis. Historically, the Company has paid ASI for these
services on net 30-day terms. On July 21, 1998 the
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Company entered into a prepayment agreement with ASI relating to assembly and
test services. In accordance with the agreement, the Company made a $50 million
non-interest bearing advance to ASI, representing approximately one month's
charges for assembly and test services. The Company will offset this advance
against billings by ASI for assembly and test services provided in the fourth
quarter of 1998. This amount will be reflected in the current portion of Due
from Affiliate.

In connection with its wafer foundry agreement with TI, the Company and TI
agreed to revise certain payment and other terms contained in the Master
Purchase Agreement. As part of the revision, TI agreed to advance ATI $20
million in June 1998 as a prepayment of wafer foundry services to be provided in
the fourth quarter of 1998. The Company has recorded this amount in accrued
expenses. The Company in turn advanced these funds to ASI as a prepayment for
foundry service charges. The Company will offset the advance to ASI against
billings by ASI in the fourth quarter of 1998. This amount is reflected in the
current portion of due from affiliate. Under the terms of the revision to the
Master Purchase Agreement, the Company is ultimately responsible to reimburse TI
for any inability of ASI to comply with the terms of the agreement.

To facilitate capacity expansion for new product lines, certain customers
advanced ATI funds to purchase certain equipment to fulfill such customers'
forecasts. In certain cases, the customer has requested that the equipment be
installed in the ASI factories. In these cases, the Company receives funds from
the customer and advances the funds to ASI. ASI in turn purchases the necessary
equipment. ASI repays ATI through a reduction of the monthly processing charges
related to the customer product being assembled. ATI will reduce its obligation
to the customer through a reduction in the accounts receivable, due from the
customer, at the time services are billed. These amounts are reflected in
accrued expenses and current portion of due from affiliate. As of June 30, 1998
this amount was approximately $5.8 million.

The Company utilizes Anam S&T Co, Ltd. (AST) (an affiliate of ASI) as a key
supplier of leadframes. Historically, the Company has paid AST for these
services on net 30-day terms. Effective at the end of July 1998, the Company
changed its payment policy from net 30-days, to paid-in advance. Accordingly the
Company now pays for its materials before shipment. This change in payment
policy resulted in an advance to AST of approximately $5 million at the end of
July 1998. This amount will be reflected in the current portion of Due from
Affiliate.

Mr. Kim has executed certain guarantees to lenders in connection with
certain debt instruments of the Amkor Companies that remain outstanding. The
total contingent liability under such guarantees equalled approximately $74
million as of June 30, 1998. See Note 14 of Notes to Consolidated Financial
Statements.

The Company and Mr. Kim currently are parties to a loan agreement under
which Mr. Kim may borrow funds from the Company, subject to the Company's
consent. Mr. Kim has recognized compensation in 1996 and 1997 in the amount of
$101,716 and $3,000, respectively of imputed interest for loans under this
agreement. Since the beginning of the 1996 fiscal year, the maximum amount
outstanding under such agreement has been $6.5 million. All amounts due from Mr.
Kim have been repaid in full subsequent to December 31, 1997.

In 1996, Mr. Kim sold his interest in Amkor Anam Test Services, Inc.,
representing half of its outstanding capital stock, to AEI for $910,350. See
Note 17 of Notes to Consolidated Financial Statements.

AK Investments purchased certain securities held by AEI for $49.7 million,
which consideration was paid by assuming from AEI certain non-current payables
from AUSA. Subsequent to the sale of investments to AK Investments, AEI loaned
AK Investments an additional $12.8 million. This loan was repaid in full as of
March 31, 1998. See Notes 6 and 14 of Notes to Consolidated Financial
Statements. AK Investments repaid such amount in full during March 1998.

In 1996, the Kim Family Trusts borrowed $5.3 million at market interest
rates from AEI to purchase the real estate and develop the facilities that
comprise the Company's Chandler, Arizona plant and offices. In 1997, the Kim
Family Trusts, after making improvements, sold the real estate and facilities
back to AEI for $5.7 million which was used to repay the original loan from AEI.
See Note 14 of Notes to Consolidated Financial Statements.

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Members of the Kim family own all the outstanding shares of Forte Systems,
Inc. ("Forte"). The Company and Forte currently are parties to a loan agreement
under which Forte may borrow funds at market interest rates from the Company,
subject to the Company's consent. Since the beginning of the 1996 fiscal year,
the maximum amount outstanding under such agreement has been $3.8 million. See
Note 14 of Notes to Consolidated Financial Statements.

Members of the Kim family own all the outstanding shares of The Electronics
Boutique, Inc. (the "Electronics Boutique"). The Company and the Electronics
Boutique currently are parties to a loan agreement under which the Electronics
Boutique may borrow funds at market rates from the Company, subject to the
Company's consent. Since the beginning of the 1996 fiscal year, the maximum
amount outstanding under such agreement in the ordinary course of business of
the Electronics Boutique's business has been $3.0 million. In addition, in 1996,
the Electronics Boutique borrowed $50 million from AEI in connection with a
contemplated acquisition. However, this acquisition was abandoned by the
Electronics Boutique and the $50 million was repaid to AEI within eleven working
days of the date it was borrowed. Finally, the Company has guaranteed certain
vendor obligations and a line of credit of the Electronics Boutique, which total
approximately $8.7 million and $3.3 million, respectively as of June 30, 1998.
See Note 14 of Notes to Consolidated Financial Statements.

In addition, in each of the last three years, various Electronics Boutique
expenses were paid by the Company on behalf of Electronics Boutique and various
Company expenses were paid by Electronics Boutique on behalf of the Company.
These expenses include insurance premiums, employee medical claims, interest,
rent and other miscellaneous expenses. In 1995, 1996 and 1997, the Company made
net advancements on behalf of Electronics Boutique of $604,000, $128,000 and
$147,000. In 1997, Electronics Boutique repaid to the Company $2.4 million of
current and prior year advancements.

The Company has also unconditionally guaranteed obligations of EB Canada, a
subsidiary of Electronics Boutique, under a $4 million term loan agreement and a
$1 million line of credit. As of June 30, 1998, there was $3.3 million
outstanding under the term loan and no amounts outstanding under the line of
credit.

The Company leases office space in West Chester, Pennsylvania from the Kim
Family Trusts. The lease expires in 2006. The Company has the option to extend
the lease for an additional 10 years. The monthly rent pursuant to such lease is
$92,000. The Company sub-leases a portion of this office space to Forte for
which the monthly rent is $43,000. See Note 14 of Notes to Consolidated
Financial Statements.

At December 31, 1996 and 1997 and June 30, 1998, the Company had advances
and notes receivable from affiliates other than ASI and AUSA of $23.0 million,
$36.5 million and $27.5 million, respectively. See Note 14 of Notes to
Consolidated Financial Statements.

The Company maintains split-value life insurance policies on the joint
lives of James J. Kim and Agnes C. Kim for the benefit of the Trust of James J.
Kim Dated September 30, 1992 (the "1992 Trust"). The aggregate annual premiums
on such policies paid by the Company are approximately $0.7 million. Upon the
death of James J. Kim or Agnes C. Kim resulting in receipt by the 1992 Trust of
death benefits, or upon the surrender, cancellation or lapse of the policy, the
Company will receive an amount equal to the lesser of the total net premiums
paid in cash by it or the net cash surrender value of the policy as of the date
of death or surrender.

Mr. Robert Denham was appointed to the Company's Board of Directors in July
1998. Until December 1997 Mr. Denham was the Chairman of Salomon Inc., one of
the predecessors of Salomon Smith Barney, Inc., one of the underwriters for the
Company's initial public offering.

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PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock outstanding as of the date of this Prospectus, by
(i) each person or entity who is known by the Company to own beneficially 5% or
more of the Company's outstanding Common Stock; (ii) each director of the
Company; (iii) each of the Named Executive Officers; and (iv) all directors and
executive officers of the Company as a group.

BENEFICIAL OWNERSHIP(1)
-----------------------
NAME AND ADDRESS                          NUMBER       PERCENT
----------------                        -----------    --------

James J. and Agnes C. Kim(2)(3)(4)..........................  32,275,000      27.38%
1345 Enterprise Drive
West Chester, PA 19380
David D. Kim Trust of December 31, 1987(3)(5)...............  13,750,000      11.67
1500 E. Lancaster Avenue
Paoli, PA 19301
John T. Kim Trust of December 31, 1987(3)(5)................  13,750,000      11.67
1500 E. Lancaster Avenue
Paoli, PA 19301
Susan Y. Kim Trust of December 31, 1987(3)(5)(6)............  13,750,000      11.67
1500 E. Lancaster Avenue
Paoli, PA 19301
Winston J. Churchill........................................      10,000       *
Robert E. Denham............................................       5,000       *
Thomas D. George............................................          --         --
Gregory K. Hinckley.........................................          --         --
John N. Boruch..............................................          --         --
Eric R. Larson..............................................          --         --
Frank J. Marcucci...........................................          --         --
Michael D. O'Brien..........................................          --         --
All directors and executive officers as a group (11
persons)..................................................  32,290,000      27.38

- ---------------
* Represents less than 1%

(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rule,
beneficial ownership includes any share as to which the individual or entity
has voting power or investment power. Unless otherwise indicated, each
person or entity has sole voting and investment power with respect to shares
shown as beneficially owned.

(2) James J. and Agnes C. Kim are husband and wife. Accordingly, each may be
deemed to beneficially own shares of Common Stock held in the name of the
other.

(3) David D. Kim, John T. Kim and Susan Y. Kim are children of James J. and
Agnes C. Kim. Each of the David D. Kim Trust of December 31, 1987, John T.
Kim Trust of December 31, 1987 and Susan Y. Kim Trust of December 31, 1987
has in common Susan Y. Kim and John F.A. Earley as co-trustees, in addition
to a third trustee (John T. Kim in the case of the Susan Y. Kim Trust and
the John T. Kim Trust and David D. Kim in the case of the David D. Kim
Trust) (the trustees of each trust may be deemed to be the beneficial owners
of the shares held by such trust). In addition, the trust agreement for each
of these trusts encourages the trustees of the trusts to vote the shares of
Common Stock held by them, in their discretion, in concert with James Kim's
family. Accordingly, the trusts, together with their respective trustees and
James J. and Agnes C. Kim, may be considered a "group" under Section 13(d)
of the Exchange Act. This group may be deemed to have beneficial ownership
of 73,525,000 shares or 62.4% of the outstanding shares of Common Stock
after the Initial Public Offering.

(4) Salomon Smith Barney may, subject to certain limitations, from time to time,
borrow shares of Common Stock from Mr. and Mrs. Kim to settle short sales of
Common Stock (or to return Common Stock previously borrowed by Salomon Smith
Barney to settle such short sales) entered into by Salomon Smith Barney to
hedge any long position in the Convertible Notes resulting from its
market-making activities; provided that the total number of shares borrowed
at any time may not exceed 7,000,000. See "Plan of Distribution." If at any
time 7,000,000 shares are borrowed from Mr. and Mrs. Kim and sold and not
returned, their beneficial ownership of the Common Stock would be reduced to
20.2%.

(5) These three trusts together with the trusts described in note (6) below
comprise the Kim Family Trusts.

(6) Includes 8,200,000 shares held by a trust established for the benefit of
Susan Y. Kim's children.

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DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue 500,000,000 shares of Common Stock,
$.001 par value, and 10,000,000 shares of Preferred Stock, $.001 par value. As
of June 30, 1998, there were an aggregate of 117,860,000 shares of Common Stock
outstanding, 3,168,500 shares of Common Stock issuable upon exercise of
outstanding options, 3,381,500 shares of Common Stock reserved for issuance
under the Company's 1998 Stock Plan, 1998 Stock Option Plan for French
Employees, 1998 Director Option Plan and 1998 Employee Stock Purchase Plan and
15,333,333 shares of Common Stock reserved for issuance upon conversion of the
Convertible Notes.

The following description of the Company's capital stock does not purport
to be complete and is subject to and qualified in its entirety by the
Certificate of Incorporation and the Bylaws, which are included as exhibits to
the Registration Statement of which this Prospectus forms a part, and by the
provisions of applicable Delaware law.

The Certificate of Incorporation and the Bylaws contain certain provisions
that are intended to enhance the likelihood of continuity and stability in the
composition of the Board of Directors and which may have the effect of delaying,
deferring, or preventing a future takeover or change in control of the Company
unless such takeover or change in control is approved by the Board of Directors.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share on all matters
to be voted upon by the stockholders. Holders of Common Stock do not have
cumulative voting rights, and, therefore, holders of a majority of the shares
voting for the election of directors can elect all of the directors. In such
event, the holders of the remaining shares will not be able to elect any
directors. See "Risk Factors -- Benefits of the Initial Public Offering to
Existing Stockholders; Continued Control by Existing Stockholders."

Holders of the Common Stock are entitled to receive such dividends as may
be declared from time to time by the Board of Directors out of funds legally
available therefor, subject to the terms of any existing or future agreements
between the Company and its debtholders. The Company has never declared or paid
cash dividends on its capital stock, expects to retain future earnings, if any,
for use in the operation and expansion of its business, and does not anticipate
paying any cash dividends in the foreseeable future. See "Dividend Policy." In
the event of the liquidation, dissolution or winding up of the Company, the
holders of Common Stock are entitled to share ratably in all assets legally
available for distribution after payment of all debts and other liabilities and
subject to the prior rights of any holders of Preferred Stock then outstanding.

PREFERRED STOCK

The Company's Board of Directors is authorized to issue 10,000,000 shares
of Preferred Stock in one or more series and to fix the price, rights,
preferences, privileges and restrictions thereof, including dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares constituting
a series or the designation of such series, without any further vote or action
by the Company's stockholders. The issuance of Preferred Stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of delaying, deferring or making more
difficult a change in control of the Company and may adversely affect the market
price of, and the voting and other rights of, the holders of Common Stock. The
issuance of Preferred Stock with voting and conversion rights may adversely
affect the voting power of the holders of Common Stock, including the loss of
voting control to others. The Company has no current plans to issue any
additional shares of Preferred Stock. See "Risk Factors -- Anti-Takeover Effects
of Delaware Law and Certain Charter Provisions."

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EFFECT OF DELAWARE ANTI-TAKEOVER STATUTE

The Company is subject to Section 203 of the Delaware General Corporation
Law (the "Anti-Takeover Law"), which regulates corporate acquisitions. The
Anti-Takeover Law prevents certain Delaware corporations, including those whose
securities are listed for trading on the Nasdaq National Market, from engaging,
under certain circumstances in a "business combination" with any "interested
stockholder" for three years following the date that such stockholder became an
interested stockholder. For purposes of the Anti-Takeover Law, a "business
combination" includes, among other things, a merger or consolidation involving
the Company and the interested shareholder and the sale of more than 10% of the
Company's assets. In general, the Anti-Takeover Law defines an "interested
stockholder" as any entity or person beneficially owning 15% or more the
outstanding voting stock of the Company and any entity or person affiliated with
or controlling or controlled by such entity or person. A Delaware corporation
may "opt out" of the Anti-Takeover Law with an express provision in its original
certificate of incorporation or an express provision in its certificate of
incorporation or bylaws resulting from amendments approved by the holders of at
least a majority of the Company's outstanding voting shares. The Company has not
"opted out" of the provisions of the Anti-Takeover Law. See "Risk
Factors -- Anti-Takeover Effects of Delaware Law and Certain Charter
Provisions."

TRANSFER AGENT

The Transfer Agent and Registrar for the Common Stock is First Chicago
Trust Company of New York Shareholder Services, 525 Washington Boulevard, Jersey
City, NJ 07310; telephone (201) 324-0014.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Initial Public Offering, there had been no market for the
Common Stock and there is no assurance that a significant public market for the
Common Stock will be sustained. Sales of substantial amounts of Common Stock in
the public market could adversely affect the market price of the Common Stock
and could impair the Company's future ability to raise capital through the sale
of its equity securities.

As of the date of this Prospectus, the Company has outstanding 117,860,000
shares of Common Stock. In addition to the 40,250,000 shares of Common Stock
offered pursuant to the Initial Public Offering, there are approximately
15,333,333 shares of Common Stock issuable upon conversion of the Convertible
Notes, all of which will be freely tradeable. In addition, Salomon Smith Barney
may, subject to certain limitations, from time to time, borrow shares of Common
Stock from Mr. and Mrs. Kim to settle short sales of Common Stock (or to return
Common Stock previously borrowed by Salomon Smith Barney to settle such short
sales) entered into by Salomon Smith Barney to hedge any long position in the
Convertible Notes resulting from its market-making activities; provided that the
total number of shares borrowed at any time may not exceed 7,000,000. Salomon
Smith Barney is not under any obligation to engage in any market-making
transactions with respect to the Convertible Notes, and any market-making in the
Convertible Notes actually engaged in by Salomon Smith Barney may cease at any
time. See "Plan of Distribution." The shares of Common Stock borrowed and
returned to Mr. and Mrs. Kim (the "Control Shares") may be resold from time to
time by Mr. and Mrs. Kim subject to certain volume, manner of sale and other
restrictions described below under Rule 144 under the Securities Act. Excluding
all such freely tradeable shares and Control Shares, approximately 70,610,000
additional shares of Common Stock will be outstanding upon the closing of the
Initial Public Offering (excluding 3,168,500 shares issuable upon the exercise
of options outstanding as of June 30, 1998), all of which are "restricted"
shares (the "Restricted Shares") under the Securities Act. Such Restricted
Shares may be sold only if registered under the Securities Act or sold in
accordance with an available exemption from such registration.

