1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 1997

REGISTRATION NO. 333-37235
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 2

TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

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

DELAWARE                              3674                            23-292-5614
(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.                                       ALAN L. BELLER, ESQ.
JOHN A. FORE, ESQ.                                          YONG G. LEE, ESQ.
BRUCE M. MCNAMARA, ESQ.                                CLEARY, GOTTLIEB, STEEN & HAMILTON
WILSON SONSINI GOODRICH & ROSATI                                   ONE LIBERTY PLAZA
PROFESSIONAL CORPORATION                                       NEW YORK, NY 10006
650 PAGE MILL ROAD                                            (212) 225-2000
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. [ ]

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

CALCULATION OF REGISTRATION FEE

==============================================================================================================
PROPOSED MAXIMUM
AGGREGATE OFFERING
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED           PRICE(1)(2)           AMOUNT OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value(3)....................         $402,500,000                   $121,970
- --------------------------------------------------------------------------------------------------------------
%     Convertible Subordinated Notes................         $172,500,000                   $50,888
==============================================================================================================

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

(1) Includes the aggregate value offered if the Underwriters exercise the
options to purchase shares of Common Stock and Convertble Notes to cover
over-allotments, if any.

(2) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(o) promulgated under the Securities Act of 1933, as
amended.

(3) Fee previously paid.

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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EXPLANATORY NOTE

This Registration Statement contains a Prospectus relating to an offering
in the United States and Canada of an aggregate of        shares of Common Stock
and $       aggregate principal amount of      % Subordinated Convertible Notes
due 2003 (the "Convertible Notes") of Amkor Technology, Inc. (the "U.S.
Offering"), together with separate Prospectus pages relating to a concurrent
offering outside the United States and Canada of an aggregate of        shares
of Common Stock and $       aggregate principal amount of the Convertible Notes
of Amkor Technology, Inc. (the "International Offering"), in each case excluding
shares issuable upon exercise of the Underwriters' over-allotment options. The
complete Prospectus for the U.S. Offering follows immediately. Following such
Prospectus are the following alternate pages from the Prospectus for the
International Offering: a front cover page, five pages comprising the
"Underwriting" section and a back cover page. All of the other pages of the
Prospectus for the U.S. Offering are to be used for both the U.S. Offering and
the International Offering.

If this Registration Statement becomes effective in accordance with Rule
430A under the Securities Act of 1933, as amended, the complete Prospectus for
each of the U.S. and International Offerings in the forms in which they are to
be used will be filed with the Securities and Exchange Commission pursuant to

Rule 424 under the Securities Act of 1933, as amended.

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SUBJECT TO COMPLETION, DATED DECEMBER 30, 1997

PROSPECTUS

SHARES

COMMON STOCK

LOGO                              $150,000,000

% CONVERTIBLE SUBORDINATED NOTES DUE 2003

AMKOR TECHNOLOGY, INC.

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

Amkor Technology, Inc. ("Amkor" or the "Company") hereby offers
shares of Common Stock, par value $.001 per share ("Common Stock"), and
$150,000,000 aggregate principal amount of     % Convertible Subordinated Notes
due 2003 (the "Convertible Notes"). In addition, certain stockholders of the
Company (the "Selling Stockholders") are hereby offering         shares of
Common Stock. The Convertible Notes will mature on           , 2003. Interest on
the Convertible Notes is payable on         and         of each year, commencing
, 1998. The Convertible Notes are convertible into shares of Common
Stock at any time on or before the close of business on the last trading day
prior to maturity, unless previously redeemed, at a conversion price of
$        per share, subject to adjustment in certain events as described herein.

The Convertible Notes are subordinated in right of payment to all existing
and future Senior Debt (as defined) of the Company and effectively subordinated
to all existing and future liabilities and obligations of the Company's
subsidiaries. As of           , 1997, the total principal amount of Senior Debt
of the Company would have been approximately $    million and other liabilities
and obligations of the Company's subsidiaries (excluding intercompany
indebtedness) that would have effectively ranked senior to the Convertible Notes
would have been approximately $    million. The Convertible Notes are not
redeemable by the Company prior to           , 2001. On or after           ,
2001, the Convertible Notes are redeemable, in whole or from time to time in
part, at the option of the Company, at the redemption prices set forth herein
plus accrued interest, if the closing price of the Common Stock is at least 125%
of the conversion price for at least 20 trading days within a period of 30
consecutive trading days ending on the fifth trading day prior to the notice of
redemption. No sinking fund is provided for the Convertible Notes. In addition,
following the occurrence of a Designated Event (i.e., a Change of Control or
Termination of Trading (each as defined)), each holder has the right to cause
the Company to purchase the Convertible Notes at 101% of their principal amount
together with accrued and unpaid interest. See "Description of Convertible
Notes."

Of the         shares of Common Stock (the "Shares") and $150,000,000
aggregate principal amount of Convertible Notes offered hereby,         Shares
and $        of Convertible Notes are being offered by the U.S. Underwriters (as
defined) in the United States and Canada (the "U.S. Offering") and
Shares and $        of Convertible Notes are being offered by the International
Underwriters (as defined) in a concurrent offering outside the United States and
Canada (the "International Offering" and, together with the U.S. Offering, the
"Offerings"), subject to transfers between the U.S. Underwriters and the
International Underwriters (collectively, the "Underwriters"). The Price to the
Public and Underwriting Discount per Share and per Convertible Note will be
identical for the U.S. Offering and the International Offering. See
"Underwriting." The closing of the U.S. Offering and International Offering are
conditioned upon each other. Following the Offerings, certain members of
management and their affiliates will beneficially own     % of the Company's
outstanding Common Stock. See "Principal and Selling Stockholders."

Prior to the Offerings, there has not been a public market for the Common
Stock or the Convertible Notes. It is currently estimated that the initial
public offering price of the Common Stock will be between $    and $    per
share. See "Underwriting" for information relating to the factors considered in
determining the initial public offering price. The Common Stock has been
approved for listing on the Nasdaq National Market under the symbol "AMKR",
subject to official notice of issuance. The Company intends to apply for
approval of quotation of the Convertible Notes on the Nasdaq Stock Market under
the symbol "AMKRG".

SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES AND THE
CONVERTIBLE NOTES.

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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.

==============================================================================================================================
UNDERWRITING                                 PROCEEDS TO
PRICE TO            DISCOUNTS AND          PROCEEDS TO           THE SELLING
THE PUBLIC          COMMISSIONS(1)        THE COMPANY(2)        STOCKHOLDERS(2)
- ------------------------------------------------------------------------------------------------------------------------------
Per Share.................................           $                     $                     $                     $
Per Convertible Note......................           $                     $                     $
Total Shares..............................           $                     $                     $                     $
Total Convertible Notes...................           $                     $                     $
Total(3)..................................           $                     $                     $                     $
==============================================================================================================================

(1) For information regarding indemnification of the Underwriters, see
"Underwriting."

(2) Before deducting expenses payable by the Company, estimated at $        .

(3) The Company has granted the U.S. Underwriters and the International
Underwriters 30-day options to purchase up to         and         additional
shares of Common Stock, respectively, and $        and $        additional
principal amount of Convertible Notes, respectively, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to the Public, Underwriting Discount and Proceeds to the Company will
be $        , $        and $        , respectively. See "Underwriting."

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

The Shares and the Convertible Notes are offered subject to receipt and
acceptance by the Underwriters, to prior sale and to the Underwriters' right to
reject any order in whole or in part and to withdraw, cancel or modify the offer
without notice. It is expected that delivery of the Shares and the Convertible
Notes will be made at the office of Smith Barney Inc., 333 West 34th Street, New
York, New York 10001 or through the facilities of The Depository Trust Company,
on or about             , 1998.

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

SALOMON SMITH BARNEY

BANCAMERICA ROBERTSON STEPHENS

COWEN & COMPANY

, 1998.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.

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[ARTWORK]

[Photograph of manufacturing facilities; pictures of products; and diagram
of wafer fabrication, packaging and test operations.]

PowerQuad(R) and SuperBGA(R) are registered trademarks of the Company and
ChipArray(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 OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES OFFERED
HEREBY, 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 AND THE IMPOSITION OF PENALTY BIDS.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

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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 provision of wafer fabrication services, the
Company's expected capacity utilization rates, the Company's anticipated
assumption of marketing rights in Japan, 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 September 30, 1997,
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.
This demand is expected to grow faster than that of the semiconductor industry
as a whole. According to industry estimates, independent packaging foundry
revenues are expected to grow at a compound annual rate of 20.3% over the next
five years from an estimated $5.0 billion in 1996 (32% of the world's IC
packaging needs) to $12.5 billion in 2001 (45% of the world's IC packaging
needs).

The Company provides packaging and test services through its three
factories in the Philippines as well as four factories of Anam Industrial Co.,
Ltd. ("AICL") in Korea pursuant to a supply agreement between the Company and
AICL. The Company and AICL have had a long-standing relationship. In 1996 and
the nine months ended September 30, 1997, approximately 72% and 68%,
respectively, of the Company's revenues were derived from sales of services
performed for the Company by AICL. In addition, substantially all of the
revenues of AICL in 1996 and the nine months ended September 30, 1997 were
derived from services sold by the Company. The Company expects that the
businesses of the Company and AICL 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.

In the first half of 1998, the Company is scheduled to begin offering wafer
fabrication services through AICL's new deep submicron CMOS foundry. The Company
expects that this foundry will be capable of producing up to 25,000 8" wafers
per month by the end of 1998. Through a strategic relationship with TI, the
Company and AICL are currently qualifying .25 micron CMOS process technology,
and AICL is negotiating

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6

with TI to obtain the technology necessary to migrate to .18 micron CMOS process
technology during 1998. AICL'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
will enable the Company to become one of the first providers of a fully
integrated, turnkey semiconductor fabrication, packaging and test service
solution.

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 under common control
and 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.

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THE COMMON STOCK OFFERINGS

Common Stock offered by the Company
U.S. Offering....................................  shares
International Offering...........................  shares
-----------------
Total....................................  shares
Common Stock offered by Selling Stockholders
U.S. Offering....................................  shares
International Offering...........................  shares
-----------------
Total....................................  shares
Common Stock to be outstanding after the
Offerings(1).....................................  shares
Proposed Nasdaq National Market symbol.............  "AMKR"

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

(1) Excludes         shares of Common Stock issuable upon exercise of options to
be granted prior to the Offerings under the Company's 1998 Stock Plan at a
price per share equal to the initial public offering price. Also excludes an
aggregate of         shares reserved for future issuance upon conversion of
the Convertible Notes,         shares reserved for issuance upon conversion
of the Company's outstanding shares of Non-Voting Series A Preferred Stock
(the "Series A Preferred") and         additional shares reserved for future
issuance under the Company's 1998 Stock Plan, 1998 Director Option Plan and
1998 Employee Stock Purchase Plan. See "Management" and "Description of
Capital Stock" and Notes 1 and 16 of Notes to Consolidated Financial
Statements.

THE CONVERTIBLE NOTES OFFERINGS

Convertible Notes Offered by the Company

U.S. Offering............  $          aggregate principal amount

International Offering...  $          aggregate principal amount

Total............  $          aggregate principal amount

Maturity...................  The Convertible Notes will mature on             ,
2003 unless earlier redeemed or converted.

Payment of Interest........  Interest on the Convertible Notes at the rate
of     % per annum is payable semi-annually on
and           of each year, commencing
, 1998.

Conversion Rights..........  The Convertible Notes are convertible into Common
Stock of the Company at the option of the holder at
any time on or before the close of business on the
last trading day prior to maturity, unless
previously redeemed, at a conversion price of
$          per share, subject to adjustment in
certain events. The initial conversion price will
be determined on the basis of the initial public
offering price per share. See "Description of
Convertible Notes -- Conversion."

Redemption at the Option of
the Company................  The Convertible Notes are not redeemable by the
Company prior to           , 2001. On or after
, 2001, the Company may, upon at least
15 days' notice, redeem the Convertible Notes at
the redemption prices set forth herein, together
with accrued and unpaid interest thereon, if the
closing price of the Common Stock is at least 125%
of the conversion price for at least 20 trading
days within a period of 30 consecutive trading days
ending on the fifth trading day prior to the notice
of redemption. See "Description of Convertible
Notes -- Optional Redemption."

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8

Repurchase Upon Designated
Event....................  The Convertible Notes are required to be
repurchased at 101% of their principal amount
together with accrued and unpaid interest thereon,
at the option of the holder, upon the occurrence of
a Designated Event (i.e., a Change of Control or a
Termination of Trading (each as defined)). See
"Description of Convertible Notes -- Repurchase at
Option of Holders Upon a Designated Event."

Subordination..............  The Convertible Notes will be unsecured obligations
of the Company and will be subordinated in right of
payment to all existing and future Senior Debt of
the Company and effectively subordinated to all
existing and future liabilities and obligations of
the Company's subsidiaries. See "Description of
Convertible Notes -- Subordination."

Proposed Nasdaq Stock
Market Symbol............  "AMKRG"

Securities Lending
Arrangement..............  In connection with market-making activities in the
Convertible Notes, Smith Barney Inc. may from time
to time borrow, return and reborrow up to 3.0
million shares of Common Stock from an affiliate of
the Company. The Underwriters are not obligated,
however, to make a market in the Convertible Notes
and any such market-making may be discontinued at
any time at the sole discretion of the
Underwriters. See "Underwriting."

USE OF PROCEEDS

The net proceeds to the Company of the Offerings will be used primarily to
repay approximately $389 million of short-term and long-term debt, including
amounts due to Anam U.S.A., a wholly-owned subsidiary of AICL ("AUSA"), and to
repurchase AICL's minority interest in one of the Company's Philippine
manufacturing subsidiaries for approximately $34 million. See "Use of Proceeds."

RISK FACTORS

See "Risk Factors" beginning on page 9 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)

NINE MONTHS
YEAR ENDED DECEMBER 31,                     ENDED SEPTEMBER 30,
------------------------------------------------------   -----------------------
1992       1993       1994       1995        1996        1996          1997
--------   --------   --------   --------   ----------   --------     ----------
(UNAUDITED)

INCOME STATEMENT DATA:
Net revenues.............................  $303,654   $442,101   $572,918   $932,382   $1,171,001   $828,373     $1,043,620
Gross profit.............................    29,418     70,778     58,270    149,047      148,923    115,129        142,832
Operating income (loss)..................   (14,114)    26,374     13,843     84,855       71,368     60,785         62,987
Net income (loss)........................   (16,430)    17,236     11,574     59,124       34,188     33,613         22,903
Pro forma adjustment for income
taxes(1)...............................       800      2,900        200     10,400        2,900      2,780          3,627
Pro forma net income (loss)(1)...........   (17,230)    14,336     11,374     48,724       31,288     30,833         19,276
Pro forma net income (loss) per common
share..................................      (.21)       .17        .14        .59          .38        .37            .23
Shares used in per share calculation.....    82,610     82,610     82,610     82,610       82,610     82,610         82,610
OTHER DATA:
EBITDA (2)...............................  $ (8,589)  $ 35,712   $ 33,320   $109,957   $  126,232   $ 99,520     $  127,651
Ratio of earnings to fixed charges(3)
Actual.................................        --       3.7x       2.0x       4.6x         2.4x       3.4x           2.0x
Supplemental pro forma.................                                                       x                         x

SEPTEMBER 30, 1997
-------------------------------------------
DECEMBER 31, 1996      ACTUAL      PRO FORMA(4)    AS ADJUSTED(5)
------------------    ---------    ------------    --------------

BALANCE SHEET DATA:
Cash and cash equivalents..........................      $ 49,644         $  80,760     $   57,260        $
Working capital (deficit)..........................        36,785          (175,512)      (199,012)
Total assets.......................................       797,613           882,867        859,367
Short-term borrowings and current portion of
long-term debt...................................       191,813           345,376        345,376
Convertible Subordinated Notes due 2003............            --                --             --         150,000
Long-term debt and due to AUSA (non-current).......       402,338           217,690        217,690
Stockholders' equity...............................        38,560            78,720         47,120

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

(1) 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.

(2) EBITDA is defined as earnings before interest income, other expenses,
interest expense, taxes on income, depreciation and amortization. EBITDA is
presented here to provide additional information about the Company's ability
to meet its future debt service, capital expenditure, and working capital
requirements and should not be construed as a substitute for or a better
indicator of results of operations or liquidity than net income or cash flow
from operating activities computed in accordance with generally accepted
accounting principles.

(3) For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income before income taxes less undistributed earnings in less
than 50%-owned subsidiaries, plus fixed charges, and fixed charges consist
of interest expense incurred and the estimated portion of rental expense
deemed by the Company to be representative of the interest factor of rental
payments under operating leases. Earnings for fiscal 1992 were insufficient
to cover fixed charges by $25.1 million. The supplemental pro forma ratio of
earnings to fixed charges reflects the effect on the ratio of earnings to
fixed charges if the Common Stock and Convertible Notes Offerings had been
completed and the net proceeds to the Company applied as described in "Use
of Proceeds" at the beginning of the respective period presented.

(4) Pro forma balance sheet data reflects (i) the termination of AEI's S
Corporation status which resulted in the recording of a deferred tax
liability of $8.1 million (ii) a distribution of undistributed earnings of
AEI through September 30, 1997 of $23.5 million to stockholders of AEI prior
to the reorganization of the Company and (iii) the reclassification of the
remaining retained earnings of AEI of $5.6 million to additional paid-in
capital. The amount actually distributed by the Company to such stockholders
of AEI will increase to reflect any undistributed net income earned by AEI
following September 30, 1997 and prior to such reorganization. See
"Reorganization -- Termination of S Corporation Status and Distributions"
and Notes 1 and 17 of Notes to Consolidated Financial Statements.

(5) As adjusted to give effect to the application of the estimated net proceeds
to the Company of the Offerings based on an assumed initial public offering
price of $    per share of Common Stock. See "Use of Proceeds." Also
reflects the purchase from AICL of its 40% interest in Amkor/Anam Pilipinas,
Inc. for approximately $34 million and the related elimination of minority
interest and recording of goodwill. See "Reorganization" and Note 1 of Notes

to Consolidated Financial Statements.

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10

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. Unless otherwise indicated, all
information in this Prospectus (i) gives effect to the Reorganization (as
defined under "Reorganization"), including the issuance of 82,610,000 shares of
Common Stock and 5,000 shares of Series A Preferred Stock in connection
therewith, and (ii) assumes that the Underwriters have not exercised the
over-allotment options. See "Reorganization," "Description of Capital Stock,"
"Underwriting," 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 December   , 1997, 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 W    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 AICL contained in this Prospectus has been prepared on
an unconsolidated basis and 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 provision of wafer fabrication services, the Company's expected
capacity utilization rates, the Company's anticipated assumption from AICL of
marketing rights in Japan, 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.

FLUCTUATIONS IN OPERATING RESULTS; DECLINES IN AVERAGE SELLING PRICES

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
AICL, fluctuations in package and test service charges paid to AICL, 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, the Company's business, financial
condition and operating results may be materially and adversely affected. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The Company expects that average selling prices for its services may
decline in the future, principally due to intense competitive conditions. 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 characterized 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

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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 and the nine
months ended September 30, 1997 were adversely affected by an unexpected
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."

RISKS ASSOCIATED WITH LEVERAGE

The Company has historically operated with significant amounts of debt
relative to its equity. At September 30, 1997, the Company had outstanding
$563.1 million in principal amount of indebtedness, including non-current
amounts due to Anam U.S.A., Inc. ("AUSA"), a wholly-owned subsidiary of AICL,
and the Company intends to incur additional bank debt prior to and following the
Offerings in addition to the Convertible Notes issued as part of the Offerings.
In 1996 and the nine months ended September 30, 1997, the Company's payments
under long-term debt agreements (excluding payments to AUSA as described in Note
11 of Notes to Consolidated Financial Statements) were $3.1 million and $41.8
million, respectively. Following the expected application of the net proceeds to
the Company of the Offerings, the Company will continue to have at least $
million in principal amount of indebtedness outstanding. Accordingly, the
Company expects to have debt service requirements of at least $     million in
1998.

The Company is not in compliance with certain covenants with respect to
approximately $176 million of its loans, which in turn has triggered
cross-defaults with respect to an additional $10 million of the Company's loans.
These loan covenants include restrictions on the ability of one of the Company's
subsidiaries to enter into transactions with affiliates, requirements that the
subsidiary maintain certain debt-to-equity ratios and requirements that the
subsidiary comply with certain notice requirements. The Company's obligation to
repay these loans may be accelerated by the lenders at any time. As a result of
such non-compliance, these loans have been classified as current liabilities in
the Company's financial statements included herein, and the report of the
Company's independent public accountants with respect to such financial
statements contains a paragraph stating that there is substantial doubt as to
the ability of the Company to continue as a going concern. The Company will
eliminate such non-compliance by repaying the $176 million of loans using part
of the net proceeds to the Company from the Offerings. See "Use of Proceeds."