Under Rule 144, a person (or persons whose shares are aggregated in
accordance with the Rule) who has beneficially owned his or her Restricted
Shares for at least one year, including persons who are affiliates of the
Company, will be entitled to sell, within any three month period a number of
Restricted Shares that does not exceed the greater of (i) one percent of the
then outstanding number of shares of Common Stock (1,178,600 shares of Common
Stock immediately after the consummation of the Initial Public Offering) or (ii)
the average weekly trading volume of the shares of Common Stock during the four
calendar weeks preceding each such sale. In addition, sales under Rule 144 are
also subject to certain manner of sale provisions and notice requirements and to
the availability of current public information about the Company. After
Restricted Shares are held for two years, a person who is not an affiliate of
the Company is entitled to sell such shares under Rule 144 without regard to
such volume limitations, or manner of sale, notice or public information
requirements under Rule 144. Sales of Restricted Shares by affiliates will
continue to be subject to such volume limitations, and manner of sale, notice
and public information requirements.

In connection with the Initial Public Offering, the Company agreed with the
Underwriters not to offer, pledge, sell, contract to sell, or otherwise dispose
of (or enter into any transaction which is designed to, or could be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any affiliate
of the Company or any person in privity with the Company or any affiliate of the
Company), directly or indirectly, or announce the offering of, any other shares
of Common Stock or any securities or options convertible into, or exchangeable
or exercisable for, shares of Common Stock (other than the Convertible Notes)
for a period of 180 days following April 30, 1998 without the prior written
consent of Salomon Smith Barney, subject to certain limited exceptions. In
addition, each of the Company's officers, directors and stockholders has agreed
with the Underwriters not to offer, sell, contract to sell, pledge or otherwise
dispose of, or file a registration statement with the Securities and Exchange
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Exchange Act with respect to, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for shares of Common
Stock, or publicly announce an intention to effect any such transaction, for a
period of 180 days after April 30, 1998

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other than pursuant to the Securities Loan Agreement or with the prior written
consent of Salomon Smith Barney, subject to certain limited exceptions.

Beginning April 29, 1999, approximately 70,610,000 Restricted Shares
subject to the lock-up agreements will become eligible for sale in the public
market pursuant to Rule 144.

As of June 30, 1998 the Company had granted options to purchase 3,168,500
shares of Common Stock under the 1998 Stock Plan, 1998 Stock Option Plan for
French Employees and the 1998 Director Option Plan. See "Management -- Stock
Plans." The Company intends to file a Form S-8 registration statement under the
Securities Act to register shares of Common Stock reserved for issuance under
the 1998 Stock Plan, 1998 Director Option Plan and 1998 Employee Stock Purchase
Plan, and shares of Common Stock issuable upon exercise of outstanding options.
Shares of Common Stock issued upon exercise of options after the effective date
of the Form S-8 will be available for sale in the public market, subject to Rule
144 volume limitations applicable to affiliates and to lock-up agreements.

PLAN OF DISTRIBUTION

Mr. and Mrs. Kim (referred to herein as the "Lender") and Salomon Smith
Barney have entered into a Securities Loan Agreement (the "Securities Loan
Agreement") which provides that, subject to certain restrictions and with the
agreement of the Lender, Salomon Smith Barney may from time to time borrow,
return and reborrow shares of Common Stock from the Lender (the "Borrowed
Securities"); provided, however, that the number of Borrowed Securities at any
time may not exceed 7,000,000 shares, subject to adjustment to provide
antidilution protection. The Securities Loan Agreement is intended to facilitate
market-making activity in the Convertible Notes by Salomon Smith Barney. Salomon
Smith Barney may, subject to certain limitations, from time to time use Borrowed
Securities to settle short sales of Common Stock (or to return Common Stock
previously borrowed by Salomon Smith Barney to settle such short sales) entered
into by Salomon Smith Barney to hedge any long position in the Convertible Notes
resulting from its market-making activities. Such sales will be made on the
Nasdaq National Market or in the over-the-counter market at market prices
prevailing at the time of sale or at prices related to such market prices.

Market conditions will dictate the extent and timing of Salomon Smith
Barney's market-making transactions in the Convertible Notes and the consequent
need to borrow shares of Common Stock. The availability of shares of Common
Stock under the Securities Loan Agreement, if any, at any time is not assured
and any such availability does not assure market-making activity with respect to
the Convertible Notes. Any market-making actually engaged in by Salomon Smith
Barney may cease at any time. The foregoing description of the Securities Loan
Agreement does not purport to be complete and is qualified in its entirety by
reference to such agreement, the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part.

The Lender and the Company have agreed to indemnify Salomon Smith Barney
against certain liabilities including liabilities under the Securities Act.

In the ordinary course of business, Salomon Smith Barney has engaged in
investment banking transactions with the Company (including as an Underwriter of
the Initial Public Offering), Mr. and Mrs. Kim and their respective affiliates
and may do so in the future.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo
Alto, California.

75

77

EXPERTS

The consolidated financial statements and schedule of Amkor Technology,
Inc. as of December 31, 1996 and 1997, and for each of the years in the
three-year period ended December 31, 1997, included in this Prospectus and
elsewhere in this Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as set forth in their reports dated
February 3, 1998 (except with respect to the sale of the investment in Anam
Semiconductor, Inc. ("ASI") common stock discussed in Note 6 to the Consolidated
Financial Statements, as to which the date is February 16, 1998, the
Reorganization discussed in Note 1, as to which the date is April 29, 1998 and
the Initial Public Offering discussed in Note 2, as to which the date is May 8,
1998) with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports. In those reports, such
firm states that with respect to the investment in ASI its opinion is based on
the report of other independent public accountants, namely Samil Accounting
Corporation.

The consolidated financial statements of ASI as of December 31, 1996 and
1997, and for each of the years in the three-year period ended December 31, 1997
(not included in this Prospectus or elsewhere in this Registration Statement)
have been audited by Samil Accounting Corporation, independent public
accountants, as set forth in their report dated March 20, 1998 with respect
thereto, which report is included herein in reliance upon the authority of said
firm as experts. In that report, such firm states that with respect to Anam
Engineering & Construction Co., Ltd. ("AEC") and AUSA, subsidiaries of ASI, and
the investment in AAP, its opinion is based on the reports of other independent
public accountants, namely Chong Un & Company, Siana, Carr and O'Connor, LLP and
SyCip Gorres, Velayo & Co, respectively.

Reference is made to the report regarding AEC which includes an explanatory
paragraph with respect to the ability of AEC to continue as a going concern and
the report regarding ASI which includes an explanatory paragraph regarding
changes in accounting principles, the impact of the Korean economic situation on
ASI and the ability of ASI to continue as a going concern.

76

78

GLOSSARY

ASIC.......................  Application Specific Integrated Circuit. A
custom-designed integrated circuit that performs
specific functions which would otherwise require a
number of off-the-shelf integrated circuits to
perform. The use of an ASIC in place of a
conventional integrated circuit reduces product
size and cost and also improves reliability.

BGA........................  Ball grid array.

Bus........................  A common pathway, or channel, between multiple
devices.

CMOS.......................  Complementary Metal Oxide Silicon. Currently the
most common integrated circuit fabrication process
technology, CMOS is one of the latest fabrication
techniques to use metal oxide semiconductor
transistors.

DAC........................  Digital Analog Converter. A device that converts
digital pulses into analog signals.

Die........................  A piece of a semiconductor wafer containing the
circuitry of a single chip.

DRAM.......................  Dynamic Random Access Memory. A type of volatile
memory product that is used in electronic systems
to store data and program instructions. It is the
most common type of RAM and must be refreshed with
electricity thousands of times per second or else
it will fade away.

DSP........................  Digital Signal Processor. A type of integrated
circuit that processes and manipulates digital
information after it has been converted from an
analog source.

EEPROM.....................  Electrically Erasable and Programmable Read-Only
Memory. A form of non-volatile memory that can be
erased electronically before being reprogrammed.

EPROM......................  Erasable Programmable Read-Only Memory. A
programmable and reusable chip that holds its
content until erased under ultraviolet light.

Ethernet...................  A type of local area network (LAN). Most widely
used LAN access method.

Flash Memory...............  A type of non-volatile memory, similar to an EEPROM
in that it is erasable and reprogrammable.

FlipChip...................  Package type where silicon die is attached to the
packaging substrate using solder balls instead of
wires. See "Business -- Products."

GPS........................  Global Positioning System. A system for identifying
earth locations.

GUI........................  Graphical User Interface. A graphics-based user
interface that incorporates icons, pull-down menus
and a mouse.

IC.........................  Integrated Circuit. A combination of two or more
transistors on a base material, usually silicon.
All semiconductor chips, including memory chips and
logic chips, are just very complicated ICs with
thousands of transistors.

Input/Output...............  A connector which interconnects the chip to the
package or one package level to the next level in
the hierarchy. Also referred to as pin out
connections or terminals.

ISDN.......................  Integrated Services Digital Network. An
international telecommunications standard for
transmitting voice, video and data over digital
lines running at 64 Kbps.

Logic Device...............  A device that contains digital integrated circuits
that process, rather than store, information.

77

79

Mask.......................  A piece of glass on which an IC's circuitry design
is laid out. Integrated circuits may require up to
20 different layers of design, each with its own
mask. In the IC production process, a light shines
through the mask leaving an image of the design on
the wafer. Also known as a reticle.

MBGA.......................  Micro Ball Grid Array. See "Business -- Products."

Micron.....................  1/25,000 of an inch. Circuitry on an IC typically
follows lines that are less than one micron wide.

MOS........................  A device which consists of three layers (metal,
oxide and semiconductors) and operates as a
transistor.

MQFP.......................  Metric Quad Flat Package. See
"Business -- Products."

PBGA.......................  Plastic Ball Grid Array. See
"Business -- Products."

PC.........................  Personal Computer.

PCMCIA.....................  Standard for connecting peripherals to computers.

PDA........................  Personal Digital Assistant.

PDIP.......................  Plastic Dual In-Line Packages. See
"Business -- Products."

Photolithography...........  A lithographic technique used to transfer the
design of the circuit paths and electronic elements
on a chip onto a wafer's surface.

PLCC.......................  Plastic Leaded Chip Carrier. See
"Business -- Products."

PLD........................  A logic chip that is programmed at the customer's
site.

PQFP.......................  Plastic Quad Flat Packages. See
"Business -- Products."

RF.........................  Radio Frequency. The range of electromagnetic
frequencies above the audio range and below visible
light.

SIP........................  Single In-Line Package. See "Business -- Products."

SOIC.......................  Small Outline IC Packages. See
"Business -- Products."

SRAM.......................  Static Random Access Memory. A type of volatile
memory product that is used in electronic systems
to store data and program instructions. Unlike the
more common DRAM, it does not need to be refreshed.

SSOP.......................  Shrink Small Outline Packages. See
"Business -- Products."

Surface Mount Technology...  A circuit board packaging technique in which the
leads (pins) on the chips and components are
soldered on top of the board.

TQFP.......................  Thin Quad Flat Packages. See
"Business -- Products."

TSOP.......................  Thin Small Outline Packages. See
"Business -- Products."

TSSOP......................  Thin Shrink Small Outline Packages. See
"Business -- Products."

Wafer......................  Thin, round, flat piece of silicon that is the base
of most integrated circuits.

Wire Bonding...............  The method used to attach very fine wire to
semiconductor components in order to provide
electrical continuity between the semiconductor die
and a terminal.

78

80

AMKOR TECHNOLOGY, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
----

Report of Independent Public Accountants (Arthur Andersen
LLP)......................................................   F-2
Consolidated Statements of Income -- Years ended December
31, 1995, 1996 and 1997 and
Six Months ended June 30, 1997 (unaudited) and 1998
(unaudited)...............................................   F-3
Consolidated Balance Sheets -- December 31, 1996 and 1997
and June 30, 1998 (unaudited).............................   F-4
Consolidated Statements of Stockholders' Equity -- Years
ended December 31, 1995, 1996 and 1997 and Six Months
Ended June 30, 1998 (unaudited)...........................   F-5
Consolidated Statements of Cash Flows -- Years ended
December 31, 1995, 1996 and 1997 and Six Months ended June
30, 1997 (unaudited) and June 30, 1998 (unaudited)........   F-6
Notes to Consolidated Financial Statements..................   F-7

Independent Auditors' Report (Samil Accounting Corporation)
with respect to Anam Industrial Co., Ltd..................  F-30
Independent Auditors' Report (Chong Un & Company) with
respect to Anam Engineering & Construction Co., Ltd.......  F-32
Report of Independent Public Accountants (SyCip Gorres
Velayo & Co) with respect to Amkor/Anam Pilipinas, Inc....  F-33
Independent Auditors' Report (Siana Carr & O'Connor, LLP)
with respect to Anam USA, Inc.............................  F-34

F-1

81

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Amkor Technology, Inc.:

We have audited the accompanying consolidated balance sheets of Amkor
Technology, Inc. and its subsidiaries (see Note 1) as of December 31, 1996 and
1997, and the related consolidated statements of income, stockholders' equity
and cash flows for each of the three years in the period ended December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements of
Anam Semiconductor, Inc. ("ASI"), the investment in which is reflected in the
accompanying financial statements using the equity method of accounting. The
investment in ASI represents 4% and 2% of total assets at December 31, 1996 and
1997, respectively, and the equity in its net income represents 5% of net income
in 1995 and the equity in its net loss represents 4% and 29% of net income
before the equity in income (loss) of ASI in 1996 and 1997, respectively. The
statements of ASI were audited by other auditors whose report has been furnished
to us and our opinion, insofar as it relates to amounts included for ASI, is
based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based upon our audit and the report of other audits, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Amkor Technology, Inc. and its
subsidiaries as of December 31, 1996 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.

The report of the other auditors referred to above indicates that the
financial statements of ASI have been prepared assuming that ASI will continue
as a going concern. The operations of ASI have been significantly affected, and
will continue to be affected for the foreseeable future, by Korea's unstable
economy caused by currency volatility and unstable finance markets in Korea. ASI
has traditionally operated with a significant amount of debt relative to its
equity and has a significant working capital deficit at December 31, 1997.
Because of Korea's unstable economy and ASI's dependence on debt financing,
there are significant uncertainties that may affect ASI's future operations and
its abilities to maintain or refinance certain debt obligations as they mature,
which raise substantial doubt regarding ASI's ability to continue as a going
concern. The ultimate outcome of these uncertainties cannot be determined
presently and ASI's financial statements do not include any adjustments that
might result from these uncertainties. ASI's plans to address these matters are
included in the notes to the ASI financial statements.

ARTHUR ANDERSEN LLP

Philadelphia, Pa.

February 3, 1998 (except with respect to the sale of the investment in Anam
Semiconductor, Inc. common stock discussed in Note 6, as to which the date is
February 16, 1998, the Reorganization discussed in Note 1, as to which the date
is April 29, 1998, and the Initial Public Offering discussed in Note 2, as to
which the date is May 8, 1998).

F-2

82

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

FOR THE YEAR ENDED              FOR THE SIX MONTHS
DECEMBER 31,                   ENDED JUNE 30,
----------------------------------   -------------------------
1995        1996         1997         1997          1998
--------   ----------   ----------   -----------   -----------
(UNAUDITED)   (UNAUDITED)

NET REVENUES.............................  $932,382   $1,171,001   $1,455,761    $663,490      $756,457
COST OF REVENUES -- including purchases
from ASI (Note 11).....................   783,335    1,022,078    1,242,669     586,542       627,162
--------   ----------   ----------    --------      --------
GROSS PROFIT.............................   149,047      148,923      213,092      76,948       129,295
--------   ----------   ----------    --------      --------
OPERATING EXPENSES:
Selling, general and administrative....    55,459       66,625      103,726      47,265        57,654
Research and development...............     8,733       10,930        8,525       3,515         3,995
--------   ----------   ----------    --------      --------
Total operating expenses............    64,192       77,555      112,251      50,780        61,649
--------   ----------   ----------    --------      --------
OPERATING INCOME.........................    84,855       71,368      100,841      26,168        67,646
--------   ----------   ----------    --------      --------
OTHER (INCOME) EXPENSE:
Interest expense, net..................     9,797       22,245       32,241      16,355        14,397
Foreign currency (gain) loss...........     1,512        2,961         (835)        100         3,703
Other expense, net.....................     6,523        3,150        8,429       1,287         5,897
--------   ----------   ----------    --------      --------
Total other expense.................    17,832       28,356       39,835      17,742        23,997
--------   ----------   ----------    --------      --------
INCOME BEFORE INCOME TAXES, EQUITY IN
INCOME (LOSS) OF ASI AND MINORITY
INTEREST...............................    67,023       43,012       61,006       8,426        43,649
PROVISION FOR INCOME TAXES...............     6,384        7,876        7,078       2,689        13,487
EQUITY IN INCOME (LOSS) OF ASI...........     2,808       (1,266)     (17,291)         --            --
MINORITY INTEREST........................     1,515          948       (6,644)      1,859           559
--------   ----------   ----------    --------      --------
NET INCOME...............................  $ 61,932   $   32,922   $   43,281    $  3,878      $ 29,603
========   ==========   ==========    ========      ========
PRO FORMA DATA (UNAUDITED):
Historical income before income taxes,
equity in income (loss) of ASI and
minority interest...................  $ 67,023   $   43,012   $   61,006    $  8,426      $ 43,649
Pro forma provision for income taxes...    16,784       10,776       10,691       5,389        12,659
--------   ----------   ----------    --------      --------
Pro forma income before equity in
income (loss) of ASI and minority
interest............................    50,239       32,236       50,315       3,037        30,990
Historical equity in income (loss) of
ASI.................................     2,808       (1,266)     (17,291)         --            --
Historical minority interest...........     1,515          948       (6,644)      1,859           559
--------   ----------   ----------    --------      --------
Pro forma net income...................  $ 51,532   $   30,022   $   39,668    $  1,178      $ 30,431
========   ==========   ==========    ========      ========
Basic and diluted pro forma net income
per common share....................  $    .62   $      .36   $      .48    $    .01      $    .32
========   ==========   ==========    ========      ========
Shares used in computing basic pro forma
net income per common share............    82,610       82,610       82,610      82,610        94,323
========   ==========   ==========    ========      ========
Shares used in computing diluted pro
forma net income per common share......    82,610       82,610       82,610      82,610        99,519
========   ==========   ==========    ========      ========

The accompanying notes are an integral part of these statements.