At September 30, 1997, the Company had also guaranteed borrowing facilities
available to companies affiliated with James Kim and other stockholders of the
Company totalling $55.6 million of which $34.4 million was outstanding at
September 30, 1997. At September 30, 1997, the Company had $78.7 million of
stockholders' equity and a working capital deficit of $175.5 million (which
amounts were $47.1 million and $199.0 million, respectively, on a pro forma
basis, after giving effect to the termination of AEI's S Corporation status and
the distribution of undistributed net income of AEI through September 30, 1997).

Following the Offerings, the Company will continue to be subject to the
risks associated with leverage, which risks include (i) principal and interest
repayment obligations which require the expenditure of substantial amounts of
cash, the availability of which will be dependent on the Company's future
performance, (ii) inability to repay principal or interest when due, which could
result in a default on the debt and legal actions against the Company, (iii)
adverse effects of interest expense on the Company's financial condition and
results of operations and (iv) potential violations of loan covenants which
could lead to loans being called by banks. In addition, a significant portion of
the debt is owed to banks located in Korea or branches of such banks located
outside Korea. Due to the deterioration of the Korean economy in recent months
and the resulting liquidity crisis in Korea, banks in Korea and their overseas
branches have been experiencing financial difficulties and are reducing their
lending, in particular to companies which have significant amounts of debt
relative to their equity. See "-- Dependence on International Operations and
Sales; Concentration of

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Operations in the Philippines and Korea." Following the Offerings, the Company
will continue to have a significant amount of debt relative to its equity, a
large portion of which debt the Company plans to renew when it is due. If the
Company's banks do not renew these loans when they become due or do not extend
additional loans on acceptable terms to fund the Company's working capital or
capital expenditure needs, the Company will be forced to find other sources of
financing. There can be no assurance that such financing will be available on
favorable terms or at all. If the Company is not able to obtain necessary
financing, the Company's business and financial condition will be materially and
adversely affected. See "Reorganization," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and Notes 7, 8, 11 and 16 of
Notes to Consolidated Financial Statements.

DEPENDENCE ON RELATIONSHIP WITH AICL; POTENTIAL CONFLICTS OF INTEREST

AICL was founded in 1956 by Mr. Hyang-Soo Kim, who currently serves as the
honorary Chairman and a Representative Director of AICL. AICL 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 AICL and the other
companies in the Anam Group are influenced to a significant degree by the family
of Hyang-Soo Kim, which, together with the Company, collectively owned
approximately 17% of the outstanding common stock of AICL as of September 30,
1997. James Kim, the founder of the Company and currently its Chairman and Chief
Executive Officer, is the eldest son of Hyang-Soo 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 AICL. Mr. In-Kil Hwang, the
President and a Representative Director of AICL, is the brother-in-law of James
Kim. After the Offerings, James Kim and trusts established on behalf of members
of his family (the "Kim Family Trusts") will own approximately      % of the
outstanding Common Stock of the Company and James Kim and members of his family
will continue to exercise significant control over the Company. See "-- Benefits
of the Offerings to Existing Stockholders; Continued Control by Existing
Stockholders" and "Principal and Selling Stockholders."

The businesses of the Company and AICL have been interdependent for many
years. In 1996 and the nine months ended September 30, 1997, approximately 72%
and 68%, respectively, of the Company's revenues were derived from sales of
services performed for the Company by AICL. In addition, substantially all of
the revenues of AICL in 1996 and the nine months ended September 30, 1997 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 AICL
and the proportion of AICL's revenues from services sold by the Company to
increase as the Company begins selling the wafer fabrication output of AICL's
new wafer foundry and with the Company's scheduled assumption from AICL in early
1998 of marketing rights for the Japanese market. In the event the ability of
AICL 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 capacity. In addition, there are currently no significant
third party suppliers of packaging and test 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 AICL to effectively provide contracted services on a cost-efficient and
timely basis. The termination of the Company's relationship with AICL for any
reason, or any material adverse change in AICL'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 new supply agreements with AICL (the
"Supply Agreements"). Under the Supply Agreements, AICL has granted to the
Company a first right to substantially all of the packaging and test services
capacity of AICL 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
AICL's packaging and test services, and to purchase all of AICL's wafer output,
under the Supply Agreements. Under the Supply Agreements, pricing arrangements
relating to packaging and test services provided by AICL to the Company will be
subject to quarterly review and adjustment, and such arrangements relating to
the wafer output provided by AICL to the Company will be subject to annual
review and adjustment, in each case on the basis

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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 AICL. 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 AICL and the Company's operating subsidiaries, sales from
AICL to the Company will continue to be made through AUSA, a wholly-owned
financing subsidiary of AICL. 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 AICL 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 AICL 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 AICL on terms that are favorable to the Company or at all.

AICL's ability to continue to provide services to the Company will depend
on AICL's financial condition and performance. AICL currently has a significant
amount of debt relative to its equity, which debt the Company expects will
continue to increase in the foreseeable future. AICL, as a public company in
Korea, has published its most recent semi-annual financial statements as of June
30, 1997. These financial statements are unaudited and prepared on the basis of
Korean GAAP, which differs significantly from U.S. GAAP. U.S. GAAP financial
statements are not available.

During 1996, AICL's unconsolidated cash flows from operations amounted to
W191 billion under Korean GAAP. The following table sets forth the published
unaudited, unconsolidated liabilities and shareholders' equity of AICL under
Korean GAAP as of June 30, 1997.

June 30, 1997(1)
----------------
Liabilities:                                 (in billions)

Current liabilities:
Short-term borrowings:
Won denominated..................................................          W39
U.S. dollar and other foreign currency denominated...............          404
--------
Total short-term borrowings...................................          443
Current maturities of long-term debt:
Won denominated..................................................           39
U.S. dollar and other foreign currency denominated...............           28
--------
Total current maturities of long-term debt....................           67
--------
Other current liabilities..........................................          239
--------
Total current liabilities.....................................          749
--------
Long-term liabilities:
Long-term debt:
Won denominated..................................................          388
U.S. dollar and other foreign currency denominated...............          252
--------
Total long-term debt..........................................          640
Other long-term liabilities........................................          199
--------
Total long-term liabilities...................................          839
--------
Total liabilities...........................................       W1,588
===============
Shareholders' equity...................................................        W 288
===============

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

(1) Because a significant amount of the current and long-term liabilities of
AICL are denominated in U.S. dollars and other foreign currencies, and
because of the recent significant depreciation of the won (for example, from
a Market Average Exchange Rate of W888 to $1.00 on June 30, 1997, to W911 to
$1.00 on September 30, 1997, to W      to $1.00 on December 31, 1997),
AICL's liabilities in won terms and its leverage calculated in won have
significantly increased since June 30, 1997. The effect of this depreciation
on AICL, however, has been mitigated by the fact that substantial amounts of
AICL's revenues are denominated in U.S. dollars.

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

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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 AICL and have otherwise made it more difficult for AICL to obtain
new financing. Therefore, there can be no assurance that AICL 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 AICL 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 AICL's ability to continue to provide services
and otherwise fulfill its obligations to the Company. See "-- Risks Associated
with Leverage" and "-- Dependence on International Operations and Sales;
Concentration of Operations in the Philippines and Korea."

As of June 30, 1997, AICL was contingently liable under guarantees in
respect of debt of its subsidiaries and affiliates in the aggregate amount of
approximately W935 billion. AICL has provided guarantees for all of AUSA's debt,
$176 million of the Company's debt to banks at September 30, 1997 and the
Company's obligations under a receivables sales arrangement. The Company has 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
AICL. There can be no assurance that AUSA will be able to obtain additional
guarantees, if necessary, from AICL. Further, a deterioration in AICL's
financial condition could trigger defaults under AICL's guarantees, causing
acceleration of such loans. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources." In addition, if any relevant subsidiaries or affiliates of AICL were
to fail to make interest or principal payments or otherwise default under their
debt obligations guaranteed by AICL, AICL 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, AICL 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 AICL based on the
Company's forecasts and operational plans prepared jointly by the Company and
AICL reflecting such forecasts. However, as a result of the recent deterioration
of the Korean economy, there can be no assurance that AICL 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 AICL 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
AICL in research and development, as well as the cross-licensing of intellectual
property rights between the Company and AICL. If the Company's relationship with
AICL were terminated for any reason, the Company's research and development
capabilities and intellectual property position could be materially and
adversely affected.

After the Offerings, the Company will continue to be controlled to a
significant degree by James Kim and the Kim Family Trusts, and James Kim and
other members of his family will also continue to exercise significant influence
over the management of AICL and its affiliates. In addition, the Company and
AICL 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. Although any such material agreements
and transactions would require approval of the Company's Board of Directors,
such transactions generally will not require approval of the disinterested
members of the Board of Directors and conflicts of interest may arise in certain
circumstances. Although disinterested directors currently comprise a majority of
the Board of Directors, there can be no assurance that such conflicts will not
from time to time be resolved against the interests of the Company. In addition,
the Company may agree to certain changes in its contractual and other business
relationships with AICL, 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

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Company and AICL. 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 and the first nine
months of 1997, sales to such customers accounted for 27% and 28%, 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 10 and
15 of Notes to Consolidated Financial Statements.

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.

Korea

In 1996 and the nine months ended September 30, 1997, approximately 72% and
68%, respectively, of the Company's revenues were derived from sales of services
performed for the Company by AICL. The operations of AICL 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 AICL'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. 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 AICL) 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 December
, 1997 was W  to $1.00, or approximately   % lower than

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on June 30, 1997, when the Market Average Exchange Rate was W888 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 will
receive loans and other financial support reported to amount to an aggregate of
approximately $57 billion (the "IMF Financial Aid Package"). As there will be
conditions to 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 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.

Such recent and potential future developments relating to Korea, including
the continued deterioration of the Korean economy, could have a material adverse
effect on AICL's and the Company's business, financial condition and results of
operations. See "-- Dependence on Relationship with AICL; Potential Conflicts of
Interest," "Business -- Marketing and Sales" and "-- Facilities and
Manufacturing," and Note 11 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 and the nine months ended
September 30, 1997, 34.1%, 39.2% and 38.6%, respectively, of the Company's net
revenues were derived from sales to the Company's top five customers, with
13.3%, 23.5% and 22.0% 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. See "-- Risks Associated with
New Wafer Fabrication Business." The reduction, delay, or cancellation of orders
from Intel or one of the Company's other significant customers could materially
and adversely affect the Company's business, financial condition and results of
operations. 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."

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.

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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 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 does not
typically operate with any material backlog and, as a result, the Company
expects that in the future, revenues in any quarter will 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 is
continuing 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 following the application of the net
proceeds from the sale of the Common Stock and the Convertible Notes in the
Offerings, its existing cash balances, cash flow from operations, available
equipment lease financing, bank borrowings and financing obtained through AUSA,
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

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exchange rates, changes in semiconductor industry conditions and competitive
factors. There can be no assurance that such additional capital 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. See "-- Risks Associated with Leverage" and "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 AICL 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 AICL 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 is scheduled to begin providing wafer fabrication services with
delivery of the first products from AICL's new foundry expected in the first
half of 1998. Neither the Company nor AICL has 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 AICL
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 AICL encounters these or
similar difficulties, the Company's and AICL's businesses, financial condition
and results of operations could be materially adversely affected. In addition,
TI has transferred certain of its CMOS processes to AICL and AICL is dependent
upon TI's assistance for developing other state-of-the-art wafer manufacturing
processes. If AICL's relationship with TI is disrupted for any reason, AICL'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

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addition, AICL's agreement with TI only covers .25 micron CMOS technology and TI
is not under any obligation to transfer additional technology, particularly .18
micron or smaller CMOS technology. If AICL is not able to obtain such technology
on commercially reasonable terms or at all, the Company's ability to market
AICL's wafer fabrication services could be materially and adversely affected
which could have a material adverse effect on the Company's and AICL's business,
results of operations and financial condition.

The Company's right to the supply of wafers from AICL's foundry is subject
to a preexisting agreement (the "TI Agreement") between AICL and TI, pursuant to
which TI has agreed to purchase at least 40% of the capacity of this foundry and
under certain circumstances has the right to purchase up to 70% of this
capacity. TI has agreed to make such purchases through the Company. 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 as a result to sell substantially all of the
output of AICL's wafer foundry, its business, results of operations and
financial condition could be materially and adversely affected. Under the TI
Agreement, AICL and TI have agreed that AICL and the Company would enter into an
agreement pursuant to which the Company would be obligated to fulfill all of the
obligations of AICL to TI in connection with the sale of products to TI under
the TI Agreement. The Company and AICL have subsequently entered into a Supply
Agreement with respect to wafer fabrication services pursuant to which TI has
been named a third-party beneficiary of the Company's obligations to AICL in
connection with AICL's provision of wafer fabrication services under such Supply
Agreement. AICL has agreed to guarantee the Company's performance under the TI
Agreement. The TI Agreement terminates in July 2006 unless terminated sooner.
The TI Agreement may be terminated upon two years' prior notice by either AICL
or TI if AICL and TI are unable to successfully negotiate prior to December 31,
1998 an amendment to the TI Agreement or a new agreement with respect to AICL's
use of advanced CMOS technology. During such two-year period, TI would be
obligated to purchase a minimum of only 20% of the capacity of AICL's wafer
fabrication facility. In addition, the TI 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 AICL to protect TI's intellectual property
and a change of control, bankruptcy, liquidation or dissolution of AICL. 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
AICL 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 AICL expect
to purchase a significant amount of new packaging and test equipment. From time
to time, increased demand for some of this 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

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Company or AICL, to operate in accordance with the Company's or AICL's
specifications or requirements, or delays in the delivery of such equipment
could delay implementation of the Company's or AICL'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
number of its employees and the scope of its operations. 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), Hyundai Corporation (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 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 integrated device manufacturers such as LG Semicon
Co., Ltd., Hitachi, Ltd., Toshiba Corp. and Winbond Electronics Corporation, who
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.

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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 AICL 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 or 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 AICL's manufacturing process and on the facilities occupied by the
Company and AICL. The Company believes that its activities, as well as those of
AICL, 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 AICL or
restrict the Company's or AICL's ability to expand their respective operations.
The adoption of new ordinances or similar measures or any failure by the Company
or AICL to comply with applicable environmental and land use regulations or to
restrict the discharge of hazardous substances could subject the Company or AICL
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 AICL, 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
AICL, the Company and AICL share intellectual property rights under the terms of
the Supply Agreements between the Company and AICL. Such Supply Agreements also
provide for the cross-licensing of intellectual property rights between the
Company and AICL. 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 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

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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.

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 AICL and a license were not available on commercially reasonable
terms, the Company's business, financial condition and results of operations
could be materially and adversely affected. 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, the TI Agreement does not grant any
license to AICL, and explicitly provides that TI reserves the right to bring a
patent infringement suit against AICL if TI is then generally bringing similar
suits against other wafer manufacturers. As a result, the Company could
similarly be subject to patent litigation by TI in connection with its sale of
wafers produced by AICL. Any such litigation could materially and adversely
affect AICL's ability to continue to manufacture wafers and AICL's and the
Company's business, financial condition and results of operations.

SUBORDINATION OF CONVERTIBLE NOTES

The Convertible Notes will be unsecured and subordinated in right of
payment in full to all existing and future Senior Debt (as defined) of the
Company. As a result of such subordination, in the event of bankruptcy,
liquidation or reorganization of the Company, or upon the acceleration of any
Senior Debt, the assets of the Company will be available to pay obligations on
the Convertible Notes only after all Senior Debt has been paid in full, and
there may not be sufficient assets remaining to pay amounts due on any or all of
the Convertible Notes then outstanding. The Convertible Notes are also
effectively subordinated to the liabilities, including trade payables, of the
Company's subsidiaries. The Indenture relating to the Convertible Notes does not
prohibit or limit the incurrence of additional indebtedness, including Senior
Debt, by the Company or its subsidiaries. The incurrence of additional
indebtedness by the Company or its subsidiaries could adversely affect the
Company's ability to pay its obligations on the Convertible Notes. As of
September 30, 1997, the Company had approximately $          million of
outstanding indebtedness that would have constituted Senior Debt, and the
indebtedness and other liabilities of the Company's subsidiaries (excluding
intercompany indebtedness) that would effectively have been senior to the
Convertible Notes was approximately $       million. The Company anticipates
that from time to time it will incur additional indebtedness, including Senior
Debt.

The Convertible Notes are obligations exclusively of the Company. However,
since the operations of the Company are primarily conducted through its
subsidiaries, the cash flow and the consequent ability of the Company to service
its debt, including the Convertible Notes, are primarily dependent upon the
earnings of its subsidiaries and the distribution of those earnings to, or upon
loans or other payments of funds by those subsidiaries to, the Company. The
payment of dividends and the making of loans and advances to the Company by its
subsidiaries may be subject to statutory or contractual restrictions, are
dependent upon the earnings of those subsidiaries and are subject to various
business considerations.

The Indenture does not contain any financial performance covenants.
Consequently, the Company is not required under the Indenture to meet any
financial tests such as those that measure the Company's working capital,
interest coverage, fixed charge coverage or net worth in order to maintain
compliance with the terms of the Indenture. See "Description of Convertible
Notes -- Subordination."

LIMITATIONS ON REPURCHASE OF CONVERTIBLE NOTES

Upon a Designated Event, which includes a Change of Control and a
Termination of Trading (each as defined), each holder of Convertible Notes will
have certain rights, at the holder's option, to require the

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Company to repurchase all or a portion of such holder's Convertible Notes. If a
Designated Event were to occur, there can be no assurance that the Company would
have sufficient funds to pay the repurchase price for all Convertible Notes
tendered by the holders thereof. In addition, the terms of the Company's
existing or future credit or other agreements relating to indebtedness
(including Senior Debt) may prohibit the Company from purchasing any Convertible
Notes and may also provide that a Designated Event, as well as certain other
change-of-control events with respect to the Company, would constitute an event
of default thereunder. In the event a Designated Event occurs at a time when the
Company is prohibited from purchasing Convertible Notes, the Company could seek
the consent of its lenders to the purchase of Convertible Notes or could attempt
to refinance the borrowings that contain such prohibition. If the Company does
not obtain such a consent or repay such borrowings, the Company would remain
prohibited from purchasing Convertible Notes. In such case, the Company's
failure to purchase tendered Convertible Notes would constitute an Event of
Default under the Indenture, which may, in turn, constitute a further default
under the terms of other indebtedness that the Company has entered into or may
enter into from time to time. In such circumstances, the subordination
provisions in the Indenture would likely restrict payments to the holders of
Convertible Notes. See "Description of Convertible Notes -- Repurchase at Option
of Holders Upon a Designated Event."

NO PRIOR MARKET; LIQUIDITY; STOCK PRICE VOLATILITY; DILUTION

Prior to the Offerings, there has been no public market for the Common
Stock or the Convertible Notes. Consequently, the initial public offering price
will be determined by negotiations among the Company and the representatives of
the Underwriters. Although the Underwriters have advised the Company that they
currently intend to make a market in the Common Stock and Convertible Notes,
they are not obligated to do so and may discontinue such market-making at any
time without notice. There can be no assurance that an active public market for
the Common Stock or the Convertible Notes will develop or be sustained after the
Offerings or that the market price of the Common Stock or the Convertible Notes
will not decline below the initial public offering price. The trading price of
the Common Stock and Convertible Notes could be subject to wide fluctuations 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, 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 and Convertible Notes. Moreover, purchasers of Common Stock in the
Offerings will incur immediate, substantial book value dilution. See "Dilution"
and "Underwriting."

BENEFITS OF THE OFFERINGS TO EXISTING STOCKHOLDERS; CONTINUED CONTROL BY
EXISTING STOCKHOLDERS

Immediately after the closing of the Offerings, based upon shares
outstanding as of the date hereof, the Company's officers, directors, 5%
stockholders, and their affiliates will, in the aggregate, beneficially hold
shares of Common Stock, or approximately      % of the total number of
shares of Common Stock then outstanding. The Offerings will create a public
market for the resale of shares held by these existing stockholders. As a
result, such stockholders, acting together, will be able to effectively control
substantially all matters requiring 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, 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. In addition,
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

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over the market price and may adversely affect the market price of the Common
Stock. See "Principal and Selling Stockholders."