F-3

83

AMKOR TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

DECEMBER 31,
--------------------     JUNE 30,
1996        1997         1998
--------    --------    -----------
(UNAUDITED)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents...............................  $ 49,664    $ 90,917     $170,461
Short-term investments..................................       881       2,524        2,824
Accounts receivable --
Trade, net of allowance for doubtful accounts of
$1,179, $4,234 and $5,593..........................   170,892     102,804      106,112
Due from affiliates..................................    26,886      14,431       39,333
Other................................................     6,426       4,879        5,675
Inventories.............................................   101,920     115,870       93,044
Other current assets....................................     8,618      26,997       16,233
--------    --------     --------
Total current assets............................   365,287     358,422      433,682
--------    --------     --------
PROPERTY, PLANT AND EQUIPMENT, net........................   324,895     427,061      422,533
--------    --------     --------
INVESTMENTS:
ASI at equity...........................................    31,154      13,863           --
Other...................................................    38,090       5,958        5,836
--------    --------     --------
Total investments...............................    69,244      19,821        5,836
--------    --------     --------
OTHER ASSETS:
Due from affiliates.....................................    20,699      29,186       25,308
Other...................................................    24,739      21,102       60,060
--------    --------     --------
45,438      50,288       85,368
--------    --------     --------
Total assets....................................  $804,864    $855,592     $947,419
========    ========     ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion of long-term
debt.................................................  $191,813    $167,317     $ 32,973
Trade accounts payable..................................    45,798     113,037       92,863
Due to affiliates.......................................    33,379      15,581        2,413
Bank overdraft..........................................    14,518      29,765       12,937
Accrued expenses........................................    30,156      43,973       90,784
Accrued income taxes....................................    12,838      26,968       33,284
--------    --------     --------
Total current liabilities.......................   328,502     396,641      265,254
--------    --------     --------
LONG-TERM DEBT............................................   167,444     196,934       18,120
--------    --------     --------
CONVERTIBLE SUBORDINATED NOTES............................        --          --      207,000
--------    --------     --------
DUE TO ANAM USA, INC. (Note 11)...........................   234,894     149,776           --
--------    --------     --------
OTHER NONCURRENT LIABILITIES..............................    12,286      12,084       11,559
--------    --------     --------
COMMITMENTS AND CONTINGENCIES (Notes 1 and 13)
MINORITY INTEREST.........................................    15,926       9,282           --
--------    --------     --------
STOCKHOLDERS' EQUITY:
Amkor Technology, Inc. -- common stock..................        45          45          118
AK Industries, Inc. -- common stock.....................         1           1           --
Additional paid-in capital..............................    16,770      20,871      381,487
Retained earnings.......................................    32,340      70,621       63,881
Unrealized losses on investments........................    (1,586)         --           --
Cumulative translation adjustment.......................    (1,758)       (663)          --
--------    --------     --------
Total stockholders' equity......................    45,812      90,875      445,486
--------    --------     --------
Total liabilities and stockholders' equity......  $804,864    $855,592     $947,419
========    ========     ========

The accompanying notes are an integral part of these statements.

F-4

84

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 AND THE SIX MONTHS ENDED
JUNE 30, 1998
(IN THOUSANDS)

AMKOR          AK                                 UNREALIZED
TECHNOLOGY,   INDUSTRIES,                               GAINS
INC.          INC.       ADDITIONAL                (LOSSES)      CUMULATIVE
COMMON        COMMON       PAID-IN     RETAINED        ON        TRANSLATION
STOCK         STOCK       CAPITAL     EARNINGS    INVESTMENTS    ADJUSTMENT      TOTAL
-----------   -----------   ----------   ---------   -----------   ------------   ---------

BALANCE AT JANUARY 1, 1995..........     $ 45           $ 1        $ 16,494    $ (6,359)     $   (35)      $  (529)     $   9,617
Net income........................       --            --              --      61,932           --            --         61,932
Distributions.....................       --            --              --     (19,922)          --            --        (19,922)
Change in division equity
account.........................       --            --              --      (4,505)          --            --         (4,505)
Unrealized (losses) on
investments.....................       --            --              --          --       (2,015)           --         (2,015)
Currency translation
adjustments.....................       --            --              --          --           --           182            182
----           ---        --------    --------      -------       -------      ---------
BALANCE AT DECEMBER 31, 1995........       45             1          16,494      31,146       (2,050)         (347)        45,289
Net income........................       --            --              --      32,922           --            --         32,922
Distributions.....................       --            --              --     (15,123)          --            --        (15,123)
Change in division equity
account.........................       --            --              --     (16,605)          --            --        (16,605)
Unrealized gains on investments...       --            --              --          --          464            --            464
Currency translation
adjustments.....................       --            --              --          --           --        (1,411)        (1,411)
Acquisition of AATS (Note 14).....       --            --             276          --           --            --            276
----           ---        --------    --------      -------       -------      ---------
BALANCE AT DECEMBER 31, 1996........       45             1          16,770      32,340       (1,586)       (1,758)        45,812
Net income........................       --            --              --      43,281           --            --         43,281
Distributions.....................       --            --              --      (5,000)          --            --         (5,000)
Change in division equity
account.........................       --            --           4,101          --           --            --          4,101
Unrealized gains on investments...       --            --              --          --        1,586            --          1,586
Currency translation
adjustments.....................       --            --              --          --           --         1,095          1,095
----           ---        --------    --------      -------       -------      ---------
BALANCE AT DECEMBER 31, 1997........     $ 45           $ 1        $ 20,871    $ 70,621      $     0       $  (663)     $  90,875
Net income (unaudited)............       --            --              --      29,603           --            --         29,603
Distributions (unaudited).........       --            --              --     (33,100)          --            --        (33,100)
Issuance of 35,250,000 common
shares in public offering, net
(unaudited).....................       35            --         360,654          --           --            --        360,689
Acquisition of AKI (unaudited)....       --            (1)             --      (3,243)          --            --         (3,244)
Change in Par Value of stock in
connection with Company
Reorganization (unaudited)......       38            --             (38)         --           --            --             --
Currency translation adjustments
(unaudited).....................       --            --              --          --           --           663            663
----           ---        --------    --------      -------       -------      ---------
BALANCE AT JUNE 30, 1998
(unaudited).......................     $118           $ 0        $381,487    $ 63,881      $     0       $     0      $ 445,486
====           ===        ========    ========      =======       =======      =========

The accompanying notes are an integral part of these statements.

F-5

85

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

FOR THE YEAR ENDED                    FOR THE SIX MONTHS
DECEMBER 31,                         ENDED JUNE 30,
-----------------------------------------    --------------------------
1995           1996           1997           1997           1998
-----------    -----------    -----------    -----------    -----------
(UNAUDITED)    (UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.....................................  $    61,932    $    32,922    $    43,281     $   3,878      $  29,603
Adjustments to reconcile net income to net cash
provided by operating activities --
Depreciation and amortization................       26,614         57,825         81,864        42,766         56,321
Provision for accounts receivable............          444          1,271          3,490           800          1,359
Provision for excess and obsolete
inventory..................................        1,000            500         12,659         3,700          7,200
Deferred income taxes........................       (1,147)          (324)       (11,715)       (1,982)         3,357
Equity (gain) loss of investees..............       (2,713)           605         16,779        (1,022)            --
(Gain) loss on sale of fixed assets and
investments................................          126           (139)          (239)           --          1,307
Minority interest............................        1,515            948         (6,644)        1,859            559
Changes in assets and liabilities excluding
effects of acquisitions --
Accounts receivable..........................      (53,264)       (36,695)       (19,802)      (20,158)         1,933
Proceeds from sale/(repurchase of) accounts
receivable.................................           --             --         90,700            --        (12,900)
Other receivables............................       (2,565)          (925)         1,547        (1,727)          (796)
Inventories..................................      (32,668)       (16,380)       (26,609)      (18,876)        15,626
Due to/from affiliates, net..................       (3,001)        (8,203)       (19,138)       (5,735)       (34,192)
Other current assets.........................       (4,764)         1,694         (7,239)       (3,490)         5,638
Other non-current assets.....................         (326)        (6,108)         3,322        (3,252)        (2,689)
Accounts payable.............................       35,017        (16,852)        60,939        68,080        (13,874)
Accrued expenses.............................       17,687        (12,658)        13,817         4,990         43,731
Accrued taxes................................          404          7,433         14,130           716          6,316
Other long-term liabilities..................        9,034           (108)        (1,089)          801            242
Other, net...................................           --          3,750             --            --             --
-----------    -----------    -----------     ---------      ---------
Net cash provided by operating
activities.............................       53,325          8,556        250,053        71,348        108,741
-----------    -----------    -----------     ---------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment,
including purchase of AATS...................     (123,645)      (185,112)      (178,990)     (114,439)       (51,926)
Acquisition of minority interest in AAP........           --             --             --            --        (33,750)
Acquisition of AKI.............................           --             --             --            --         (3,244)
Sale of property, plant and equipment..........          110          2,228          1,413           858             75
Purchases of investments and issuances of notes
receivable...................................      (25,123)       (15,633)       (15,187)      (14,092)          (300)
Proceeds from sale of investments..............          351            520             --            --            122
-----------    -----------    -----------     ---------      ---------
Net cash used in investing activities....     (148,307)      (197,997)      (192,764)     (127,673)       (89,023)
-----------    -----------    -----------     ---------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in bank overdrafts and short-term
borrowings...................................       41,308         64,852         52,393        33,905       (177,896)
Net proceeds from issuance of 35,250,000 common
shares in public offering, net...............           --             --             --            --        360,689
Proceeds from issuance of Anam USA, Inc.
debt.........................................    1,059,759      1,205,174      1,408,086       432,644        522,116
Payments of Anam USA, Inc. debt................   (1,052,415)    (1,189,317)    (1,443,464)     (390,834)      (658,029)
Net proceeds from issuance of long-term debt...       50,080        102,193         11,389        10,056        203,298
Payments of long-term debt.....................       (3,021)        (3,138)       (43,541)      (18,698)      (157,252)
Distributions to stockholders..................      (20,003)       (15,205)        (5,000)       (5,000)       (33,100)
Change in division equity account..............       (4,505)       (16,605)         4,101         5,531             --
-----------    -----------    -----------     ---------      ---------
Net cash provided by (used in) financing
activities.............................       71,203        147,954        (16,036)       67,604         59,826
-----------    -----------    -----------     ---------      ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS....................................      (23,779)       (41,487)        41,253        11,279         79,544
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...      114,930         91,151         49,664        49,664         90,917
-----------    -----------    -----------     ---------      ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD.........  $    91,151    $    49,664    $    90,917     $  60,943      $ 170,461
===========    ===========    ===========     =========      =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest.....................................  $    12,594    $    24,125    $    37,070     $  28,696      $  18,353
Income taxes.................................          495          2,256          3,022           329          4,013

The accompanying notes are an integral part of these statements.

F-6

86

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Amkor
Technology, Inc. and its subsidiaries (the "Company"). All of the Company's
subsidiaries are wholly owned except for a small number of shares of each of the
Company's Philippine subsidiaries which are required to be owned by directors of
these companies pursuant to Philippine law.

The consolidated financial statements reflect the elimination of all
significant intercompany accounts and transactions.

The investments in and the operating results of 20% to 50% owned companies
are included in the consolidated financial statements using the equity method of
accounting.

Prior to the Reorganization (as defined below), the Company's financial
statements were presented on a combined basis as a result of common ownership
and business operations of all the Amkor Companies (as defined below), including
AK Industries, Inc. ("AKI"). The Reorganization was treated similar to a pooling
of interests as it represented an exchange of equity interests among companies
under common control, except for the acquisition of AKI which was accounted for
as a purchase transaction. The purchase price for the AKI stock, which
represented the fair value of these shares, approximated the book value of AKI.

Reorganization

Prior to the Reorganization (as defined herein) the combined financial
statements of Amkor Technology, Inc. ("ATI") and its subsidiaries and AKI and
its subsidiary included the accounts of the following based on the ownership
structure prior to the Reorganization (these companies are referred to as the
"Amkor Companies"):

- Amkor Electronics, Inc. ("AEI"), a U.S. S Corporation and its wholly
owned subsidiaries Amkor Receivables Corp and Amkor Wafer Fabrication
Services SARL (a French Limited Company) ("AWFS").

- T.L. Limited ("TLL") (a British Cayman Island Corporation) and its
Philippine subsidiaries, Amkor Anam Advanced Packaging, Inc. ("AAAP")
(wholly owned) and Amkor/Anam Pilipinas, Inc. ("AAP"), which was owned
60% by TLL and 40% by Anam Semiconductor Inc. which changed its name in
1998 from Anam Industrial Co., Ltd. ("ASI" -- see Notes 6 and 14), and
its wholly-owned subsidiary Automated MicroElectronics, Inc. ("AMI");

- C.I.L., Limited ("CIL") (a British Cayman Islands Corporation) and its
wholly-owned subsidiary Amkor/Anam Euroservices S.A.R.L. ("AAES") (a
French Corporation);

- Amkor Anam Test Services, Inc. (a U.S. Corporation) (see Note 17); and

- The semiconductor packaging and test business unit of Chamterry
Enterprises, Ltd. ("Chamterry"). During the third quarter of 1997
Chamterry transferred its customers to AEI and CIL and ceased operations
of its semiconductor and test business unit; and

- AKI (a U.S. Corporation) and its wholly-owned subsidiary, Amkor-Anam,
Inc. (a U.S. Corporation).

Prior to the Reorganization, all of the Amkor Companies were substantially
wholly owned by Mr. and Mrs. James Kim or entities controlled by members of Mr.
James Kim's immediate family (the "Founding Stockholders"), except for AAP which
was 40% owned by ASI and one third of AEI and all of AKI which were owned by
trusts established for the benefit of other members of Mr. James Kim's family
("Kim Family Trusts"). The Amkor Companies were an interdependent group of
companies involved in the same business

F-7

87
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

under the direction of common management. ATI was formed in September 1997 to
facilitate the Reorganization and consolidate the ownership of the Amkor
Companies. In connection with the Reorganization, AEI was merged into ATI. Amkor
International Holdings ("AIH"), a Cayman Islands holding company, became a
wholly owned subsidiary of ATI. AIH was formed to hold the following entities:
First Amkor Caymans, Inc. ("FACI"), which was formed to hold AAAP, AAP and its
subsidiary AMI, TLL and its subsidiary CIL and CIL's subsidiary AAES. The
relative number of shares of common stock issued by the Company in connection
with each of the transactions comprising the Reorganization was based upon the
relative amounts of stockholders' equity at December 31, 1997. On April 14,
1998, Mr. and Mrs. James Kim and the Kim Family Trusts received two-thirds
(9,746,760 shares) and one-third (4,873,380 shares) of the ATI common stock then
outstanding, respectively. On April 29, 1998, ATI issued 67,989,851 shares of
common stock, representing approximately 82% of its shares immediately after the
Reorganization, in exchange for all of the outstanding shares of AIH and its
subsidiaries. Of such shares, 27,528,234 shares and 36,376,617 shares were
gifted to Mr. and Mrs. James Kim and the Kim Family Trusts, respectively, such
that Mr. and Mrs. James Kim and the Kim Family Trusts owned 45.1% and 49.9%,
respectively, of the ATI common shares outstanding after the Reorganization.
Following such transactions the Founding Stockholders beneficially owned a
majority of the outstanding shares of ATI common stock. In addition, ATI
acquired all of the stock of AKI from the Kim Family Trusts for approximately
$3,000. The merger of AEI and ATI, the creation of AIH and FACI, the issuance of
ATI common stock for AIH and the acquisition of AKI are collectively referred to
as the Reorganization. (See "-- Income Taxes" regarding change in AEI tax
status.)

Nature of Operations

The Company provides semiconductor packaging and test services to
semiconductor and computer manufacturers located in strategic markets throughout
the world. Such services are provided by the Company and by ASI under a
long-standing arrangement. Approximately 79%, 72% and 68% of the Company's
packaging and test revenues in 1995, 1996 and 1997 respectively, relate to the
packaging and test services provided by ASI.

Concentrations of Credit Risk

Financial instruments, for which the Company is subject to credit risk,
consist principally of trade receivables. The Company has mitigated this risk by
selling primarily to well established companies, performing ongoing credit
evaluations and making frequent contact with customers.

At December 31, 1996 and 1997 and June 30, 1998, the Company maintained
$34,330, $53,071 and $61,192, respectively, in deposits at one U.S. financial
institution and $1,861, $2,548 and $9,768, respectively, in deposits at U.S.
banks which exceeded federally insured limits.

Additionally, at December 31, 1996 and 1997 and June 30, 1998, the Company
maintained deposits and certificates of deposits totaling approximately $14,649,
$34,622 and $71,569, respectively, at foreign owned banks.

Significant Customers

The Company has a number of major customers in North America, Asia and
Europe. The Company's largest customer, Intel Corporation, accounted for
approximately 13.3%, 23.5% and 23.4% of net revenues in 1995, 1996 and 1997,
respectively. The Company's five largest customers collectively accounted for
34.1%, 39.2% and 40.1% of net revenues in 1995, 1996 and 1997, respectively. The
Company anticipates that significant customer concentration will continue for
the foreseeable future, although the companies which constitute the Company's
largest customers may change.