ANTI-TAKEOVER EFFECTS OF DELAWARE LAW AND CERTAIN CHARTER PROVISIONS

The Company's Board of Directors has the authority to issue up to an
additional 9,995,000 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. There are currently 5,000 shares of Non-Voting Series A Preferred
Stock (the "Series A Preferred") authorized and outstanding. While the Company
has no present intention to issue additional 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 in the public market after the
Offerings could adversely affect the prevailing market price of the Common
Stock. In addition to the           shares of Common Stock offered hereby
(assuming no exercise of the Underwriters' over-allotment options), upon the
closing of the Offerings, there will be      shares issuable upon conversion of
the Convertible Notes, all of which shares will be freely tradeable. In
addition, up to 3.0 million shares of Common Stock may be borrowed from Mr.
James Kim and Mrs. Agnes Kim and resold in the public market in connection with
the Underwriters' market-making activities with respect to the Convertible
Notes. Excluding the shares described above, there will be approximately
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 one year after the Reorganization,
approximately           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

In March 1970, AEI was incorporated in Pennsylvania to design semiconductor
packages and provide semiconductor packaging services through a supply
relationship with AICL. Since that time, Mr. James Kim, founder of AEI, and the
Kim Family Trusts have acquired a majority interest in a number of other
companies which support or engage in various aspects of the semiconductor
packaging and test business (these companies, together with AEI, are referred to
as the "Amkor Companies"). Included within the Amkor Companies are T.L. Limited
("TLL"); C.I.L. Limited ("CIL"), a wholly-owned subsidiary of TLL which markets
the Company's services to semiconductor companies in Europe and Asia; Amkor/Anam
Advanced Packaging, Inc. ("AAAP") and Amkor/Anam Pilipinas, Inc. ("AAP") (which
prior to the Reorganization was owned 60% by TLL and is currently 40% owned by
AICL), and AAP's wholly-owned subsidiary Automated Microelectronics Inc.
("AMI"), each of which provides manufacturing services; and AK Industries, Inc.
("AKI") and its wholly-owned subsidiary, Amkor-Anam, Inc., which provides raw
material purchasing and inventory management services. The Company was formed in
September 1997 to consolidate the ownership of the Amkor Companies. Prior to the
consummation of the Reorganization, the Company will conduct no business and
hold no assets or liabilities.

Prior to the Offerings, all of the stock of TLL, CIL, AAAP and AMI and 60%
of the outstanding stock of AAP will be contributed to the Company in exchange
for an aggregate of 55,983,175 shares of Common Stock and 5,000 shares of Series
A Preferred and AEI and AKI will be merged into the Company in exchange for
22,821,645 shares and 3,805,180 shares, respectively, of Common Stock. Such
transactions are referred to collectively as the "Reorganization." The relative
number of shares of Common Stock issued by the Company in connection with each
of the transactions comprising the Reorganization is based upon relative amounts
of stockholders' equity of each of the Amkor Companies as of September 30, 1997.
Following consummation of the Reorganization, substantially all of the issued
share capital of the Amkor Companies will be owned by the Company. Following the
Offerings, Mr. James Kim and the Kim Family Trusts will own           shares of
Common Stock, representing approximately      % of the outstanding shares of
Common Stock. See "Certain Transactions" and "Principal and Selling
Stockholders."

The Offerings are conditioned upon, among other things, the consummation of
the Reorganization.

The Company has entered into an agreement with AICL pursuant to which the
Company will purchase, immediately following the Offerings, AICL's 40% interest
in AAP for approximately $34 million. See "Use of Proceeds."

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 (the "Termination Date"), Mr.
James Kim and the Kim Family Trusts have been obligated to pay U.S. federal and
certain state income taxes on their allocable portion of the income of AEI. The
Company, Mr. Kim and the Kim Family Trusts will enter 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 will also
provide that the Company will indemnify Mr. Kim and such stockholders 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. 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 $3.0 million, $19.8 million, $13.0 million
and $5.0 million in 1994, 1995, 1996 and the first nine months of 1997,
respectively. The Company expects to make additional distributions to such
stockholders prior to the consummation of the Reorganization, which
distributions will represent AEI's cumulative net income in all periods prior to
the Termination Date less the aggregate amount of distributions previously made
to such stockholders. These final distributions are intended to provide such
stockholders with the balance of AEI's net income for which they have already
recognized income taxes. Through September 30, 1997, the amount of such
undistributed net earnings was $23.5 million. See Notes 1, 10 and 17 of Notes to
Consolidated Financial Statements.

24

27

RELATIONSHIP WITH ANAM INDUSTRIAL CO., LTD.

AICL 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. AICL also currently markets its services directly in Korea and
Japan, although the Company is scheduled to assume marketing rights for Japan in
early 1998. In addition, AICL manufactures and sells electric wiring devices and
watches. AICL operates four semiconductor packaging and test facilities in
Korea, and is undergoing qualification of a new deep submicron CMOS wafer
foundry in Korea which it expects will be capable of producing 25,000 8" wafers
per month by the end of 1998. As of June 30, 1997, on the basis of Korean GAAP,
AICL had non-consolidated total assets of approximately W1,875 billion and
non-consolidated total liabilities of approximately W1,588 billion.

AICL was founded in 1956 by Mr. Hyang-Soo Kim, who currently serves as the
honorary Chairman and a Representative Director of AICL. AICL is a member of the
Anam Group, consisting principally of companies in Korea in the electronics
industries. The businesses of AICL and the other companies in the Anam Group are
influenced to a significant degree by the family of Hyang-Soo Kim, which,
together with the Company, collectively owned approximately 17% of the
outstanding common stock of AICL as of September 30, 1997. James Kim, the
founder of the Company and currently its Chairman and Chief Executive Officer,
is the eldest son of Hyang-Soo 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 AICL. Mr. In-Kil Hwang, the President and a
Representative Director of AICL, is the brother-in-law of James Kim. After the
Offerings, James Kim and the Kim Family Trusts will own approximately      % of
the outstanding Common Stock of the Company and James Kim and members of his
family will continue to exercise significant control over the Company. See
"Principal and Selling Stockholders" and "Risk Factors -- Benefits of the
Offerings to Existing Stockholders; Continued Control by Existing Stockholders."

The businesses of the Company and AICL have been interdependent for many
years. In 1996 and the nine months ended September 30, 1997, approximately 72%
and 68%, respectively, of the Company's revenues were derived from sales of
services performed for the Company by AICL. In addition, substantially all of
the revenues of AICL in 1996 and the nine months ended September 30, 1997 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 AICL
and the proportion of AICL's revenues from services sold by the Company to
increase as the Company begins selling the wafer fabrication output of AICL's
new wafer foundry and with the Company's scheduled assumption from AICL in early
1998 of marketing rights for the Japanese market. In the event the ability of
AICL 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 capacity. In addition, there are currently no significant
third party suppliers of packaging and test 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 AICL to effectively provide contracted services on a cost-efficient and
timely basis. The Company expects that the businesses of the Company and AICL
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 of the Company's relationship with AICL for any reason, or any
material adverse change in AICL'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 AICL.
Under the Supply Agreements, AICL has granted to the Company a first right to
substantially all of the packaging and test services of AICL 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 AICL's packaging and test services,
and to purchase all of AICL's wafer output, under the Supply Agreements. Under
the Supply Agreements, pricing arrangements relating to packaging and test
services provided by AICL to the Company will be subject to quarterly review and
adjustment, and such arrangements relating to the wafer output provided by AICL
to the Company will

25

28

be 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 AICL. 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 AICL
and the Company's operating subsidiaries, sales from AICL to the Company will
continue to be made through AUSA, a wholly-owned financing subsidiary of AICL.
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 AICL 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 AICL 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 AICL on terms that
are favorable to the Company or at all.

AICL's ability to continue to provide services to the Company will depend
on AICL's financial condition and performance. AICL currently has a significant
amount of debt relative to its equity, which debt the Company expects will
continue to increase in the foreseeable future. AICL, as a public company in
Korea, has published its most recent semi-annual financial statements as of June
30, 1997. These financial statements are unaudited and prepared on the basis of
Korean GAAP, which differs significantly from U.S. GAAP. U.S. GAAP financial
statements are not available.

During 1996, AICL's unconsolidated cash flows from operations amounted to
W191 billion under Korean GAAP. The following table sets forth the published
unaudited, unconsolidated liabilities and shareholders' equity for AICL under
Korean GAAP as of June 30, 1997.

June 30, 1997(1)
----------------
(in billions)

Liabilities:
Current liabilities:
Short-term borrowing:
Won denominated..................................................       W   39
U.S. dollar and other foreign currency denominated...............          404
--------
Total short-term borrowings...................................          443
Current maturities of long-term debt:
Won denominated..................................................           39
U.S. dollar other and other foreign currency denominated.........           28
--------
Total current maturities of long-term debt....................           67
Other current liabilities..........................................          239
--------
Total current liabilities.....................................          749
--------
Long-term liabilities:
Long-term debt:
Won denominated..................................................          388
U.S. $ and other foreign currency denominated....................          252
--------
Total long-term debt..........................................          640
Other long-term liabilities........................................          199
--------
Total long-term liabilities...................................          839
Total liabilities...........................................        1,588
--------
Shareholders' equity...................................................       W  288
===============

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

(1) Because a significant amount of the current and long-term liabilities of
AICL are denominated in U.S. dollars and other foreign currencies, and
because of the recent significant depreciation of the won (for example,
from a Market Average Exchange Rate of W888 to $1.00 on June 30, 1997,
to W911 to $1.00 on September 30, 1997, to W    to $1.00 on December 31,
1997), AICL's liabilities in won terms and its leverage calculated in
won have significantly increased since June 30, 1997. The effect of this
depreciation on AICL, however, has been mitigated by the fact that
substantial amounts of AICL's revenues are denominated in U.S. dollars.

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

26

29

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 AICL and have otherwise made it more
difficult for AICL to obtain new financing. Therefore, there can be no assurance
that AICL 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 AICL 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 AICL's ability to
continue to provide services and otherwise fulfill its obligations to the
Company. See "Risk Factors -- Risks Associated With Leverage" and
" -- Dependence On International Operations and Sales; Concentration of
Operations in the Philippines and Korea."