F-8

88
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

Risks and Uncertainties

The Company's future results of operations involve a number of risks and
uncertainties. Factors that could affect the Company's future operating results
and cause actual results to vary materially from expectations include, but are
not limited to, dependence on the highly cyclical nature of both the
semiconductor and the personal computer industries, competitive pricing and
declines in average selling prices, dependence on the Company's relationship
with ASI (see Note 14), reliance on a small group of principal customers, timing
and volume of orders relative to the Company's production capacity, availability
of manufacturing capacity and fluctuations in manufacturing yields, availability
of financing, competition, dependence on international operations and sales,
dependence on raw material and equipment suppliers, exchange rate fluctuations,
dependence on key personnel, difficulties in managing growth, enforcement of
intellectual property rights, environmental regulations and fluctuations in
quarterly operating results.

Foreign Currency Translation

Substantially all of the Company's foreign subsidiaries use the U.S. dollar
as their functional currency. Accordingly, monetary assets and liabilities which
were originally denominated in a foreign currency are translated into U.S.
dollars at month-end exchange rates. Non-monetary items which were originally
denominated in foreign currencies are translated at historical rates. Gains and
losses from such transactions and from transactions denominated in foreign
currencies are included in other (income) expense, net. The cumulative
translation adjustment reflected in stockholders' equity in the consolidated
balance sheets relates primarily to investments in unconsolidated companies
which use the local currency as the functional currency (see Note 6).

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

Accounts Receivable

At December 31, 1997, trade accounts receivable represent the Company's
interest in receivables sold in excess of amounts purchased by banks under an
accounts receivable sale agreement (see Note 3). Of the total net trade accounts
receivable amount at December 31, 1997, $19,905 relates to the trade accounts
receivable of CIL which were not sold under the Agreement.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined
principally by using a moving average method.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is
calculated by the straight-line method over the estimated useful lives of
depreciable assets. Accelerated methods are used for tax purposes. Depreciable
lives follow:

Building and improvements.............................  10 to 30 years
Machinery and equipment...............................    3 to 5 years
Furniture, fixtures, and other equipment..............   3 to 10 years

Cost and accumulated depreciation for property retired or disposed of are
removed from the accounts and any resulting gain or loss is included in
earnings. Expenditures for maintenance and repairs are charged to expense as
incurred. Depreciation expense was $27,381, $58,497 and $81,159 for 1995, 1996
and 1997, respectively.

F-9

89
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

Other Noncurrent Assets

Other noncurrent assets consist principally of goodwill, deferred debt
issuance costs, security deposits, deferred income taxes and the cash surrender
value of life insurance policies.

The Company recorded goodwill representing the excess of cost over the book
value of minority interest in AAP (see Note 17). Goodwill is to be amortized on
a straight line basis over a period of ten years which is the estimated future
period to be benefited by the acquisition.

In connection with the $207,000 offering of Convertible Notes (see Note 2)
the Company incurred approximately $8,900 of debt issuance costs which have been
deferred and will be amortized and reflected as interest expense over the life
of the Convertible Notes.

Other Noncurrent Liabilities

Other noncurrent liabilities consist primarily of pension obligations and
noncurrent income taxes payable.

Stock Options

The Company accounts for stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees". Accordingly, compensation for stock options is generally measured as
the excess, if any, of the quoted market price of the Company's stock at the
date of the grant over the amount an employee must pay to acquire the stock. The
Company adopted the disclosure only requirements of Statement of Financial
Accounting Standards ("SFAS") No. 123.

Income Taxes

The Company accounts for income taxes following the provisions of SFAS No.
109, "Accounting for Income Taxes," which requires the use of the liability
method. If it is more likely than not that some portion or all of a deferred tax
asset will not be realized, a valuation allowance is provided.

The Company reports certain income and expense items for income tax
purposes on a basis different from that reflected in the accompanying
consolidated financial statements. The principal differences relate to the
timing of the recognition of accrued expenses which are not deductible for
federal income tax purposes until paid, the use of accelerated methods of
depreciation for income tax purposes and unrecognized foreign exchange gains and
losses.

AEI elected to be taxed as an S Corporation under the provisions of the
Internal Revenue Code of 1986 and comparable state tax provisions. As a result,
AEI did not recognize U.S. federal corporate income taxes. Instead, the
stockholders of AEI were taxed on their proportionate share of AEI's taxable
income. Accordingly, no provision for U.S. federal income taxes was recorded for
AEI. Given the Offerings (see Note 16), for informational purposes, the
accompanying consolidated statements of income include an unaudited pro forma
adjustment to reflect income taxes which would have been recorded if AEI had not
been an S Corporation, based on the tax laws in effect during the respective
periods (see "-- Reorganization").

Subsequent to March 31, 1998, AEI terminated its S Corporation Status.
Effective May 1, 1998, the profits of AEI will be subject to federal and state
income taxes at the corporate level.

Revenue Recognition and Risk of Loss

The Company records revenues upon shipment of packaged semiconductors to
its customers. The Company does not take ownership of customer-supplied
semiconductors. Title and risk of loss remains with the customer for these
materials at all times. Risk of loss for Amkor packaging costs passes upon
completion

F-10

90
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

of the packaging process and shipment to the customer. Accordingly, the cost of
the customer-supplied materials is not included in the consolidated financial
statements. In regards to wafer fabrication services, the Company generally
records revenues upon shipment of completed wafers to its customers.

Research and Development Costs

Research and development costs are charged to expense as incurred.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Standards

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS
No. 133 establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded on the balance sheet as either an asset or
liability measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that receive
hedge accounting.

SFAS No. 133 is effective for fiscal years beginning after June 15, 1999.
Early adoption at the beginning of any quarter after issuance is permitted, but
cannot be applied retroactively. The provisions of the statement must be applied
to derivative instruments and certain derivative instruments embedded in hybrid
contracts that were issued, acquired, or substantively modified after December
31, 1997.

The Company believes that the impact of adopting SFAS No. 133 on its
financial statements will not be material and has not determined the timing of
or method of adoption.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." This statement establishes standards for reporting and display of
income and its components in financial statements. The Company will be required
to adopt this statement in 1998.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." Under this statement, reporting
standards were established for the way that public business enterprises report
information about operating segments in annual financial statements and selected
information about operating segments in interim financial reports issued to
shareholders. Generally, financial information is required to be reported on the
basis that it is used internally for evaluating segment performance and deciding
how to allocate resources to segments. This statement is effective for financial
statements for periods beginning after December 15, 1997. In the initial year of
application, comparative information for earlier years presented is to be
restated. This statement need not be applied to interim financial statements in
the initial year of its application, but comparative information for interim
periods in the initial year of application is to be reported in financial
statements for interim periods in the second year of application. The Company
will adopt this statement prospectively for the year ended December 31, 1998.

F-11

91
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

Interim Financial Statements

The financial statements and related disclosures for the six months ended
June 30, 1997 and 1998 are unaudited and, in the opinion of management of the
Company, include all adjustments (consisting only of normal recurring
adjustments) necessary for the fair presentation of the results for the interim
period. The results of operations for the six months ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.

Reclassifications

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

2. INITIAL PUBLIC OFFERING

ATI filed an amended registration statement on April 29, 1998 with the
Securities and Exchange Commission. On May 6, 1998 ATI completed its Initial
Public Offering of 30,000,000 shares of its common stock at a price to the
public of $11.00 per share and $180,000 aggregate principal amount of
Convertible Notes ("Initial Public Offering"). Also on May 8, 1998, ATI sold
5,250,000 additional shares of its common stock and $27,000 additional principal
amounts of Convertible Notes in conjunction with the underwriters'
over-allotment options. The net proceeds were approximately $559,757, after
deducting the underwriter discounts and estimated offering expenses. The
convertible notes 1) are convertible into ATI common stock at $13.50 per share;
2) are callable in certain circumstances after three years; 3) are unsecured and
subordinate to senior debt; 4) carry a coupon rate of 5 3/4%; and 5) have a
maturity of five years. Approximately $264,000 of the proceeds were used to
reduce short-term and long-term borrowings. Approximately $86,000 of the
proceeds were used to reduce amounts due to AUSA. Approximately $34,000 of the
proceeds was used to purchase ASI's 40% interest in AAP. (See Note 17.) In
connection with the Offerings, one existing stockholder sold approximately
5,000,000 of his shares.

3. ACCOUNTS RECEIVABLE SALE AGREEMENT

Effective July 7, 1997, the Company entered into an agreement to sell
receivables (the "Agreement") with certain banks (the "Purchasers"). The
transaction qualifies as a sale under the provisions of SFAS No. 125 "Accounting
For Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." Under the Agreement, the Purchasers have committed to purchase,
with limited recourse, all right, title and interest in selected accounts
receivable of the Company, up to a maximum of $100,000. In connection with the
Agreement, the Company established a wholly owned, bankruptcy remote subsidiary,
Amkor Receivables Corp., to purchase accounts receivable at a discount from the
Company on a continuous basis, subject to certain limitations as described in
the Agreement. Amkor Receivables Corp. simultaneously sells the accounts
receivable at the same discount to the Purchasers. ASI has guaranteed ATI's
obligations under the Agreement (see Note 14). The Agreement is structured as a
three year facility subject to annual renewals based upon the mutual consent of
the Company and purchasers. The first such renewal date is June 18, 1998. The
Company and ASI did not comply with certain financial covenants under the
Agreement as of December 31, 1997. The Purchasers have agreed to waive
compliance with these covenants through January 2, 1999. The Company applied
approximately $83.4 million of the Receivables Sale proceeds together with
approximately $17 million of working capital to reduce the Company's
indebtedness to AUSA which amounts were advanced by AUSA to entities controlled
by members of James Kim's family.

Proceeds from the sale of receivables were $84,400 in 1997. Losses on
receivables sold under the Agreement were approximately $2,414 in 1997 and are
included in other expense, net. As of December 31, 1997, approximately $6,300 is
included in current liabilities for amounts to be refunded to the Purchasers as
a result of a reduction in selected accounts receivable.

F-12

92
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

4. INVENTORIES

Inventories consist of raw materials and purchased components which are
used in the semiconductor packaging process. The Company's inventories are
located at its facilities in the Philippines or at ASI on a consignment basis.
Components of inventories follow:

DECEMBER 31,
-------------------     JUNE 30,
1996       1997         1998
--------   --------    -----------
(UNAUDITED)

Raw materials and purchased
components.........................  $ 93,112   $105,748       85,837
Work-in-process......................     8,808     10,122        7,207
--------   --------     --------
$101,920   $115,870       93,044
========   ========     ========

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

DECEMBER 31,         JUNE 30,
-------------------    -----------
1996       1997         1998
--------   --------    -----------
(UNAUDITED)

Land.................................  $     --   $  2,346        2,346
Building and improvements............    81,602    109,528      124,405
Machinery and equipment..............   333,188    448,032      489,580
Furniture, fixtures and other
equipment..........................    31,330     33,050       35,762
Construction in progress.............     5,240     31,964       23,084
--------   --------     --------
451,360    624,920      675,177
Less -- Accumulated depreciation and
amortization.......................   126,465    197,859      252,644
--------   --------     --------
$324,895   $427,061      422,533
========   ========     ========

6. INVESTMENTS

The Company's investments include investments in affiliated companies which
provide services to the Company (see Note 14) and certain other technology based
companies. Investments are summarized as follows:

DECEMBER 31,
------------------
1996       1997
-------    -------

Equity Investment in ASI (10.2% and 8.1% at
December 31, 1996 and 1997, respectively)......  $31,154    $13,863
-------    -------
Other Equity Investments (20%-50% owned)
Anam Semiconductor & Technology Co., Ltd.......   10,700         --
Datacom International, Inc.....................    1,335         --
Sunrise Capital Fund...........................    1,328         --
Other..........................................    1,373        738
-------    -------
Total other equity investments.........   14,736        738
-------    -------
Available for Sale (cost based investments)......   23,354      5,220
-------    -------
$69,244    $19,821
=======    =======

The Company had net unamortized investment costs in excess of the
proportionate share of the investee companies' net assets of approximately
$1,284 and $0 at December 31, 1996 and 1997, respectively.

F-13

93
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

On August 1, 1997, the Company sold its equity investment in Anam
Semiconductor & Technology Co., Ltd. ("AST"), an affiliate of ASI, and certain
investments and notes receivable from companies unrelated to the semiconductor
packaging and test business to AK Investments, Inc., an entity owned by James J.
Kim, at cost ($49,740) and AK Investments, Inc. assumed $49,740 of the Company's
long-term borrowings from Anam USA, Inc. Management estimates that the fair
value of these investments and notes receivable approximated the carrying value
at August 1, 1997. Subsequent to the sale on August 1, 1997 the Company loaned
AK Investments, Inc. $12,800 for the purchase of additional investments. The
amount outstanding on this loan at December 31, 1997 was $4,350.

The Company's investment in ASI is accounted for using the equity method of
accounting. Although the Company does not own in excess of 20% of the
outstanding common stock of ASI, the Company through its common ownership with
the Kim family and entities controlled by the Kim family owns 40.7% of the
outstanding common stock of ASI and may exercise a significant influence over
ASI. Accordingly the Company applies the equity method based on its ownership
interest. A significant portion of the shares owned by the Kim family are
leveraged and as a result of this, or for other reasons, the family's ownership
could be substantially reduced.

In 1997, the Company recognized a loss of $17,291, resulting principally
from the impairment of value of its investment in ASI as well as the current
year equity in income (loss) of ASI. The amount of the loss was determined based
upon the market value of the ASI shares on the Korean Stock Exchange on February
16, 1998, the date that the Company sold its investment in ASI common stock to
AK Investments, Inc. In exchange for the shares, AK Investments, Inc. assumed
$13,863 of the Company's long-term borrowings from Anam USA, Inc.

The Company is advised that ASI, as a public company in Korea, has
published its most recent consolidated financial statements as of December 31,
1997.

The Korean economy is undergoing changes as evidenced by the agreement
between the Korean government and the International Monetary Fund. Among other
things, this agreement includes a restructuring plan of the banking industry as
a whole which will most likely have a material effect on ASI's operations. The
overall impact of these economic changes on ASI is uncertain at this time. ASI's
independent auditors' report indicates that the financial statements of ASI have
been prepared assuming that ASI will continue as a going concern. The operations
of ASI have been significantly affected, and will continue to be affected for
the foreseeable future, by Korea's unstable economy caused by currency
volatility and unstable finance markets in Korea. ASI has traditionally operated
with a significant amount of debt relative to its equity and has a significant
working capital deficit at December 31, 1997. Because of Korea's unstable
economy and ASI's dependence on debt financing, the report indicates that there
are significant uncertainties that may affect ASI's future operations and its
abilities to maintain or refinance certain debt obligations as they mature,
which raise substantial doubt regarding ASI's ability to continue as a going
concern. The ultimate outcome of these uncertainties cannot be determined
presently and ASI's financial statements do not include any adjustments that
might result from these uncertainties. ASI's plans to address these matters are
included in the notes to the ASI's financial statements.

ASI's financial statements are prepared on the basis of Korean GAAP, which
differs from U.S. GAAP in certain significant respects. The Company's equity in
income (loss) of ASI is based upon the Korean GAAP information noted above and
the Company's estimate of significant U.S. GAAP adjustments. These adjustments
were not significant in 1995 and 1996. In 1997, ASI recognized a W349 billion
loss principally as a result of foreign exchange losses on U.S. dollar
denominated liabilities due to the significant depreciation of the won relative
to the U.S. dollar. For purposes of determining the Company's equity in income
(loss) of ASI under U.S. GAAP, losses on remeasuring U.S. dollar denominated
liabilities are not recognized as the U.S. dollar is the functional currency for
ASI. Such U.S. dollar denominated liabilities were W2,144 billion at

F-14

94
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

December 31, 1997. Also, at December 31, 1997, the carrying value of the
investment in ASI, adjusted for the loss on the 1998 disposition discussed
above, is less than the Company's portion of ASI's net assets after
consideration of the estimated U.S. GAAP adjustments. The most significant such
adjustment affecting net assets is the remeasurement of property, plant and
equipment to historical costs as required as the U.S. dollar is the functional
currency.

The following summary of consolidated financial information pertaining to
ASI was derived from the consolidated financial statements referred to above.
All amounts are in millions of Korean Won:

1995         1996          1997
----------   ----------    ----------

SUMMARY INCOME STATEMENT INFORMATION:
Sales........................................  W1,105,273   W1,338,718    W1,786,457
Net income (loss)............................      18,333       (9,385)     (348,729)
SUMMARY BALANCE SHEET INFORMATION:
Total assets.................................                2,225,288     3,936,030
Total liabilities............................                1,975,431     3,834,096

7. SHORT-TERM CREDIT FACILITIES

At December 31, 1996 and 1997, short-term borrowings consisted of various
operating lines of credit and working capital facilities maintained by the
Company. These borrowings are secured by receivables, inventories or property.
These facilities, which are typically for one-year renewable terms, generally
bear interest at current market rates appropriate for the country in which the
borrowing is made (ranging from 7.2% to 13.0% at December 31, 1997). For 1996
and 1997, the weighted average interest rate on these borrowings was 7.8% and
8.6%, respectively. Included in cash and cash equivalents is $1,200 of
certificates of deposit pledged as collateral for certain of these lines. The
unused portion of lines of credit total $36,169 at December 31, 1997.

F-15

95
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

8. DEBT

Following is a summary of the Company's short-term borrowings and long-term
debt:

DECEMBER 31,
----------------------
1996         1997
---------    ---------

Short-term borrowings (see Note 7)..........................  $ 150,513    $ 187,659
Bank loan, interest at LIBOR plus annual spread (6.78% at
December 31, 1997), due October, 2000.....................     50,000       50,000
Bank loan, interest at LIBOR plus annual spread (6.68% at
December 31, 1997), due in installments beginning March,
1998 through April, 2001..................................     71,250       71,250
Floating rate notes (FRNs), interest at LIBOR plus annual
spread (7.38% at August 20, 1997, date of redemption).....     40,000           --
Bank debt, interest at LIBOR plus annual spread (9.37% at
December 31, 1997), due December, 2001....................     20,000       20,000
Bank debt, interest at LIBOR plus annual spread (12.22% at
December 31, 1997,) due October, 1998.....................      5,000        5,000
Bank debt, interest at LIBOR plus annual spread (9.09% at
December 31, 1997), due in installments with balance due
September, 1999...........................................      4,000        3,500
Bank debt, interest at LIBOR plus annual spread (11.88% at
December 31, 1997), due in equal installments through
January, 2001.............................................      5,926        5,502
Note payable, interest at prime (8.50% at December 31,
1997), due in semiannual installments beginning November
1999 through April, 2004..................................         --        9,530
Note payable, interest at LIBOR plus annual spread (12.48%
at December 31, 1997), due in installments with balance
due November, 1999........................................     11,000        9,000
Other, primarily capital lease obligations and other debt...      1,568        2,810
---------    ---------
359,257      364,251
Less -- Short-term borrowings and current portion of
long-term debt............................................   (191,813)    (167,317)
---------    ---------
$ 167,444    $ 196,934
=========    =========

The Bank loans were obtained to finance the expansion of the Company's
factories in the Philippines. The Company has the option to prepay all or part
of the loans on any interest payment date. These Bank loans are unconditionally
and irrevocably guaranteed by ASI. The Bank loans contain provisions pertaining
to the maintenance of specified debt-to-equity ratios, restrictions with respect
to corporate reorganization, acquisition of capital stock or substantially all
of the assets of any other corporations and advances and dispositions of all or
a substantial portion of the borrower's assets, except in the ordinary course of
business. AAP was not in compliance with covenants regarding the maintenance of
certain debt-to-equity ratios and advances to affiliates. As a result of the
receipt of the net proceeds from the Initial Public Offering (see Note 2),
amounts due under these agreements and certain other agreements with
cross-default clauses were classified as non-current liabilities at December 31,
1997 in the accompanying consolidated balance sheet.

Other bank debt instruments have interest rates based on Singapore
interbank rates and LIBOR plus an annual spread. The loans are secured by assets
of the Company and assets acquired through proceeds from the loans.

F-16

96
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

Principal payments required under long-term debt borrowings at December 31,
1997 are as follows:

AMOUNT
--------

1998..............................................  $138,309
1999..............................................     9,153
2000..............................................     2,360
2001..............................................    22,003
2002..............................................     1,905
Thereafter........................................     2,862
--------
Total.............................................  $176,592
========

9. EMPLOYEE BENEFIT PLANS

U.S. Pension Plans

ATI has a defined contribution benefit plan covering substantially all U.S.
employees under which ATI matches 75% of the employee's contributions of between
6% and 10% of salary, up to a defined maximum on an annual basis. The pension
expense for this plan was $483, $776 and $959 in 1995, 1996 and 1997,
respectively. The pension plan assets are invested primarily in equity and fixed
income securities.

Philippine Pension Plans

AAAP, AAP and AMI sponsor several defined benefit plans that cover
substantially all 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 the defined benefit plans
are as follows:

YEAR ENDED DECEMBER 31,
--------------------------
1995      1996      1997
------    ------    ------

Service cost of current period...................  $  974    $1,542    $1,274
Interest cost on projected benefit obligation....     811     1,228       957
Actual return on plan assets.....................    (609)     (677)     (585)
Net amortization and deferrals...................     100        98       132
------    ------    ------
Total pension expense..................  $1,276    $2,191    $1,778
======    ======    ======

It is the Company's policy to make contributions sufficient to meet the
minimum contributions required by law and regulation.

F-17

97
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

The following table sets forth the funded status and the amounts recognized
in the consolidated balance sheets for the defined benefit pension plans:

1996       1997
-------    -------

Actuarial present value of:
Vested benefit obligation..............................  $ 1,696    $ 1,546
=======    =======
Accumulated benefit obligation.........................  $ 2,848    $ 2,669
=======    =======
Actuarial present value of projected benefit
obligation.............................................  $12,699     10,428
Plan assets at fair value................................    6,077      6,614
-------    -------
Plan assets less than projected benefit obligation.......   (6,622)    (3,814)
Prior service cost.......................................    1,125        967
Unrecognized net loss....................................    1,800        953
-------    -------
Accrued pension cost.....................................  $(3,697)   $(1,894)
=======    =======

The weighted average interest rate used in determining the projected
benefit obligation was 12% as of December 31, 1996 and 1997. The rates of
increase in future compensation levels was 11% as of December 31, 1996 and 1997.
The expected long-term rate of return on plan assets was 12% as of December 31,
1996 and 1997.

10. INCOME TAXES

The provision for income taxes includes federal, state and foreign taxes
currently payable and those deferred because of temporary differences between
the financial statement and the tax bases of assets and liabilities. The
components of the provision for income taxes follow:

FOR THE YEAR ENDED DECEMBER 31,
---------------------------------
1995        1996        1997
--------    --------    ---------

Current:
Federal.......................................   $6,125      $5,880      $16,126
State.........................................      908          60        2,639
Foreign.......................................      498       2,260           28
------      ------      -------
7,531       8,200       18,793
------      ------      -------
Deferred:
Federal.......................................     (173)       (226)      (4,991)
Foreign.......................................     (974)        (98)      (6,724)
------      ------      -------
(1,147)       (324)     (11,715)
------      ------      -------
Total provision.......................   $6,384      $7,876      $ 7,078
======      ======      =======

F-18

98
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

The reconciliation between the tax payable based upon the U.S. federal
statutory income tax rate and the recorded provision follow:

FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
1995       1996        1997
--------    -------    --------

Federal statutory rate......................  $ 23,458    $15,054    $ 21,352
State taxes, net of federal benefit.........       908         60       1,285
S Corp. status of AEI.......................   (10,400)    (2,900)     (3,613)
(Income) losses of foreign subsidiaries
subject to tax holiday....................        --      4,957      (5,106)
Foreign exchange losses recognized for
income taxes..............................    (1,649)        --     (21,147)
Valuation allowance.........................                           22,000
Difference in rates on foreign
subsidiaries..............................    (5,933)    (9,295)     (7,693)
--------    -------    --------
Total.............................  $  6,384    $ 7,876    $  7,078
========    =======    ========

The Company has structured its global operations to take advantage of lower
tax rates in certain countries and tax incentives extended to encourage
investment. AAP had a tax holiday in the Philippines which expired in 1995. AAAP
has a tax holiday in the Philippines which expires at the end of 2002. Foreign
exchange losses recognized for income taxes relate to unrecognized net foreign
exchange losses on U.S. dollar denominated monetary assets and liabilities.
These losses, which are not recognized for financial reporting purposes as the
U.S. dollar is the functional currency (see Note 1), result in deferred tax
assets that will be realized, for Philippine tax reporting purposes, upon
settlement of the related asset or liability. The deferred tax asset related to
these losses increased in 1997 as a result of the dramatic devaluation of the
Philippine peso relative to the U.S. dollar. The Company's ability to utilize
these assets depends on the timing of the settlement of the related assets or
liabilities and the amount of taxable income recognized within the Philippine
statutory carryforward limit of three years. Accordingly, a valuation allowance
has been established in 1997 for a portion of the related deferred tax assets.

The following is a summary of the significant components of the Company's
deferred tax assets and liabilities:

DECEMBER 31,
------------------
1996       1997
------    --------

Deferred tax assets (liabilities):
Retirement benefits....................................  $  888    $    816
Receivables............................................     344         227
Inventories............................................   1,057       6,509
Unrealized foreign exchange losses.....................     398      37,447
Unrealized foreign exchange gains......................    (614)     (9,084)
Other..................................................     225          98
------    --------
Net deferred tax asset.................................   2,298      36,013
Valuation allowance....................................      --     (22,000)
------    --------
Net deferred tax asset.................................  $2,298    $ 14,013
======    ========

Non-U.S. income before taxes and minority interest of the Company was
$23,800, $20,420 and $32,920 in 1995, 1996 and 1997, respectively.

F-19

99
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

At December 31, 1996 and 1997 current deferred tax assets of $1,919 and
$13,439, respectively, are included in other current assets and noncurrent
deferred tax assets of $379 and $574, respectively, are included in other assets
in the consolidated balance sheet. The Company's net deferred tax assets include
amounts which management believes are realizable through future taxable income.

The Company's tax returns have been examined through 1993 in the
Philippines and through 1994 in the U.S. The recorded provision for open years
is subject to changes upon final examination of these tax returns. Changes in
the mix of income from the Company's foreign subsidiaries, expiration of tax
holidays and changes in tax laws or regulations could result in increased
effective tax rates for the Company.

At December 31, 1997, the financial reporting basis of AEI's net assets
were greater than the tax basis of the net assets by approximately $5,200. In
connection with the Initial Public Offering, the Company and the stockholders of
AEI entered into a Tax Indemnification Agreement providing that the Company and
AEI will be indemnified by such stockholders, with respect to their
proportionate share of any federal or state corporate income taxes attributable
to the failure of AEI to qualify as an S Corporation for any period or in any
jurisdiction for which S Corporation status was claimed through the date AEI
terminated its S Corporation status. The Tax Indemnification Agreement will also
provide that the Company and AEI will indemnify the stockholders if such
stockholders are required to include in income additional amounts attributable
to taxable years on or before the date AEI terminated its S Corporation status
as to which AEI filed or files tax returns claiming status as an S Corporation.

11. STOCKHOLDERS' EQUITY

The common stock and additional paid-in-capital of the Company are
reflected at the original cost of the Amkor Companies. In connection with the
Reorganization, the Company authorized 500,000,000 shares of $.001 par value
common stock, of which 82,610,000 shares were issued to the stockholders of the
Amkor Companies in exchange for their interests in these Companies.

At the date of the Reorganization (see Note 1), consolidated retained
earnings included $3,243 related to AKI. This amount is reflected as a reduction
in retained earnings in 1998 as a result of the purchase of AKI by ATI.

In addition, the Company authorized 10,000,000 shares of $.001 par value
preferred stock, designated as Series A.

Changes in the division equity account reflected in the consolidated
statement of stockholders' equity represent the net cash flows resulting from
the operations of the Chamterry semiconductor packaging and test business for
the periods indicated. Such cash flows have been presented as distributions or
capital contributions since these amounts were retained in Chamterry
Enterprises, Ltd. for the benefit of the owners.

12. EARNINGS PER SHARE

The pro forma net income per common share was calculated by dividing the
pro forma net income by the weighted average number of shares outstanding for
the respective periods, adjusted for the effect of the Reorganization (see Note
1) and the Initial Public Offering (see Note 2).

In the fourth quarter of 1997, the Company adopted SFAS No. 128, "Earnings
Per Share," which requires dual presentation of basic and diluted earnings per
share on the face of the income statement. Basic EPS is computed using only the
weighted average number of common shares outstanding for the period while
diluted EPS is computed assuming conversion of all dilutive securities, such as
options. In accordance with the statement, all prior period per share amounts
have been revised to reflect the new presentation. There have

F-20

100
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

been no changes to historical per share amounts. The Company's basic and diluted
per share amounts are the same for all periods presented except for the six
months ended June 30, 1998 which are calculated as follows:

WEIGHTED
EARNINGS       AVG. SHARES     PER SHARE
(NUMERATOR)    (DENOMINATOR)     AMOUNT
-----------    -------------    ---------

SIX MONTHS ENDED JUNE 30, 1998
Basic earnings per share.............................    30,431          94,323          $0.32
Convertible Notes....................................     1,193           5,196
------          ------          -----
Dilutive effect of options...........................        --              --
------          ------          -----
Diluted earnings per share...........................    31,624          99,519          $0.32
======          ======          =====

Stock options to purchase approximately 3 million shares of Common Stock at
$11.00 per share were outstanding subsequent to the Initial Public Offering, but
are excluded from the computation of diluted earnings per share as the average
market price was below the options exercise price.

13. STOCK OPTIONS (UNAUDITED)

1998 Director Option Plan. The Company's 1998 Director Option Plan (the
"Director Plan") was adopted by the Board of Directors in January 1998 and was
approved by the Company's stockholders in April 1998. A total of 300,000 shares
of Common Stock have been reserved for issuance under the Director Plan. The
option grants under the Director Plan are automatic and non-discretionary.
Generally, the Director Plan provides for an initial grant of options to
purchase 15,000 shares of Common Stock to each new nonemployee director of the
Company (an "Outside Director") when such individual becomes an Outside
Director. In addition, each Outside Director will automatically be granted
subsequent options to purchase 5,000 shares of Common Stock on each date on
which such Outside Director is re-elected by the stockholders of the Company,
provided that as of such date such Outside Director has served on the Board of
Directors for at least six months. The exercise price of the options is 100% of
the fair market value of the Common Stock on the grant date, except that with
respect to initial grants to directors on the effective date of the Director
Plan the exercise price was equal to 94% of the Initial Public Offering price
per share of Common Stock in the Initial Public Offering. The term of each
option is ten years and each option granted to an Outside Director vests over a
three year period. The Director Plan will terminate in January 2008 unless
sooner terminated by the Board of Directors. As of June 30, 1998, there are
30,000 options outstanding under the Director Plan.

1998 Stock Plan. The Company's 1998 Stock Plan (the "1998 Plan") generally
provides for the grant to employees, directors and consultants of stock options
and stock purchase rights. The 1998 Plan was adopted by the Board of Directors
in January 1998 and was approved by the Company's stockholders in April 1998.
Unless terminated sooner, the 1998 Plan will terminate automatically in January
2008. The maximum aggregate number of shares which may be optioned and sold
under the 1998 Plan is 5,000,000 plus an annual increase to be added on each
anniversary date of the adoption of the 1998 Plan.

Unless determined otherwise by the Board of Directors or a committee
appointed by the Board of Directors (the "Committee"), options and stock
purchase rights granted under the 1998 Plan are not transferable by the
optionee. Generally, the exercise price of stock options granted under the 1998
Plan must be at least equal to the fair market value of the shares on the date
of grant. In general, the options granted will vest over a four year period and
the term of options granted under the 1998 Plan may not exceed ten years. As of
June 30, 1998, there are 3,070,300 options outstanding under the 1998 Plan.

1998 Stock Option Plan for French Employees. The 1998 Stock Option Plan for
French Employees (the "French Plan") was approved by the Board of Directors in
April 1998. Unless terminated sooner, the French Plan will continue in existence
for 5 years. The French Plan provides for the granting of options to employees

F-21

101
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

of AAES and AWFS, the Company's French subsidiaries (the "French Subsidiaries").
A total of 250,000 shares of Common Stock have been reserved for issuance under
the French Plan plus an annual increase to be added on each anniversary date of
the adoption of the French Plan. In general, stock options granted under the
French Plan vest over a four year period, the exercise price for each option
granted under the French Plan shall be 100% of the fair market value of the
shares of Common Stock on the date the option is granted and the maximum term of
the option must not exceed ten years. Shares subject to the options granted
under the French Plan may not be transferred, assigned or hypothecated in any
manner other than by will or the laws of descent or distribution before the date
which is five years after the date of grant. As of June 30, 1998, there are
68,200 options outstanding under the French Plan.

A summary of the status of the Company's stock option plans follows:

WEIGHTED AVERAGE
NUMBER       EXERCISE PRICE
OF SHARES       PER SHARE
---------    ----------------

Balance at January 1, 1998.......................         --             --
Granted........................................  3,175,900          10.99
Exercised......................................         --             --
Cancelled......................................      7,400          11.00
---------         ------
Balance at June 30, 1998.........................  3,168,500          10.99
---------         ------
Exercisable at June 30, 1998.....................         --             --
---------         ------

Significant option groups outstanding at June 30, 1998 and the related
weighted average exercise price and remaining contractual life information are
as follows:

OUTSTANDING          EXERCISABLE
------------------    ---------------     REMAINING
OPTIONS WITH EXERCISE PRICES OF         SHARES      PRICE    SHARES    PRICE    LIFE (YEARS)
-------------------------------        ---------    -----    ------    -----    ------------

$11.00.....................................  3,138,500    11.00       --     11.00        9.8
$10.34.....................................     30,000    10.34       --     10.34        9.8
---------              ----
Options outstanding at June 30, 1998.......  3,168,500                --
=========              ====

A Summary of the weighted average fair value of options at grant date
granted during the six months ended June 30, 1998 follows:

WEIGHTED AVERAGE    WEIGHTED AVERAGE
NUMBER       EXERCISE PRICE        GRANT DATE
OF SHARES       PER SHARE          FAIR VALUES
---------    ----------------    ----------------

Options whose exercise price equals market price
on grant date..................................  3,145,900          11.00              $4.74
---------         ------              -----
Options whose exercise price is less than the
market price on grant date.....................     30,000          10.34              $4.97
---------         ------              -----

In order to calculate the fair market value of stock options at date of
grant, the Company used the Black-Scholes option pricing model. The following
assumptions were used: expected option term of 4 years, stock price volatility
factor of 47% and dividend yield of 0%. Risk free interest rate of 5.38% was
used.