As of June 30, 1997, AICL was contingently liable under guarantees in
respect of debt of its subsidiaries and affiliates in the aggregate amount of
approximately W935 billion. AICL has provided guarantees for all of AUSA's debt,
$176 million of the Company's debt to banks as of September 30, 1997 and the
Company's obligations under a receivables sales arrangement. The Company has 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
AICL. There can be no assurance that AUSA will be able to obtain additional
guarantees, if necessary, from AICL. Further, a deterioration in AICL's
financial condition could trigger defaults under AICL's guarantees, causing
acceleration of such loans. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources." In addition, if any relevant subsidiaries or affiliates of AICL were
to fail to make interest or principal payments or otherwise default under their
debt obligations guaranteed by AICL, AICL 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, AICL 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 AICL based on the
Company's forecasts and operational plans prepared jointly by the Company and
AICL reflecting such forecasts. However, as a result of the recent deterioration
of the Korean economy, there can be no assurance that AICL 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 AICL 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
AICL in research and development, as well as the cross-licensing of intellectual
property rights between the Company and AICL. If the Company's relationship with
AICL were terminated for any reason, the Company's research and development
capabilities and intellectual property position could be materially and
adversely affected.

After the Offerings, the Company will continue to be controlled to a
significant degree by James Kim and the Kim Family Trusts, and James Kim and
other members of his family will continue to exercise significant influence over
the management of AICL and its affiliates. In addition, the Company and AICL
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. Although any such material agreements
and transactions would require approval of the Company's Board of Directors,
such transactions generally will not require approval of the disinterested
members of the Board of Directors and conflicts of interest may arise in certain
circumstances. Although disinterested directors currently comprise a majority of
the Board of Directors, there can be no assurance that such conflicts will not
from time to time be resolved against the interests of the Company. In addition,
the Company may agree to certain changes in its contractual and other business
relationships with AICL, 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 AICL. 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.

27

30

USE OF PROCEEDS

The net proceeds to the Company from the sale of the           shares of
Common Stock and the $150,000,000 principal amount of the Convertible Notes
offered by the Company hereby are estimated to be approximately $
(approximately $          if the Underwriters' over-allotment options are
exercised in full), assuming an initial public offering price of $          per
share and after deducting the estimated underwriting discount and estimated
offering expenses. The Company will not receive any proceeds from the sale of
the shares of Common Stock offered hereby by the Selling Stockholders.

Approximately $176 million of the net proceeds to the Company from the
Offerings will be used to repay loans of $55 million, $50 million and $71
million. These loans are due [January] 1998, October 2000 and April 2001,
respectively, at interest rates equal to LIBOR plus an annual spread (7.01%,
6.90% and 6.68%, respectively, at September 30, 1997). The $55 million loan was
incurred in August 1997 in order to redeem $40 million of Floating Rate Notes
issued by AAP and to repay $10 million of short-term debt. The Company is not in
compliance with certain covenants under the above-described loans and, as a
result, the Company's obligation to repay these loans may be accelerated by the
lenders at any time. These loan covenants include restrictions on the ability of
one of the Company's subsidiaries to enter into transactions with affiliates,
requirements that the subsidiary maintain certain debt-to-equity ratios and
requirements that the subsidiary comply with certain notice requirements. As a
result of such non-compliance, these loans have been classified as current
liabilities in the Company's financial statements included herein, and the
report of the Company's independent public accountants with respect to such
financial statements contains a paragraph stating that there is substantial
doubt as to the ability of the Company to continue as a going concern. Repayment
of such loans from the proceeds of the Offerings will eliminate these events of
non-compliance.

Approximately $129 million of the net proceeds to the Company from the
Offerings will be used to repay numerous short-term bank loans, including $126
million of subordinated loans to one of the Company's Philippine subsidiaries
originally incurred to finance capital expenditures for the construction and
start-up of P3, the Company's newest factory in the Philippines, and for working
capital. All of these loans are due within 12 months of September 30, 1997 and
bear interest at rates ranging from 7% to 12%.

An additional approximately $34 million of the net proceeds to the Company
will be used to purchase AICL's 40% interest in AAP. The remaining approximately
$84 million of the net proceeds (approximately $155 million if the Underwriters'
over-allotment option is exercised) will be used to repay a portion of the
amounts due to AUSA. Pending such uses, the net proceeds to the Company of the
Offerings will be invested in investment grade, interest-bearing securities.

DIVIDEND POLICY

The Company currently anticipates that, following the completion of the
Offerings, 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. The Company plans
to make additional distributions to such stockholders prior to the Termination
Date. See "Reorganization."

28

31

CAPITALIZATION

The following table sets forth as of September 30, 1997 (i) the actual
capitalization of the Company derived from the Consolidated Financial
Statements, (ii) the pro forma capitalization of the Company reflecting the
termination of AEI's S Corporation status which will occur in connection with
the Reorganization, and (iii) the pro forma capitalization of the Company as
adjusted principally to reflect the sale by the Company, pursuant to the
Offerings, of           shares of Common Stock at an assumed initial public
offering price of $          per share and $150.0 million of the Convertible
Notes, and the receipt by the Company of the estimated net proceeds therefrom,
after deducting the estimated underwriting discount and estimated offering
expenses. 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.

SEPTEMBER 30, 1997
------------------------------------------
PRO FORMA
ACTUAL      PRO FORMA(1)   AS ADJUSTED(2)
--------     ------------   --------------
(IN THOUSANDS)

Short term borrowings and current
portion of long-term debt.............................  $345,376       $345,376        $
========       ========        ========
Long-term debt:
% Convertible Subordinated Notes due 2003...........  $     --       $     --        $150,000
Other long-term debt..................................    40,736         40,736
Due to AUSA (non-current)(3)............................   176,954        176,954
--------       --------        --------
Total long-term debt..................................   217,690        217,690
Stockholder's equity:
Preferred stock, $.001 par value; 10,000,000 shares
authorized, 5,000 shares issued and outstanding....        --             --
Common Stock, $.001 par value; 500,000,000 shares
authorized, 82,610,000 shares issued and
outstanding, actual;           shares issued and
outstanding, as adjusted(4)........................        46             46
Additional paid-in capital............................    20,522         26,122
Retained earnings.....................................    48,553         11,353          11,353
Unrealized gains on investments.......................     9,599          9,599           9,599
--------       --------        --------
Total stockholders' equity.........................    78,720         47,120
--------       --------        --------
Total capitalization..........................  $296,410       $264,810        $
========       ========        ========

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

(1) Pro forma balance sheet data reflects (i) the termination of AEI's S
Corporation status which resulted in the recording of a deferred tax
liability of $8.1 million, (ii) a distribution by the Company prior to the
Offerings of undistributed earnings of AEI through September 30, 1997 of
$23.5 million to stockholders of AEI prior to the Reorganization and (iii)
the reclassification of the remaining retained earnings of AEI of $5.6
million to additional paid-in capital. The amount actually distributed by
the Company to such stockholders of AEI will reflect any undistributed net
income earned by AEI following September 30, 1997 and prior to the
Reorganization. See "Reorganization -- Termination of S Corporation Status
and Distributions" and Notes 1, 16 and 17 of Notes to Consolidated Financial
Statements.

(2) As adjusted to give effect to the Reorganization and the application of the
estimated net proceeds to the Company of the Offerings based on an assumed
initial public offering price of $     per share of Common Stock. See "Use
of Proceeds" and Notes 1 and 16 of Notes to Consolidated Financial
Statements.

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

(4) Excludes           shares of Common Stock issuable upon exercise of options
to be granted prior to the Offerings under the Company's 1998 Stock Plan at
a price per share equal to the initial public offering price. Also excludes
an aggregate of           shares reserved for issuance upon conversion of
the Convertible Notes,        shares reserved for issuance upon conversion
of the Series A Preferred and an additional           shares reserved for
future issuance under the Company's 1998 Stock Plan, 1998 Director Option
Plan and 1998 Employee Stock Purchase Plan. See "Management" and
"Description of Capital Stock" and Notes 1 and 16 of Notes to Consolidated
Financial Statements.

29

32

DILUTION

The pro forma net tangible book value of the Company as of September 30,
1997 was approximately $45 million or $.54 per share of Common Stock, after
giving effect to the distribution of accumulated previously taxed earnings of
$23.5 million, the recording of deferred taxes of $8.1 million and the
Reorganization. Pro forma net tangible book value per share represents the
Company's total pro forma tangible assets less total liabilities as reflected in
the Consolidated Financial Statements, divided by the number of outstanding
shares of the Company's Common Stock. After giving effect to the sale by the
Company of        shares of Common Stock and $150.0 million of Convertible Notes
offered hereby (assuming no exercise of the Underwriters' overallotment options)
at an assumed initial public offering price of $     per share of Common Stock
and the use by the Company of the estimated net proceeds therefrom (after
deducting the estimated underwriting discounts and offering expenses payable by
the Company), as described in "Use of Proceeds," the Company's net tangible book
value at September 30, 1997 would have been $     million or $     per share of
Common Stock. This represents an immediate increase in net tangible book value
of $     per share to existing stockholders and an immediate dilution in net
tangible book value of $     per share to new public stockholders. The following
table illustrates this per share dilution:

Assumed initial public offering price per share.............            $
------
Net tangible book value per share before the Offerings....  $
------
Increase in net tangible book value per share attributable
to new public stockholders.............................
------
Net tangible book value per share after the Offerings.......
------
Dilution per share to new public stockholders...............            $
======

The following table summarizes, as of September 30, 1997 (after giving
effect to the Reorganization), the number of shares of Common Stock purchased
from the Company, the total consideration paid and the average price per share
paid by the existing stockholders and by new public stockholders purchasing
shares in the Offerings (at an assumed initial public offering price of
$          per share and before deducting the estimated underwriting discounts,
and offering expenses payable by the Company).

SHARES PURCHASED          TOTAL CONSIDERATION
--------------------       ---------------------     AVERAGE PRICE
NUMBER     PERCENT         AMOUNT      PERCENT       PER SHARE
----------   -------       -----------   -------     -------------

Existing stockholders(1)............  82,610,000         %       $                   %      $
New public stockholders(1)..........
-------    -----        -----------    -----
Total.....................                100.0%       $              100.0%
=======    =====        ===========    =====

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

(1) Sales by the Selling Stockholders will reduce the number of shares of Common
Stock held by existing stockholders to           shares or      % of the
total number of shares of Common Stock outstanding after the Offerings
(          shares or      % assuming the Underwriters' over-allotment
options are exercised in full), and will increase the number of shares of
Common Stock held by new public stockholders to           shares or      %
of the total number of shares of Common Stock outstanding after the
Offerings (          shares or      % assuming the Underwriters'
over-allotment options are exercised in full). See "Principal and Selling
Stockholders."