F-22

102
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

The Company accounts for stock option awards as prescribed by Accounting
Principles Board Opinion 25, "Accounting for Stock Issued to Employees," and its
related interpretations. Accordingly, no compensation cost has been recognized
in the Consolidated Statements of Income. Had the Company recorded compensation
expense for the fair value of the options granted, as provided by SFAS No. 123,
"Accounting for Stock-Based Compensation," the Company's net income and basic
and diluted earnings per share would have been reduced to the pro forma amounts
indicated below:

FOR THE YEAR ENDED          FOR THE SIX MONTHS
DECEMBER 31,               ENDED JUNE 30,
-----------------------------    -------------------
1995       1996       1997       1997        1998
-------    -------    -------    -------    --------

Net income --             As reported            $51,532    $30,022    $39,668    $1,178     $30,431
Pro forma               51,532     30,022     39,668     1,178      30,054
Earnings per share --
Basic                   As reported               0.62       0.36       0.48      0.01        0.32
Pro forma                 0.62       0.36       0.48      0.01        0.32
Diluted                 As reported               0.62       0.36       0.48      0.01        0.32
Pro forma              $  0.62    $  0.36    $  0.48    $ 0.01     $  0.31

14. RELATED-PARTY TRANSACTIONS

At December 31, 1997, the Company owned 8.1% of the outstanding stock of
ASI (see Note 6), and ASI owned 40% of AAP. On June 1, 1998 the Company
purchased ASI's interest in AAP for approximately $34,000 (see Note 17). In 1996
and 1997, approximately 72% and 68%, respectively, of the Company's net revenues
(see Note 1) were derived from services performed for the Company by ASI, a
Korean public company in which certain of the Company's principal stockholders
hold a minority interest. By the terms of a long-standing agreement, the Company
has been responsible for marketing and selling ASI's semiconductor packaging and
test services, except to customers in Korea and certain customers in Japan to
whom ASI has historically sold such services directly. The Company has worked
closely with ASI in developing new technologies and products. The Company has
recently entered into five-year supply agreements with ASI giving the Company
the first right to market and sell substantially all of ASI's packaging and test
services and the exclusive right to market and sell all of the wafer output of
ASI's new wafer foundry. The Company's business, financial condition and
operating results have been and will continue to be significantly dependent on
the ability of ASI to effectively provide the contracted services on a
cost-efficient and timely basis. The termination of the Company's relationship
with ASI for any reason, or any material adverse change in ASI's business
resulting from underutilization of its capacity, the level of its debt and its
guarantees of affiliate debt, labor disruptions, fluctuations in foreign
exchange rates, changes in governmental policies, economic or political
conditions in Korea or any other change could have a material adverse effect on
the Company's business, financial condition and results of operations.

The Company previously has met a significant portion of its financing from
financing arrangements provided by Anam USA, Inc. ("AUSA"), ASI's wholly-owned
financing subsidiary. A majority of the amount due to AUSA represented
outstanding amounts under financing obtained by AUSA for the benefit of the
Company with the balance representing payables to AUSA for packaging and service
charges paid to ASI. Based on guarantees provided by ASI, AUSA obtained for the
benefit of the Company a continuous series of short-term financing arrangements
which generally were less than six months in duration, and typically were less
than two months in duration. Because of the short-term nature of these loans,
the flows of cash to and from AUSA under this arrangement were significant.
Purchases from ASI through AUSA were $354,062, $460,282 and $527,858 for 1995,
1996 and 1997, respectively. Charges from AUSA for interest and bank charges
were $4,484, $7,074 and $6,002 for 1995, 1996 and 1997, respectively. Amounts
payable to ASI and AUSA were $252,221, and $156,350 at December 31, 1996 and
1997, respectively.

F-23

103
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

ASI's ability to continue to provide services to the Company will depend on
ASI's financial condition and performance. ASI currently has a significant
amount of debt relative to its equity, which debt the Company expects will
continue to increase in the foreseeable future. The Company is advised that ASI,
as a public company in Korea, has published its most recent annual consolidated
financial statements as of December 31, 1997. These consolidated financial
statements are prepared on the basis of Korean GAAP, which differs from U.S.
GAAP. U.S. GAAP financial statements are not available (See Note 6). As of
December 31, 1997, ASI, on a consolidated basis, had current liabilities of
approximately W2,124 billion, including approximately W1,721 billion of
short-term borrowings and approximately W121 billion of current maturities of
long-term debt, and had long-term liabilities of approximately W1,710 billion,
including approximately W737 billion of long-term debt and approximately W862
billion of long-term capital lease obligations. As of such date, the total
shareholders' equity of ASI amounted to approximately W77 billion. The
deterioration of the Korean economy in recent months and the resulting liquidity
crisis in Korea have led to sharply higher domestic interest rates and reduced
opportunities for refinancing or refunding maturing debts as financial
institutions in Korea, which are experiencing financial difficulties, are
increasingly looking to limit their lending, particularly to highly leveraged
companies, and to increase their reserves and provisions for non-performing
assets. Therefore, there can be no assurance that ASI will be able to refinance
its existing loans or obtain new loans, or continue to make required interest
and principal payments on such loans or otherwise comply with the terms of its
loan agreements. Any inability of ASI to obtain financing or generate cash flow
from operations sufficient to fund its capital expenditure, debt service and
repayment and other working capital and liquidity requirements could have a
material adverse effect on ASI's ability to continue to provide services and
otherwise fulfill its obligations to the Company. In addition, ASI has obtained
a significant amount of financing through arrangements obtained by AUSA. As an
overseas subsidiary of ASI, AUSA was formed with the approval of the Bank of
Korea. If the Bank of Korea were to withdraw such approval, or if AUSA otherwise
ceased operations for any reason, ASI would be required to meet their financing
needs through alternative arrangements.

As of December 31, 1997, ASI and its consolidated subsidiaries were
contingently liable under guarantees in respect of debt of its non-consolidated
subsidiaries and affiliates in the aggregate amount of approximately W857
billion. As of December 31, 1997, such guarantees included those in respect of
all of AUSA's debt totaling $319,200, $176,250 of the Company's debt to banks
and the Company's obligations under a receivables sales arrangement (see Note
3). Prior to the Initial Public Offering, the Company met a significant portion
of its financing needs through financing arrangements obtained by AUSA for the
benefit of the Company based on guarantees provided by ASI. The Company
currently does not depend on such financing arrangements. In addition, if any
relevant subsidiaries or affiliates of ASI were to fail to make interest or
principal payments or otherwise default under their debt obligations guaranteed
by ASI, ASI could be required under its guarantees to repay such debt, which
event could have a material adverse effect on its financial condition and
results of operations.

As previously discussed, the Company incurs charges from ASI for assembly
and test services performed on a monthly basis. Historically the Company has
paid ASI for these services on net 30-day terms. On July 21, 1998 the Company
entered into a prepayment agreement with ASI relating to assembly and test
services. In accordance with the agreement, the Company made a $50,000
non-interest bearing advance to ASI, representing approximately one month's
charges for assembly and test services. The Company will offset this advance
against billings by ASI for assembly and test services provided in the fourth
quarter of 1998. This amount will be reflected in the current portion of Due
from Affiliate.

In connection with its wafer foundry agreement with Texas Instruments, Inc.
(TI), the Company and TI agreed to revise certain payment and other terms
contained in the Master Purchase Agreement. As part of this agreement, TI agreed
to advance ATI $20,000 in June 1998 as a prepayment of wafer foundry services to
be provided in the fourth quarter of 1998. The Company has recorded this amount
in accrued expenses. The

F-24

104
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

Company in turn advanced these funds to ASI as a prepayment for foundry service
charges. The Company will offset the advance to ASI against billings by ASI in
the fourth quarter of 1998. This amount is reflected in the current portion of
Due from Affiliate.

To facilitate capacity expansion for new product lines, certain customers
advanced ATI funds to purchase certain equipment to fulfill such customers
forecasts. In certain cases, the customer has requested that the equipment be
installed in the ASI factories. In these cases, the Company receives funds from
the customer and advances the funds to ASI. ASI in turn purchases the necessary
equipment. ASI repays ATI through a reduction of the monthly processing charges
related to the customer product being assembled. ATI will reduce its obligation
to the customer through a reduction in the accounts receivable, due from the
customer, at the time services are billed. These amounts are reflected in
Accrued Expenses and current portion of Due from Affiliate. As of June 30, 1998
this amount was approximately $5,800.

The Company utilizes AST as a key supplier of leadframes. Historically, the
Company has paid AST for these services on net 30-day terms. Effective at the
end of July 1998, the Company changed its payment policy from net 30-days, to
paid-in advance. Accordingly the Company now pays for its materials before
shipment. This change in payment policy resulted in an advance to AST of
approximately $5,000 at the end of July 1998. This amount will be reflected in
the current portion of Due from Affiliate. Payments to AST were approximately
$16,400, $27,300 and $26,000 during 1995, 1996 and 1997, respectively.

Anam Engineering and Construction, an affiliate of ASI, built the packaging
facility for AAAP in the Philippines. Payments to Anam Engineering and
Construction were $22,167 and $3,844 in 1996 and 1997, respectively. Anam
Precision Equipment and Anam Instruments manufacture certain equipment used by
the Philippine operations. Payments to Anam Precision Equipment and Anam
Instruments were $6,652 and $4,211 in 1996 and 1997, respectively.

During 1996, the Company extended guarantees on behalf of an affiliate to
vendors used by this affiliate. Outstanding guarantees as of December 31, 1996
and 1997 were $25,100 and $24,655 respectively. Amounts guaranteed under this
agreement fluctuate due to the cyclical nature of the affiliate's retail
business. Balances guaranteed at December 31 are generally the largest.

The Company has executed a surety and guarantee agreement on behalf of an
affiliate. The Company has unconditionally guaranteed the affiliate's obligation
under a $17,000 line of credit and a $9,000 term loan note. As of December 31,
1997, there was $750 outstanding under the line of credit and $9,000 outstanding
under the term loan note. The Company has also unconditionally guaranteed
another affiliate's obligation under a $4,000 term loan agreement and a $1,000
line of credit. As of December 31, 1997, there was $3,800 outstanding under the
term loan and no amounts outstanding under the line of credit.

A principal stockholder of the Company has extended guarantees on behalf of
the Company in the amount of $87,000 at December 31, 1997. Also in 1997, a
company controlled by this stockholder purchased investments in the amount of
$49,740 (see Note 6).

The Company leases office space in West Chester, PA from certain
stockholders of the Company. The lease expires in 2006. The Company has the
option to extend the lease for an additional 10 years through 2016. On September
11, 1997, the office previously being leased in Chandler, Arizona was purchased
from certain stockholders of the Company. The total purchase price of the
building ($5,710) represents the carrying value to the stockholders. Amounts
paid for these leases in 1996 and 1997 were $1,343 and $1,458, respectively.

At December 31, 1996 and 1997, the Company had advances and notes
receivable from affiliates other than ASI and AUSA of $22,988 and $36,501,
respectively. Realization of these notes is dependent upon the ability of the
affiliates to repay the notes. In management's opinion, these receivables are
recorded at the net realizable value.

F-25

105
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of financial instruments has been determined by
the Company using available market information and appropriate methodologies;
however, considerable judgment is required in interpreting market data to
develop the estimates for fair value. Accordingly, these estimates are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange. Certain of these financial instruments are with major
financial institutions and expose the Company to market and credit risks and may
at times be concentrated with certain counterparties or groups of
counterparties. The creditworthiness of counterparties is continually reviewed,
and full performance is anticipated.

The methods and assumptions used to estimate the fair value of significant
classes of financial instruments is set forth below:

Available for sale investments. The fair value of these financial
instruments was estimated based on market quotes, recent offerings of similar
securities, current and projected financial performance of the company and net
asset positions.

Short-term borrowings. Short-term borrowings have variable rates that
reflect currently available terms and conditions for similar borrowings. The
carrying amount of this debt is a reasonable estimate of fair value.

Long-term debt and due to affiliates. Long-term debt and due to affiliates
have variable rates that reflect currently available terms and conditions for
similar debt. The carrying amount of this debt is a reasonable estimate of fair
value.

16. COMMITMENTS AND CONTINGENCIES

The Company is involved in various claims incidental to the conduct of its
business. Based on consultation with legal counsel, management does not believe
that any claims to which the Company is a party will have a material adverse
effect on the Company's financial condition or results of operations.

Future minimum lease payments under operating leases that have initial or
remaining noncancelable lease terms in excess of one year at December 31, 1997,
are:

1998...............................................  $ 7,805
1999...............................................    7,230
2000...............................................    6,463
2001...............................................    5,689
2002...............................................    2,338
Thereafter.........................................   36,404
-------
Total....................................  $65,929
=======

Rent expense amounted to $3,692, $5,520 and $6,709 for 1995, 1996 and 1997,
respectively.

The Company has various purchase commitments for materials, supplies and
capital equipment incidental to the ordinary conduct of business. As of December
31, 1997 the Company had commitments for capital equipment of approximately
$27,000. In the aggregate, such commitments are not at prices in excess of
current market.

17. ACQUISITIONS

On June 1, 1998, the Company purchased ASI's 40% interest in AAP for
$33,750. The acquisition was accounted for using the purchase method of
accounting which resulted in the elimination of the minority

F-26

106
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

interest liability reflected on the consolidated balance sheet and the recording
of approximately $23,910 of goodwill which is being amortized over 10 years.

On September 30, 1996, AEI and a principal stockholder each acquired 50% of
the outstanding common stock of Amkor Anam Test Services, Inc. (AATS), formerly
Navell Test Consultants, Inc., a provider of test engineering services for the
semiconductor industry located in San Jose, California, for approximately
$2,860. Subsequent to September 30, 1996, AEI purchased the 50% interest owned
by a principal stockholder at the stockholder's original cost. The acquisition
was accounted for using the purchase method of accounting and the results of
AATS' operations are included in the Company's consolidated statements of income
effective October 1, 1996. Accordingly, the total purchase price has been
allocated to the combined assets and liabilities based upon their estimated
respective fair values. This acquisition resulted in goodwill of approximately
$2,356, which is being amortized over 20 years.

F-27

107
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

18. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

The Company is primarily engaged in one industry segment, namely, the
packaging and testing of integrated circuits. Financial information, summarized
by geographic area, is as follows:

UNITED
STATES       EUROPE     PHILIPPINES    ELIMINATIONS     COMBINED
----------    --------    -----------    ------------    ----------

Year ended December 31, 1997:
Net revenues from unaffiliated
customers..................  $1,258,110    $197,651     $     --       $      --      $1,455,761
Net revenues from
affiliates.................          --          --      256,895        (256,895)             --
----------    --------     --------       ---------      ----------
Total net revenues............   1,258,110     197,651      256,895        (256,895)      1,455,761
Income before income taxes and
minority interest..........      28,086      23,522        9,398              --          61,006
Identifiable assets...........     352,503      21,873      506,397        (176,134)        704,639
Corporate assets..............                                                              146,299
----------
Total assets..........                                                           $  850,938
==========
Year ended December 31, 1996:
Net revenues from unaffiliated
customers..................  $1,013,182    $157,819     $     --       $      --      $1,171,001
Net revenues from
affiliates.................          --          --      198,637        (198,637)             --
----------    --------     --------       ---------      ----------
Total net revenues............   1,013,182     157,819      198,637        (198,637)      1,171,001
Income before income taxes and
minority interest..........      22,592      12,473        7,947              --          43,012
Identifiable assets...........     245,781      19,422      424,653         (91,552)        598,304
Corporate assets..............                                                              199,309
----------
Total assets..........                                                           $  797,613
==========
Year ended December 31, 1995:
Net revenues from unaffiliated
customers..................  $  792,285    $140,097     $     --       $      --      $  932,382
Net revenues from
affiliates.................          --          --      128,164        (128,164)             --
----------    --------     --------       ---------      ----------
Total net revenues............     792,285     140,097      128,164        (128,164)        932,382
Income before income taxes and
minority interest..........      43,223      13,019       10,781              --          67,023
Identifiable assets...........     235,707      18,699      270,185        (100,385)        424,206
Corporate assets..............                                                              211,662
----------
Total assets..........                                                           $  635,868
==========

Sales between affiliates are priced at customer selling price less material
costs provided by the segment, less a sales commission. Net revenues from
unaffiliated customers for the United States include $109,532, $160,507 and
$208,062 of revenues from unaffiliated foreign customers for 1995, 1996 and
1997, respectively. Identifiable assets are those assets that can be directly
associated with a particular geographic area. Corporate assets are those assets
which are not directly associated with a particular geographic area and consist
primarily of cash and cash equivalents, investments and advances or loans to
another geographic segment.

F-28

108
AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(U.S. DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

19. PRO FORMA ADJUSTMENTS (UNAUDITED)

Statement of Income

Pro forma adjustments are presented to reflect a provision for income taxes
as if AEI had not been an S Corporation for all of the periods presented. Pro
forma net income per common share is based on the weighted average number of
shares outstanding as if the Exchange had occurred at the beginning of the
period presented.

F-29

109

INDEPENDENT AUDITORS' REPORT

To the Shareholders and
Board of Directors
Anam Industrial Co., Ltd.

We have audited the consolidated balance sheets of Anam Industrial Co.,
Ltd. and its subsidiaries (the "Company") as of December 31, 1997 and 1996, and
the related consolidated statements of operations, capital surplus and retained
earnings (accumulated deficit), and cash flows for each of the three years in
the period ended December 31, 1997 (which financial statements are prepared
under generally accepted accounting principles in the Republic of Korea and are
not included in this Registration Statement). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
financial statements of Anam USA, Inc. ("Anam USA"), a wholly owned subsidiary,
and Anam Engineering and Construction Co., Ltd. ("Anam Construction"), a 59.6%
owned subsidiary, which statements reflect total assets of W913,721 million and
W660,729 million as of December 31, 1997 and 1996, respectively, and total net
income (loss) of W(10,011) million in 1997, W5,738 million in 1996 and W(2,925)
million in 1995. Additionally, we did not audit the financial statements of
Amkor/Anam Pilipinas, Inc. ("AAPI"), a 40% owned affiliate, the investment in
which is reflected in the accompanying financial statements using the equity
method of accounting. The Company's investment in AAPI was W38,612 million and
W19,077 million as of December 31, 1997 and 1996, respectively, and the equity
in its net income (loss) was W(44,491) million in 1997, W2,050 million in 1996
and W(1,570) million in 1995. The aforementioned financial statements were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for Anam USA, Anam
Construction and AAPI, is based solely on the reports of the other auditors. The
auditors of Anam Construction and AAPI expressed uncertainties in their audit
reports about the respective companies' ability to continue as a going concern.

We conducted our audits in accordance with generally accepted auditing
standards in the Republic of Korea, which are substantially the same as those
followed in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Anam Industrial Co., Ltd. and its
subsidiaries as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles
in the Republic of Korea.

As discussed in Note 2 to the financial statements, in accordance with
revised Financial Accounting Standards in the Republic of Korea effective in
1997 and 1996, respectively, the Company changed its method of accounting for
unrealized foreign currency translation gains or losses on long-term assets and
liabilities denominated in foreign currencies. In 1997, such gains or losses are
deferred and amortized over the lives or maturities of corresponding assets and
liabilities using the straight-line method. In 1996, such gains or losses had
been recorded as a capital adjustment to shareholders' equity. Prior to 1996,
such gains or losses had been recognized currently.

The financial statements referred to above have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the operations of the Company have been significantly
affected, and will continue to be affected for the foreseeable future, by
Korea's unstable economy caused by currency volatility and unstable finance
markets in Korea. The Company has traditionally operated with a significant
amount of debt relative to its equity and has a significant working capital
deficit at

F-30

110

December 31, 1997. Because of Korea's unstable economy and the Company's
dependence on debt financing, there are significant uncertainties that may
affect the Company's future operations and its ability to maintain or refinance
certain debt obligations as they mature, which raise substantial doubt regarding
the Company's ability to continue as a going concern. The ultimate outcome of
these uncertainties cannot be determined presently and the financial statements
do not include any adjustments that might result from these uncertainties.
Management's plans to address these matters are also included in Note 3.

SAMIL ACCOUNTING CORPORATION

Seoul, Korea
March 20, 1998

F-31

111

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Anam Engineering & Construction Co., Ltd.

We have audited the balance sheets of Anam Engineering & Construction Co.,
Ltd. (the Company) as of December 31, 1997, 1996 and 1995, and the related
statements of operations and accumulated deficit and cash flows for the years
then ended (not included in this Prospectus or elsewhere in this Registration
Statement). These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the Republic of Korea which are substantially the same as those
followed in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Anam Engineering &
Construction Co., Ltd. as of December 31, 1997, 1996 and 1995, and the results
of its operations and the changes in its accumulated deficit and its cash flows
for the years then ended, in conformity with generally accepted financial
accounting standards in the Republic of Korea.

The financial statements referred to above have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 20 to the
financial statements, the operations of the Company have been significantly
affected, and will continue to be affected for the foreseeable future, by
Korea's unstable economy caused by the currency volatility and unstable
financial markets in Korea. The Company has traditionally operated with a
significant amount of debt relative to its equity. Because of Korea's unstable
economy and the Company's dependence on debt financing, there are significant
uncertainties that may affect the Company's future operations and its abilities
to maintain or regarding the Company's ability to continue as a going concern.
The ultimate outcome of these uncertainties cannot be determined presently and
financial statements do not include adjustments that might result from these
uncertainties.

As discussed in Note 17 to the financial statements, the Company executed a
merger in which the operations of Hanyong Corporation were combined with the
Company as of July 31, 1997. This merger was accounted for as a transfer of
assets and liabilities under common control at historical costs in a manner
similar to a pooling of interest of U.S. GAAP reporting purposes.

As discussed in Note 14 to financial statements, the Company sells its
product to Anam Semiconductor Inc. (Anam Industrial Co., Ltd.) and other
affiliated companies. The amounts of sales are W244,013 million, W313,894
million and W47,109 million during the year ended December 31, 1997, 1996 and
1995, and balances of account receivable are W31,844 million, W53,816 million
and W79,316 million at December 31, 1997, 1996 and 1995 respectively and
balances of account payable are W4,834 million, W122 million and W403 million at
December 31 of 1997, 1996 and 1995, respectively.

The amounts expressed in U.S. Dollars, presented solely for the convenience
of the reader, have been translated on the basis set forth in Note 3 to
financial statements.

Chong Un & Company

Seoul, Korea
March 4, 1998

F-32

112

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Stockholders and the Board of Directors
Amkor/Anam Pilipinas, Inc.
NSC Compound, Km. 22 East Service Road
South Superhighway, Muntinlupa City

We have audited the accompanying consolidated balance sheets of Amkor/Anam
Pilipinas, Inc. and Subsidiary as of December 31, 1997 and December 29, 1996,
and the related consolidated statements of income and retained earnings
(deficit) and cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Amkor/Anam
Pilipinas, Inc. and Subsidiary as of December 31, 1997 and December 29, 1996,
and the results of their operations and their cash flows for the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles in the Philippines.

SyCip Gorres Velayo & Co

January 30, 1998 (except with respect to the Initial Public Offering discussed
in Note 1 which is dated May 8, 1998).
Makati City, Philippines

F-33

113

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Anam USA, Inc.
West Chester, Pennsylvania

We have audited the balance sheets of Anam USA, Inc. (a Pennsylvania
Corporation and a wholly-owned subsidiary of Anam Industrial Co., Ltd., Seoul,
ROK) as of December 31, 1997 and 1996 and the related statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Anam USA, Inc. as of
December 31, 1997 and 1996 and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

SIANA CARR & O'CONNOR, LLP

Paoli, Pennsylvania
February 13, 1998

F-34

114

- ------------------------------------------------------
- ------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR SALOMON SMITH BARNEY. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATES AS OF WHICH THE INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITATION.

------------------

TABLE OF CONTENTS

PAGE
----

Additional Information.................    2
Prospectus Summary.....................    3
Risk Factors...........................    7
Reorganization.........................   22
Relationship with ASI..................   24
Use of Proceeds........................   29
Dividend Policy........................   29
Capitalization.........................   30
Selected Financial Data................   31
Management's Discussion and Analysis of
Financial Condition and Results of
Operations...........................   33
Business...............................   46
Management.............................   61
Certain Transactions...................   68
Principal Stockholders.................   71
Description of Capital Stock...........   72
Shares Eligible for Future Sale........   74
Plan of Distribution...................   75
Legal Matters..........................    5
Experts................................   76
Glossary...............................   77
Index to Consolidated Financial
Statements...........................  F-1

------------------

- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------

COMMON STOCK
AMKOR
TECHNOLOGY, INC.

LOGO
------------

PROSPECTUS

AUGUST   , 1998

------------
- ------------------------------------------------------
- ------------------------------------------------------

115

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts, commissions and certain accountable expenses, payable by
the Company in connection with the sale of Common Stock being registered. All
amounts are estimates except the SEC registration fee and the Nasdaq listing
fee.

SEC Registration Fee........................................  $ 24,780
Printing Fees and Expenses..................................    20,000
Legal Fees and Expenses.....................................   100,000
Accounting Fees and Expenses................................   100,000
Miscellaneous...............................................    55,220
--------
Total.............................................  $300,000
========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law permits a corporation
to include in its charter documents, and in agreements between the corporation
and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by the current law.

The Company's Amended and Restated Certificate of Incorporation provides
for the indemnification of directors to the fullest extent permissible under
Delaware law.

The Company's Bylaws provide for the indemnification of officers, directors
and third parties acting on behalf of the Company if such person acted in good
faith and in a manner reasonably believed to be in and not opposed to the best
interest of the Company, and, with respect to any criminal action or proceeding,
the indemnified party had no reason to believe his conduct was unlawful.

The Company has entered into indemnification agreements with its directors
and executive officers, in addition to indemnification provided for in the
Company's Bylaws, and intends to enter into indemnification agreements with any
new directors and executive officers in the future.

The form of Underwriting Agreement entered into in connection with the
Company's Initial Public Offering provides for the indemnification of the
Company's directors and officers in certain circumstances as provided therein.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Prior to the Initial Public Offering, 82,610,000 shares of Common Stock
were issued to Mr. James Kim and members of his family in exchange for their
outstanding interests in the Amkor Companies. Such issuances were made pursuant
to an exemption from registration under Section 4(2) of the Securities Act of
1933, as amended. See "Reorganization" in Part I hereof. The recipients of
securities in each such transaction represented their intention to acquire the
securities for investment only and not with a view to or for sale in connection
with any distribution thereof and appropriate legends were affixed to the share
certificates issued in such transactions. All recipients had adequate access,
through their relationships with the Company, to information about the Company.

II-1

116

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) Exhibits

2.1   Amendment and Plan of Reorganization dated April 14, 1998
between Amkor Technology, Inc., Amkor Electronics, Inc.
("AEI") and the stockholders of AEI.**
2.2   Stock Purchase Agreement dated April 21, 1998 between
Guardian Assets, Inc. and the stockholders of AK Industries,
Inc.**
2.3   Agreement dated April 29, 1998 between Cotswold Investments,
Ltd., and Amkor Technology, Inc.**
2.4   Agreement dated April 29, 1998 between Turquoise
Investments, Ltd. and Amkor Technology, Inc.**
3.1   Certificate of Incorporation.**
3.2   Certificate of Correction to Certificate of Incorporation.
3.3   Restated Bylaws.
4.1   Specimen Common Stock Certificate.**
4.2   Form of Indenture.**
5.1   Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to the legality of the securities being
registered.*
10.1   Form of Indemnification Agreement for directors and
officers.**
10.2   1998 Stock Plan and form of agreement thereunder.**
10.3   Receivables Purchase Agreement between Amkor Electronics,
Inc. and Amkor Receivables Corp., dated June 20, 1997.**
10.4   Form of Tax Indemnification Agreement between Amkor
Technology, Inc., Amkor Electronics, Inc. and certain
stockholders of Amkor Technology, Inc.**
10.5   Bridge Loan Agreement between Amkor/Anam Pilipinas, Inc.,
Anam Industrial Co., Ltd. and the Korea Development Bank for
$55,000,000, dated July 1997.**
10.6   Loan Agreement between Amkor/Anam Pilipinas, Inc. and the
Korea Development Bank for $71,000,000, dated March 28,
1996.**
10.7   Loan Agreement between Amkor/Anam Pilipinas, Inc. and the
Korea Development Bank for $50,000,000, dated September 7,
1995.**
10.8   Commercial Office Lease between Chandler Corporate Center
Phase II, G.P. and Amkor Electronics, Inc., dated September
6, 1993.**
10.9   Commercial Office Lease between the 12/31/87 Trusts of Susan
Y., David D. and John T. Kim and Amkor Electronics, Inc.,
dated October 1, 1996.**
10.10  Commercial Office Lease between the 12/31/87 Trusts of Susan
Y., David D., and John T. Kim and Amkor Electronics, Inc.,
dated June 14, 1996.**
10.11  Contract of Lease between Corinthian Commercial Corporation
and Amkor/Anam Pilipinas Inc., dated October 1, 1990.**
10.12  Contract of Lease between Salcedo Sunvar Realty Corporation
and Automated Microelectronics, Inc., dated May 6, 1994.**
10.13  Lease Contract between AAP Realty Corporation and Amkor/Anam
Advanced Packaging, Inc., dated November 6, 1996.**
10.14  Immunity Agreement between Amkor Electronics, Inc. and
Motorola, Inc., dated June 30, 1993.+**
10.15  Assembly Agreement between Amkor Electronics, Inc. and Intel
Corporation, dated July 17, 1991.+**

II-2

117

10.16  1998 Director Option Plan and form of agreement
thereunder.**
10.17  1998 Employee Stock Purchase Plan.**
10.18  Performance Undertaking between Amkor Receivables Corp. and
Anam Industrial Co., Ltd., dated June 20, 1997.**
10.19  Packaging and Test Services Agreement by and among Amkor
Technology, Inc., Amkor Electronics, Inc., C.I.L. Limited,
Anam USA, Inc. and Anam Industrial Co., Ltd. dated January
1, 1998.**
10.20  Foundry Services Agreement by and among Amkor Electronics,
Inc., C.I.L. Limited, Anam Industries Co., Ltd. and Anam USA
dated as of January 1, 1998.**
10.21  Amendment to Technical Assistance Agreement dated as of
September 29, 1997 between Texas Instruments Incorporated
and Anam Industrial Co., Ltd. and related portions of
Technical Assistance Agreement dated as of January 28,
1997.+**
10.22  Form of Registration Rights Agreement between Amkor
Technology, Inc. and Smith Barney Inc. in consideration of
the Master Securities Loan Agreement.**
10.23  Manufacturing and Purchase Agreement between Texas
Instruments Incorporated, Anam Industrial Co., Ltd. and
Amkor Electronics, Inc., dated as of January 1, 1998.+**
10.24  1998 Stock Option Plan for French Employees.**
21.1   List of Subsidiaries of the Registrant.
23.1   Consent of Arthur Andersen LLP.
23.2   Consent of Counsel (included in Exhibit 5.1).*
23.3   Consent of Samil Accounting Corporation
23.4   Consent of Chong Un & Company
23.5   Consent of SyCip Gorres Velayo & Co
23.6   Consent of Siana Carr & O'Connor, LLP
24.1   Power of Attorney (included on Page II-5).
27.1   Financial Data Schedule.
99.1   Form of Securities Loan Agreement between Smith Barney Inc.
and James J. Kim and Agnes C. Kim.**
99.2   Form of Custodial Undertaking in connection with Securities
Loan Agreement by and among James J. Kim and Agnes C. Kim,
Smith Barney Inc. and the Chase Manhattan Bank.**

- ---------------

* Filed previously.

** Incorporated by reference to the Company's Registration Statement on Form S-1
filed October 6, 1997, as amended (File No. 333-37235).

+ Confidential Treatment requested as to certain portions of this exhibit.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 14 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the

II-3

118

successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, and will be governed by the
final adjudication of such issue.

The undersigned Registrant undertakes that: (1) for purposes of determining
any liability under the Securities Act of 1933, the information omitted from the
form of prospectus as filed as part of the registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was declared
effective, and (2) for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act.

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof;

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and

(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-4

119

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Post-Effective Amendment to the Registration
Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of West Chester, State of Pennsylvania, on the 25th
day of August 1998.

AMKOR TECHNOLOGY, INC.

By:       /s/ JAMES J. KIM

------------------------------------
James J. Kim
Chief Executive Officer and
Secretary

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints James J. Kim and Frank J. Marcucci
and each one of them, acting individually and without the other, as his or her
attorney-in-fact, each with full power of substitution, for him and her in any
and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments and registration statements filed
pursuant to Rule 462 and otherwise) with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-1 HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.

SIGNATURE                                      TITLE                       DATE
---------                                      -----                       ----

/s/ JAMES J. KIM                      Chief Executive Officer and         August 25, 1998
- ---------------------------------------------------      Chairman
James J. Kim

/s/ FRANK J. MARCUCCI                   Chief Financial Officer and         August 25, 1998
- ---------------------------------------------------      Secretary (Principal Financial
Frank J. Marcucci                       and Accounting Officer)

/s/ JOHN N. BORUCH                     President and Director              August 25, 1998
- ---------------------------------------------------
John N. Boruch

/s/ WINSTON J. CHURCHILL                  Director                            August 25, 1998
- ---------------------------------------------------
Winston J. Churchill

/s/ ROBERT E. DENHAM                    Director                            August 25, 1998
- ---------------------------------------------------
Robert E. Denham

Director
- ---------------------------------------------------
Thomas D. George

/s/ GREGORY K. HINCKLEY                  Director                            August 25, 1998
- ---------------------------------------------------
Gregory K. Hinckley

II-5

120

INDEX TO FINANCIAL STATEMENT SCHEDULES*

SEQUENTIALLY
SCHEDULE                                                                      NUMBERED
NUMBER                       DESCRIPTION OF SCHEDULES                          PAGE
- --------                      ------------------------                      ------------

Report of Independent Public Accountants....................        S-2
II       Valuation and Qualifying Accounts...........................        S-3

- ---------------

* All other schedules are omitted as the required information is inapplicable or
the information is presented in the financial statements or related notes.

S-1

121

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Amkor Technology, Inc.:

We have audited in accordance with generally accepted auditing standards,
the Consolidated Financial Statements of Amkor Technology, Inc. and its
subsidiaries (See Note 1 to the Consolidated Financial Statements) included in
this registration statement and have issued our report thereon dated February 3,
1998 (except with respect to the sale of the investment in Anam Semiconductor,
Inc. common stock discussed in Note 6, as to which the date is February 16,
1998, the Reorganization discussed in Note 1, as to which the date is April 29,
1998, and the Initial Public Offering discussed in Note 2, as to which the date
is May 8, 1998). Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed in the index
above is presented for the purpose of complying with the Securities and Exchange
Commissions rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Philadelphia, Pa.

February 3, 1998 (except with respect to the sale of the investment in Anam
Semiconductor, Inc. common stock discussed in Note 6, as to which the date is
February 16, 1998, the Reorganization discussed in Note 1, as to which the date
is April 29, 1998, and the Initial Public Offering discussed in Note 2, as to
which the date is May 8, 1998).

S-2

122

SCHEDULE II
AMKOR TECHNOLOGY, INC.