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33

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below for, and as of the
end of, each of the years in the five-year period ended December 31, 1996 and as
of and for the nine-month periods ended September 30, 1996 and 1997 are derived
from the consolidated financial statements of Amkor. The consolidated financial
statements as of December 31, 1995 and 1996 and for each of the years in the
three-year period ended December 31, 1996, and as of and for the nine-month
period ended September 30, 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 December 31,
1992, 1993 and 1994 and September 30, 1996 and for the years ended December 31,
1992 and 1993 and the nine months ended September 30, 1996 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 results of operations for the nine months
ended September 30, 1997 are not necessarily indicative of the results to be
expected for the full year or future periods. 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.

NINE MONTHS
YEAR ENDED DECEMBER 31,                    ENDED SEPTEMBER 30,
------------------------------------------------------   ----------------------
1992       1993       1994       1995        1996        1996        1997
--------   --------   --------   --------   ----------   --------   -----------
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)       (UNAUDITED)

INCOME STATEMENT DATA:
Net revenues..............................  $303,654   $442,101   $572,918   $932,382   $1,171,001   $828,373   $1,043,620
Cost of revenues..........................   274,236    371,323    514,648    783,335    1,022,078    713,244      900,788
--------   --------   --------   --------   ----------   --------   ----------
Gross profit........................    29,418     70,778     58,270    149,047      148,923    115,129      142,832
Operating expenses:
Selling, general and administrative.....    27,465     42,649     41,337     55,459       66,625     46,416       74,094
Research and development................       836      1,755      3,090      8,733       10,930      7,928        5,751
Loss on shut-down of Scotland
operations(1).........................    15,231         --         --         --           --         --           --
--------   --------   --------   --------   ----------   --------   ----------
Total operating expenses............    43,532     44,404     44,427     64,192       77,555     54,344       79,845
--------   --------   --------   --------   ----------   --------   ----------
Operating income (loss)...................   (14,114)    26,374     13,843     84,855       71,368     60,785       62,987
--------   --------   --------   --------   ----------   --------   ----------
Other (income) expense:
Interest expense, net...................     6,330      5,116      5,752      9,797       22,245     11,429       27,400
Foreign currency translation............     3,278      2,809     (4,865)     1,512        2,961        231         (592) 
Other (income), expense net.............      (468)    (3,501)    (2,639)     6,523        3,150      7,562        2,176
--------   --------   --------   --------   ----------   --------   ----------
Total other (income) expense........     9,140      4,424     (1,752)    17,832       28,356     19,222       28,984
--------   --------   --------   --------   ----------   --------   ----------
Income (loss) before income taxes and
minority interest.......................   (23,254)    21,950     15,595     67,023       43,012     41,563       34,003
Provision for income taxes................      (115)     2,445      2,977      6,384        7,876      7,611        3,531
--------   --------   --------   --------   ----------   --------   ----------
Income (loss) before minority interest....   (23,139)    19,505     12,618     60,639       35,136     33,952       30,472
Minority interest.........................    (6,709)     2,269      1,044      1,515          948        339        7,569
--------   --------   --------   --------   ----------   --------   ----------
Net income (loss).........................  $(16,430)  $ 17,236   $ 11,574   $ 59,124   $   34,188   $ 33,613   $   22,903
========   ========   ========   ========   ==========   ========   ==========
PRO FORMA DATA (UNAUDITED):
Historical income (loss) before income
taxes and minority interest.............  $(23,254)  $ 21,950   $ 15,595   $ 67,023   $   43,012   $ 41,563   $   34,003
Pro forma provision for income taxes(2)...       685      5,345      3,177     16,784       10,776     10,391        7,158
--------   --------   --------   --------   ----------   --------   ----------
Pro forma income (loss) before minority
interest(2).............................   (23,939)    16,605     12,418     50,239       32,236     31,172       26,845
Historical minority interest..............    (6,709)     2,269      1,044      1,515          948        339        7,569
--------   --------   --------   --------   ----------   --------   ----------
Pro forma net income (loss)(2)............  $(17,230)  $ 14,336   $ 11,374   $ 48,724   $   31,288   $ 30,833   $   19,276
========   ========   ========   ========   ==========   ========   ==========
Pro forma net income (loss) per common
share(2)................................  $   (.21)  $    .17   $    .14   $    .59   $      .38   $    .37   $      .23
========   ========   ========   ========   ==========   ========   ==========
Shares used in computing pro forma net
income (loss) per common share..........    82,610     82,610     82,610     82,610       82,610     82,610       82,610
========   ========   ========   ========   ==========   ========   ==========
OTHER DATA:
EBITDA(3).................................  $ (8,589)  $ 35,712   $ 33,320   $109,957   $  126,232   $ 99,520   $  127,651
--------   --------   --------   --------   ----------   --------   ----------
Ratio of earnings to fixed charges(4):....
Actual..................................        --        3.7x       2.0x       4.6x         2.4x       3.4x         2.0 x
Supplemental pro forma..................                                                        x                        x

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

(1) During 1992, the Company decided to cease operations at Amkor Anam
EuroServices Ltd. ("AAEL"). AAEL was an IC packaging and testing facility
located in Scotland. In connection with the shut-down of the facility, AAEL
accrued for all of the costs associated with the shut-down, including but
not limited to reserves to record the property, plant and equipment at net
realizable value, severance, and other operating expenses incurred during
the shut-down period.

(2) 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.

(3) EBITDA is defined as earnings before interest income, other expenses,
interest expense, taxes on income, depreciation and amortization. EBITDA is
presented here to provide additional information about the Company's ability
to meet its future debt service, capital expenditure, and working capital
requirements and should not be construed as a substitute for or a better
indicator of results of operations or liquidity than net income or cash flow
from operating activities computed in accordance with generally accepted
accounting principles.

(4) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income before income taxes less undistributed earnings in less
than 50%-owned subsidiaries, plus fixed charges, and fixed charges consist
of interest expense incurred and the estimated portion of rental expense
deemed by the Company to be representative of the interest factor of rental
payments under operating leases. Earnings for fiscal 1992 were insufficient
to cover fixed charges by $25.1 million. The supplemental pro forma ratio of
earnings to fixed charges reflects the effect on the ratio of earnings to
fixed charges as if the Common Stock and Convertible Notes Offerings had
been completed and the net proceeds to the Company applied as described in
"Use of Proceeds" at the beginning of the respective periods presented.

SEPTEMBER 30, 1997
DECEMBER 31,                       -------------------------------------
----------------------------------------------------                                 AS
1992       1993       1994       1995       1996      ACTUAL    PRO FORMA(1)   ADJUSTED(2)
--------   --------   --------   --------   --------   --------   ------------   -----------
(IN THOUSANDS)

BALANCE SHEET DATA:
Cash and cash equivalents....  $  5,451   $  8,929   $114,930   $ 91,151   $ 49,664   $ 80,760     $ 57,260
Working capital (deficit)....    13,896    (13,073)   134,798    111,192     36,785   (175,512)    (199,012)
Total assets.................   159,795    191,754    426,522    635,868    797,613    882,867      859,367
Short-term borrowings and
current portion of long-
term debt..................    38,406     76,051     52,526     85,120    191,813    345,376      345,376
Long-term debt and due to
AUSA.......................    79,788     48,740    273,908    326,422    402,338    217,690      217,690
Stockholders' equity
(deficit)..................      (207)     8,070      9,617     54,778     38,560     78,720       47,120

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

(1) Pro forma balance sheet data reflects (i) the termination of AEI's S
Corporation status which resulted in the recording of a deferred tax
liability of $8.1 million, (ii) a distribution by the Company of
undistributed earnings of AEI through September 30, 1997 of $23.5 million to
stockholders of AEI prior to the Reorganization and (iii) the
reclassification of the remaining retained earnings of AEI of $5.6 million
to additional paid-in capital. The amount actually distributed by the
Company to such stockholders of AEI will increase to reflect any
undistributed net income earned by AEI following September 30, 1997 and
prior to the Reorganization. See "Reorganization -- Termination of S
Corporation Status and Distributions" and Notes 1 and 17 of Notes to
Consolidated Financial Statements.

(2) As adjusted to give effect to the application of the estimated net proceeds
to the Company of the Offerings based on an assumed initial public offering
price of $          per share of Common Stock. See "Use of Proceeds." Also
reflects the purchase from AICL of its 40% interest in AAP for approximately
$34 million and the related elimination of the minority interest and
recording of goodwill. See "Reorganization" and Notes 1 and 16 of Notes to
Consolidated Financial Statements.

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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
provision of wafer fabrication services, the Company's expected capacity
utilization rates, the Company's anticipated assumption from AICL of marketing
rights in Japan, 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 1994 through 1996 and for
the first nine months of 1996 and 1997 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 or for the entire fiscal year.

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 provides packaging and test
services through its three factories in the Philippines as well as the four
factories of AICL in Korea pursuant to a Supply Agreement between the Company
and AICL. As of September 30, 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 control and management 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." 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, 10 and 17 of Notes to Consolidated Financial Statements.

General. From 1994 to 1996, the Company's revenues increased from
approximately $572.9 million to $1.17 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. 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 third quarter of
1997, resulting in positive gross profit for P3 during such quarter. See "Risk
Factors -- Expansion of Manufacturing Capacity; Profitability Affected by
Capacity Utilization Rates" and "Business -- Facilities and Manufacturing."

The Company's results of operations are generally affected by the
capital-intensive nature of its business. In 1994, 1995, 1996 and the nine
months ended September 30, 1997, the Company invested $68.9 million,

33

36

$123.6 million, $185.1 million and $151.5 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. In
addition, the Company's gross margin is significantly affected by fluctuations
in packaging and test service charges paid to AICL pursuant to Supply
Agreements. These charges are subject to quarterly review and adjustment on the
basis of factors such as changes in the semiconductor market, forecasted demand,
product mix and capacity utilization and fluctuations in exchange rates. 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. 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 1994, 1995, 1996 and the nine months
ended September 30, 1997, 33.5%, 34.1%, 39.2% and 38.6%, respectively, of the
Company's net revenues were derived from sales to the Company's top five
customers, with 10.6%, 13.3%, 23.5% and 22.0%, respectively, derived from sales
to Intel. See "Risk Factors -- Customer Concentration; Absence of Backlog."