VALUATION AND QUALIFYING ACCOUNTS
(AMOUNTS IN THOUSANDS)

BALANCE AT    ADDITIONS                               BALANCE AT
BEGINNING     CHARGED TO                                 END
OF PERIOD      EXPENSE      WRITE-OFFS     OTHER      OF PERIOD
----------    ----------    ----------    --------    ----------

Year ended December 31, 1995:
Allowance for doubtful
accounts................    $      487    $      500    $      --     $     56    $    1,043
Year ended December 31, 1996:
Allowance for doubtful
accounts................    $    1,043    $      660    $    (564)    $     40    $    1,179
Year ended December 31, 1997:
Allowance for doubtful
accounts................    $    1,179    $    3,490    $    (435)          --    $    4,234

S-3

123

EXHIBIT INDEX

SEQUENTIALLY
EXHIBIT                                                                    NUMBERED
NUMBER                       DESCRIPTION OF DOCUMENT                         PAGE
-------    ------------------------------------------------------------  ------------

2.1   Amendment and Plan of Reorganization dated April 14, 1998
between Amkor Technology, Inc., Amkor Electronics, Inc.
("AEI") and the stockholders of AEI.**
2.2   Stock Purchase Agreement dated April 21, 1998 between
Guardian Assets, Inc. and the stockholders of AK Industries,
Inc.**
2.3   Agreement dated April 29, 1998 between Cotswold Investments,
Ltd., and Amkor Technology, Inc.**
2.4   Agreement dated April 29, 1998 between Turquoise
Investments, Ltd. and Amkor Technology, Inc.**
3.1   Certificate of Incorporation.**
3.2   Certificate of Correction to Certificate of Incorporation.
3.3   Restated Bylaws.
4.1   Specimen Common Stock Certificate.**
4.2   Form of Indenture.**
5.1   Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to the legality of the securities being
registered.*
10.1   Form of Indemnification Agreement for directors and
officers.**
10.2   1998 Stock Plan and form of agreement thereunder.**
10.3   Receivables Purchase Agreement between Amkor Electronics,
Inc. and Amkor Receivables Corp., dated June 20, 1997.**
10.4   Form of Tax Indemnification Agreement between Amkor
Technology, Inc., Amkor Electronics, Inc. and certain
stockholders of Amkor Technology, Inc.**
10.5   Bridge Loan Agreement between Amkor/Anam Pilipinas, Inc.,
Anam Industrial Co., Ltd. and the Korea Development Bank for
$55,000,000, dated July 1997.**
10.6   Loan Agreement between Amkor/Anam Pilipinas, Inc. and the
Korea Development Bank for $71,000,000, dated March 28,
1996.**
10.7   Loan Agreement between Amkor/Anam Pilipinas, Inc. and the
Korea Development Bank for $50,000,000, dated September 7,
1995.**
10.8   Commercial Office Lease between Chandler Corporate Center
Phase II, G.P. and Amkor Electronics, Inc., dated September
6, 1993.**
10.9   Commercial Office Lease between the 12/31/87 Trusts of Susan
Y., David D. and John T. Kim and Amkor Electronics, Inc.,
dated October 1, 1996.**
10.10  Commercial Office Lease between the 12/31/87 Trusts of Susan
Y., David D., and John T. Kim and Amkor Electronics, Inc.,
dated June 14, 1996.**
10.11  Contract of Lease between Corinthian Commercial Corporation
and Amkor/Anam Pilipinas Inc., dated October 1, 1990.**
10.12  Contract of Lease between Salcedo Sunvar Realty Corporation
and Automated Microelectronics, Inc., dated May 6, 1994.**
10.13  Lease Contract between AAP Realty Corporation and Amkor/Anam
Advanced Packaging, Inc., dated November 6, 1996.**

124

SEQUENTIALLY
EXHIBIT                                                                    NUMBERED
NUMBER                       DESCRIPTION OF DOCUMENT                         PAGE
-------    ------------------------------------------------------------  ------------

10.14  Immunity Agreement between Amkor Electronics, Inc. and
Motorola, Inc., dated June 30, 1993.+**
10.15  Assembly Agreement between Amkor Electronics, Inc. and Intel
Corporation, dated July 17, 1991.+**
10.16  1998 Director Option Plan and form of agreement
thereunder.**
10.17  1998 Employee Stock Purchase Plan.**
10.18  Performance Undertaking between Amkor Receivables Corp. and
Anam Industrial Co., Ltd., dated June 20, 1997.**
10.19  Packaging and Test Services Agreement by and among Amkor
Technology, Inc., Amkor Electronics, Inc., C.I.L. Limited,
Anam USA, Inc. and Anam Industrial Co., Ltd. dated January
1, 1998.**
10.20  Foundry Services Agreement by and among Amkor Electronics,
Inc., C.I.L. Limited, Anam Industries Co., Ltd. and Anam USA
dated as of January 1, 1998.**
10.21  Amendment to Technical Assistance Agreement dated as of
September 29, 1997 between Texas Instruments Incorporated
and Anam Industrial Co., Ltd. and related portions of
Technical Assistance Agreement dated as of January 28,
1997.+**
10.22  Form of Registration Rights Agreement between Amkor
Technology, Inc. and Smith Barney Inc. in consideration of
the Master Securities Loan Agreement.**
10.23  Manufacturing and Purchase Agreement between Texas
Instruments Incorporated, Anam Industrial Co., Ltd. and
Amkor Electronics, Inc., dated as of January 1, 1998.+**
10.24  1998 Stock Option Plan for French Employees.**
21.1   List of Subsidiaries of the Registrant.
23.1   Consent of Arthur Andersen LLP.
23.2   Consent of Counsel (included in Exhibit 5.1).*
23.3   Consent of Samil Accounting Corporation
23.4   Consent of Chong Un & Company
23.5   Consent of SyCip Gorres Velayo & Co
23.6   Consent of Siana Carr & O'Connor, LLP
24.1   Power of Attorney (included on Page II-5).
27.1   Financial Data Schedule.
99.1   Form of Securities Loan Agreement between Smith Barney Inc.
and James J. Kim and Agnes C. Kim.*
99.2   Form of Custodial Undertaking in connection with Securities
Loan Agreement by and among James J. Kim and Agnes C. Kim,
Smith Barney Inc. and the Chase Manhattan Bank.*

- ---------------

* Previously filed.

** Incorporated by reference to the Company's Registration Statement on Form S-1
filed October 6, 1997, as amended (File No. 333-37235).

+ Confidential Treatment requested as to certain portions of this exhibit.

1
EXHIBIT 3.2

CERTIFICATE OF CORRECTION
FILED TO CORRECT A CERTAIN ERROR
IN THE CERTIFICATE OF INCORPORATION
OF AMKOR TECHNOLOGY, INC.
FILED IN THE OFFICE
OF THE SECRETARY OF STATE OF DELAWARE
ON SEPTEMBER 26, 1997

Amkor Technology, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify:

1.   The name of the corporation is Amkor Technology, Inc.

2.   That the Certificate of Incorporation of Amkor Technology, Inc. was
filed with the Secretary of State of Delaware on September 26, 1997 and that
said Certificate requires correction as permitted by Section 103 of the General
Corporation Law of the State of Delaware.

3.   The inaccuracies or defects of said Certificate to be corrected are as
follows:

ARTICLE NINTH of said Certificate of Incorporation improperly stated,
in its entirety, the following:

"In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly
authorized to adopt, alter, amend or repeal the Bylaws of the
Corporation. The stockholders may adopt, alter, amend or repeal the
Bylaws of the Corporation upon an affirmative supermajority (2/3)
vote."

ARTICLE TWELFTH of said Certificate of Incorporation improperly
stated, in its entirety, the following:

"No action that is required or permitted to be taken by the
stockholders of the corporation at any annual or special meeting of
stockholders may be effected by written consent of stockholders in
lieu of a meeting of stockholders."

4.   The Certificate of Incorporation is corrected as follows:

ARTICLE NINTH of said Certificate of Amendment is corrected to read in
its entirety as follows:

2

"In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly
authorized to adopt, alter, amend or repeal the Bylaws of the
Corporation. The stockholders may adopt, alter, amend or repeal the
Bylaws of the Corporation upon an affirmative majority vote."

ARTICLE TWELFTH of said Certificate of Amendment is corrected to read in
its entirety as follows:

"Any action that is required or permitted to be taken by the
stockholders of the corporation at any annual or special meeting of
stockholders may be effected by written consent of stockholders in
lieu of a meeting of stockholders."

IN WITNESS WHEREOF, said Amkor Technology, Inc.has caused this Certificate
of Correction to be signed by James J. Kim, its Chief Executive Officer and
Chairman of the Board, this 20th day of August, 1998. 

AMKOR TECHNOLOGY, INC.

By: /s/ James J. Kim
--------------------------
James J. Kim
Chief Executive Officer and
Chairman of the Board

1
Exhibit 3.3

RESTATED BYLAWS

OF

AMKOR TECHNOLOGY, INC.

2

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      ADVANCE NOTICE OF DIRECTOR NOMINEES................................................................1
1.5      ADJOURNMENTS.......................................................................................1
1.6      QUORUM.............................................................................................2
1.7      ORGANIZATION.......................................................................................2
1.8      VOTING; PROXIES....................................................................................2
1.9      FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD............................................3
1.10     LIST OF STOCKHOLDERS ENTITLED TO VOTE..............................................................3

ARTICLE II  BOARD OF DIRECTORS........................................................................................4

2.1      NUMBER; QUALIFICATIONS.............................................................................4
2.2      ELECTION; RESIGNATION; REMOVAL; VACANCIES..........................................................4
2.3      REGULAR MEETINGS...................................................................................5
2.4      SPECIAL MEETINGS...................................................................................5
2.5      TELEPHONIC MEETINGS PERMITTED......................................................................5
2.6      QUORUM; VOTE REQUIRED FOR ACTION...................................................................5
2.7      ORGANIZATION.......................................................................................5
2.8      INFORMAL ACTION BY DIRECTORS.......................................................................5

ARTICLE III  COMMITTEES...............................................................................................6

3.1      COMMITTEES.........................................................................................6
3.2      COMMITTEE RULES....................................................................................6

ARTICLE IV  OFFICERS..................................................................................................6

4.1      EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES......6
4.2      POWERS AND DUTIES OF EXECUTIVE OFFICERS............................................................7

ARTICLE V  STOCK......................................................................................................7

5.1      CERTIFICATES.......................................................................................7
5.2      LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF NEW CERTIFICATES.........................7

i

3

TABLE OF CONTENTS 
(continued)

Page
----

ARTICLE VI  INDEMNIFICATION...........................................................................................7

6.1      THIRD PARTY ACTIONS................................................................................7
6.2      ACTIONS BY OR IN THE RIGHT OF THE CORPORATION......................................................8
6.3      SUCCESSFUL DEFENSE.................................................................................8
6.4      DETERMINATION OF CONDUCT...........................................................................8
6.5      PAYMENT OF EXPENSES IN ADVANCE.....................................................................9
6.6      INDEMNITY NOT EXCLUSIVE............................................................................9
6.7      INSURANCE INDEMNIFICATION..........................................................................9
6.8      THE CORPORATION....................................................................................9
6.9      EMPLOYEE BENEFIT PLANS.............................................................................9
6.10     INDEMNITY FUND....................................................................................10
6.11     INDEMNIFICATION OF OTHER PERSONS..................................................................10
6.12     SAVINGS CLAUSE....................................................................................10
6.13     CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES ......................................10

ARTICLE VII  MISCELLANEOUS ..........................................................................................11

7.1      FISCAL YEAR.......................................................................................11
7.2      SEAL..............................................................................................11
7.3      WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND COMMITTEES............................11
7.4      INTERESTED DIRECTORS; QUORUM......................................................................11
7.5      FORM OF RECORDS...................................................................................12
7.6      AMENDMENT OF BYLAWS...............................................................................12

ii

4

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.

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.

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, 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 nor more than sixty days before the
date of the meeting to each stockholder entitled to vote at such meeting. 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.

1.4  ADVANCE NOTICE OF DIRECTOR NOMINEES

To be properly brought before an annual meeting or special meeting,
nominations for the election of directors must be specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the board of
directors.

1.5  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 time and place thereof are announced at the
meeting at which the adjournment is taken. At the adjourned meeting the
corporation may transact any business which might have been transacted at the
original 

5

meeting. If the adjournment is for more than thirty 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.

1.6  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, adjourn the
meeting from time to time in the manner provided in Section 1.4 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.

1.7  ORGANIZATION

Meetings of stockholders 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 his absence by the President, or in his absence by a Vice President, or in
the absence of the foregoing persons by a chairman designated by the Board of
Directors, or in the absence of such designation 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.

1.8  VOTING; PROXIES

Except as otherwise provided by the Certificate of Incorporation, each
stockholder entitled to vote at any meeting of stockholders shall be entitled to
one vote for each share of stock held by him 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 him 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

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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.

1.9  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 nor
less than ten days before the date of such meeting; and (2) in the case of any
other action, shall not be more than sixty 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; and (2) 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.

1.10 LIST OF STOCKHOLDERS ENTITLED TO VOTE

The Secretary shall prepare and make, at least ten 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 days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
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. Upon the willful neglect or refusal of the directors to produce such a
list at any meeting for the election of directors, they shall be ineligible for
election to any office at such 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.

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1.11 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 General
Corporation Law of Delaware 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 General Corporation Law of Delaware.

ARTICLE II

BOARD OF DIRECTORS

2.1  NUMBER; QUALIFICATIONS

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.

2.2  ELECTION; RESIGNATION; REMOVAL; 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 for a term of one year or until his successor is
elected and qualified. 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 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.

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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 President, any
Vice President, the Secretary, 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.

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 his absence by the President, 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  INFORMAL ACTION BY DIRECTORS

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.

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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. In the absence of such rules each committee shall conduct its
business in the same manner as the Board of Directors conducts its business
pursuant to Article III of these Bylaws.

ARTICLE IV

OFFICERS

4.1  EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF OFFICE;
RESIGNATION; REMOVAL; VACANCIES

The Board of Directors shall elect a President and Secretary, and it may,
if it so determines, choose a Chairman of the Board and a Vice Chairman of the
Board from among its members. The Board of Directors may also choose one or more
Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more
Assistant Treasurers. 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.

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4.2  POWERS AND DUTIES OF EXECUTIVE OFFICERS

The officers of the corporation shall have such powers and duties in the
management of the corporation as may be prescribed by the Board of Directors
and, to the extent not so provided, as generally pertain to their respective
offices, subject to the control of the Board of Directors. The Board of
Directors may require any officer, agent or employee to give security for the
faithful performance of his duties.

ARTICLE V

STOCK

5.1  CERTIFICATES

Every holder of stock 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 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 

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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 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.

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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 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 

9

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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, 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 General Corporation Law of the State of Delaware or otherwise.
The corporation may, in its sole discretion, indemnify an employee, trustee or
other agent as permitted by the General Corporation Law of the State of
Delaware. 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.

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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.

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.

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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 altered or repealed, and new Bylaws made, by the Board
of Directors, but the stockholders may make additional Bylaws and may alter and
repeal any Bylaws whether adopted by them or otherwise. Any amendment to the
Bylaws made by the stockholders shall require a supermajority (66.6%)
affirmative vote to become effective.

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AMKOR TECHNOLOGY, INC.

ASSISTANT SECRETARY'S
CERTIFICATE OF RESTATED BYLAWS

The undersigned hereby certifies that he is the duly elected, qualified,
and acting Assistant Secretary of Amkor Technology, Inc. and that the foregoing
Restated Bylaws, comprising twelve (12) pages, were adopted as the Bylaws of the
corporation on September 26, 1997, by the person appointed in the Certificate of
Incorporation to act as the Incorporator of the corporation, and corrected by
the Certificate of Correction dated August 24, 1998.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the corporate seal this August 24, 1998.

/s/ Keven Heron
-------------------------------
Kevin Heron, Assistant Secretary

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Exhibit 21.1 Subsidiaries

AK Industries, Inc., a Texas corporation
Amkor Technology Inventory Co., a Texas corporation
Amkor International Holdings, Ltd., a Cayman Islands company
First Amkor Cayman Islands, Ltd., a Cayman Islands company
Amkor/Anam Advanced Packaging, Inc., a Philippines corporation ("P3")
Amkor/Anam Pilipinas, Inc., a Philippines corporation ("P1")
Automated Microelectronics Inc., a Philippines corporation ("P2")
T.L. Limited, a Cayman Islands company
C.I.L. Limited, a Cayman Islands company
Amkor/Anam EuroServices S.A.R.L., a French company
Amkor Wafer Fabrication Services, S.A.R.L., a French company
Amkor Receivables Corp., a Delaware corporation
Guardian Assets, Inc., a Delaware corporation

1

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports 
and to all references to our Firm included in or made a part of this
Post-Effective Amendment No. 2 to the Registration Statement (no. 333-49645) on
Form S-1. 

Arthur Andersen LLP
Philadelphia, Pa.
August 25, 1998

1
EXHIBIT 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the inclusion in this Post-Effective Amendment No. 2 to
the Registration Statement on Form S-1 (File No. 333-49645) of Amkor
Technology, Inc. of our report dated March 20, 1998 on our audits of the
financial statements of Anam Semiconductor, Inc. (formerly Anam Industrial Co.,
Ltd.) and its subsidiaries. We also consent to the references to our firm under
the caption "Experts".

/s/ Samil Accounting Corporation
- ---------------------------------
Samil Accounting Corporation

Seoul, Korea
August 7, 1998

1
EXHIBIT 23.4

[CHONG UN & COMPANY LETTERHEAD]

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of Post-Effective
Amendment No. 2 to the Amkor Technology, Inc. Registration Statement (No.
333-40645) on Form S-1.

/s/ Chong Un & Company
- ----------------------------
Chong Un & Company

Seoul, Korea
August 7, 1998

1
EXHIBIT 23.5

[SGV & CO. LETTERHEAD]

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of Post-Effective
Amendment No. 2 to the Amkor Technology, Inc. Registration Statement (no.
333-49645) on Form S-1.

/s/ SyCip Gorres Velayo & Co.
- --------------------------------
SyCip Gorres Velayo & Co.

Makati City, Philippines
August 7, 1998

1

EXHIBIT 23.6

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
Post-Effective Amendment No. 2 to the Registration Statement on Form S-1 (No.
333-49645) of Amkor Technology, Inc.

/s/ SIANA CARR & O'CONNOR, LLP
------------------------------
SIANA CARR & O'CONNOR, LLP

Paoli, Pennsylvania
August 26, 1998

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