Relationship with AICL. In 1996 and the first nine months of 1997,
approximately 72% and 68%, respectively, of the Company's revenues were derived
from sales of services performed for the Company by AICL. In addition,
substantially all of the revenues of AICL in 1996 and the nine months ended
September 30, 1997 were derived from services sold by the Company. Historically,
AICL has directly sold packaging and test services in Japan and Korea. The
Company expects to assume marketing rights for services in Japan in early 1998.
Also, in the first half of 1998, the Company is scheduled to begin offering
wafer fabrication services through AICL's new deep submicron CMOS foundry. The
Company expects that this foundry will be capable of producing up to 25,000 8"
wafers per month by the end of 1998. 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 AICL and
the percentage of AICL's revenues from services sold by the Company to increase
as the Company begins selling the wafer fabrication output of AICL's new wafer
foundry and with the Company's anticipated assumption from AICL of the marketing
rights for Japan. Following the Company's assumption of these marketing rights,
the Company will have a first right to substantially all of the packaging and
test service capacity of AICL and the exclusive right to all of the wafer output
of AICL's new wafer foundry.

The Supply Agreements between the Company and AICL 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 AICL 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 AICL
on terms favorable to the Company or at all. See "Relationship with Anam
Industrial Co., Ltd."

The Company expects that the businesses of the Company and AICL 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. As a result, the
Company's business, financial condition and operating results will continue to
be significantly dependent on AICL, including without limitation AICL's ability
to effectively provide the contracted services on a cost-efficient and timely
basis as well as AICL's financial condition and results of operations. The
Company will continue to be controlled to a significant degree by James Kim and
the Kim Family Trusts, and James Kim and members of his family will

34

37

also continue to exercise significant influence over the management of AICL and
its affiliates. In addition, the Company and AICL 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 approval of the
disinterested members of the Board of Directors and conflicts of interest may
arise in certain circumstances. Although disinterested directors currently
comprise a majority of the Board of Directors, there can be no assurance that
such conflicts will not from time to time be resolved against the interests of
the Company. In addition, the Company may agree to certain changes in its
contractual and other business relationships with AICL, 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 AICL. 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 AICL; Potential Conflicts of
Interest."

RESULTS OF OPERATIONS

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

NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31,       SEPTEMBER 30,
-----------------------    --------------------
1994     1995     1996        1996        1997
-----    -----    -----    -----------    -----
(UNAUDITED)

Net revenues.......................................  100.0%   100.0%   100.0%       100.0%     100.0%
Cost of revenues...................................   89.8     84.0     87.3         86.1       86.3
-----    -----    -----        -----      -----
Gross profit.....................................   10.2     16.0     12.7         13.9       13.7
Operating expenses:
Selling, general and administrative..............    7.2      6.0      5.7          5.6        7.1
Research and development.........................    0.6      0.9      0.9          1.0        0.6
-----    -----    -----        -----      -----
Total operating expenses......................    7.8      6.9      6.6          6.6        7.7
-----    -----    -----        -----      -----
Operating income...................................    2.4      9.1      6.1          7.3        6.0
-----    -----    -----        -----      -----
Other (income) expense:
Interest expense, net............................    1.0      1.0      1.9          1.4        2.6
Foreign currency translation.....................   (0.8)     0.2      0.2          0.0       (0.1)
Other (income) expense, net......................   (0.5)     0.7      0.3          0.9        0.2
-----    -----    -----        -----      -----
Total other (income) expense..................   (0.3)     1.9      2.4          2.3        2.8
-----    -----    -----        -----      -----
Income before income taxes and minority interest...    2.7      7.2      3.7          5.0        3.2
Provision for income taxes.........................    0.5      0.7      0.7          0.9        0.3
-----    -----    -----        -----      -----
Income before minority interest....................    2.2      6.5      3.0          4.1        2.9
Minority interest..................................    0.2      0.2      0.1          0.0        0.7
-----    -----    -----        -----      -----
Net income.........................................    2.0      6.3      2.9          4.1        2.2
Pro forma provision for income taxes...............    0.0      1.1      0.2          0.4        0.4
-----    -----    -----        -----      -----
Pro forma net income...............................    2.0%     5.2%     2.7%         3.7%       1.8%
=====    =====    =====        =====      =====

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996

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 AICL's
factories. Net revenues for the first nine months of 1997 increased 26.0% to
$1,043.6 million from $828.4 million for the first nine months of 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 openings of

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38

P3, the Company's newest factory, and K4, AICL's newest factory, in September
1996 enabled the Company to begin to expand sales of BGA packages in the first
nine months of 1997.

Gross Profit. Gross profit increased 24.1% to $142.8 million in the first
nine months of 1997 from $115.1 million in the first nine months of 1996,
resulting in gross margins of 13.7% for the first nine months of 1997 as
compared to 13.9% for the first nine months of 1996. Cost of revenues consists
principally of packaging and test service charges from AICL, costs of direct
material for both the Philippine factories and AICL and labor and other costs at
the Philippine factories. Gross margins remained unchanged primarily due to
increased volumes and changing product mixes in the third quarter of 1997 which
offset $10.0 million of initial operating losses and start-up costs incurred in
connection with P3 during the first half of 1997, and the erosion in average
selling prices for leadframe products during the first quarter of 1997.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 59.6% to $74.1 million, or 7.1% of net
revenues, in the first nine months of 1997 from $46.4 million, or 5.6% of net
revenues, in the first nine months of 1996 primarily due to increases in
personnel in marketing and support to sustain the Company's growth. The growth
in employees contributed to an overall increase in employee-related expenses. In
addition, during the first nine months of 1997, the Company recognized $6.3
million of selling, general and administrative expenses associated with the
start-up of P3. The Company has also continued to invest in new information
systems in order to enhance operating efficiencies and improve customer service
and support.

Research and Development Expenses. Research and development expenses
decreased 27.5% to $5.8 million, or 0.6% of net revenues, in the first nine
months of 1997, from $7.9 million, or 1.0% of net revenues, in the first nine
months of 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 (income) expense consists of interest
expense, net, foreign currency translation expenses and other expense (income),
net. Other expense increased 51.0% to $29.0 million in the first nine months of
1997 from $19.2 million in the first nine months of 1996 primarily as a result
of increased interest expense. Interest expense for the first nine months of
1997 increased to $31.6 million from $15.8 million in the first nine months of
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 $4.2 million and $4.4
million, respectively.

Income Taxes. The Company's effective tax rate (after giving effect to the
pro forma adjustment for income taxes) for the first nine months of 1997 was 21%
as compared to 25% for the first nine months of 1996. The decrease in the
Company's effective tax rate in the first nine months of 1997 from its effective
tax rate of 25% in 1996 and 1995 was primarily due to the recognition of
deferred tax benefits relating to unrealized foreign exchange losses during the
third quarter which are recognized in the Philippines for tax reporting purposes
and relate to unrecognized net foreign exchange losses on U.S. dollar
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 the unrealized foreign
exchange losses was partially offset by increases in the effective rate as a
result of losses at the Company's subsidiary which owns P3. The Company could
not use this loss to offset income from the Company's other Philippine
subsidiaries and reduce the amount of Philippine income tax payable because this
subsidiary is not consolidated with the Company's other Philippine subsidiaries
for tax reporting purposes. The Company's subsidiary that owns P3 operates under
a tax holiday from Philippine income taxes until the end of 2002. The Company
expects that if P3 becomes 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%. 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 of these tax
returns by

36

39

tax authorities. 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.

Minority Interest. Minority interest represents AICL's ownership interest
in the consolidated net income of AAP. Following the Offerings, the Company
intends to purchase AICL's 40% interest in AAP and, as a result, AAP will become
wholly-owned by the Company. See "Use of Proceeds."

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 AICL.

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.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Revenues. Net revenues in 1995 increased 62.7% to $932.4 million from
$572.9 million in 1994. This increase was primarily due to an increase in units
sold as well as an increase in average selling prices which resulted from
significantly increased demand for semiconductors in 1995.

Gross Profit. Gross profit in 1995 increased 155.8% to $149.0 million from
$58.3 million in 1994, representing an increase in gross margin to 16.0% in 1995
from 10.2% in 1994. The increase in gross margin was primarily due to a
decrease, as a percentage of sales, in the packaging and test service charges
paid to AICL in 1995, together with an increase in the average selling price for
many of the Company's products and an increase in the percentage of the
Company's revenues from sales of new, higher margin products.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 34.2% to $55.5 million, or 6.0% of net
revenues, in 1995 from $41.3 million, or 7.2% of net revenues, in 1994 as a
result of the addition of personnel and infrastructure to service increases in
customer demand. In addition,

37

40

the Company began making significant investments in new information systems in
1995 in order to enhance operating efficiencies and improve customer service and
support.

Research and Development Expenses. Research and development expenses
increased 182.6% to $8.7 million, or 0.9% of net revenues, in 1995 from $3.1
million, or 0.6% of net revenues, in 1994 as a result of increased staffing as
well as funding for the Company's efforts to develop laminate substrate
manufacturing capabilities.

Other (Income) Expense. Other expense increased to $17.8 million in 1995
from income of $1.8 million in 1994 primarily as a result of foreign currency
translation losses of $1.5 million in 1995 as compared to foreign currency
translation gains of $4.9 million in 1994 due to a significant depreciation in
the Philippine peso relative to the U.S. dollar in 1995 as compared to 1994, as
well as increases in interest expense, net to $9.8 million in 1995 from $5.8
million in 1994 as a result of increased borrowing to finance capacity
expansion.

Income Taxes. The Company's effective tax rate (after giving effect to the
pro forma provision for income taxes) increased to 25% in 1995 from 19% in 1994
primarily due to a higher proportion of taxable income generated in countries
with relatively higher tax rates.

QUARTERLY RESULTS

The following table sets forth certain unaudited consolidated financial
information, including as a percentage of net revenues, for the seven fiscal
quarters ended September 30, 1997. 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
--------------------------------------------------------------------------
SEPT.                                       SEPT.
MAR. 31,   JUNE 30,     30,      DEC. 31,   MAR. 31,   JUNE 30,     30,
1996       1996       1996       1996       1997       1997       1997
--------   --------   --------   --------   --------   --------   --------
(IN THOUSANDS)

Net revenues.......................  $270,327   $272,262   $285,784   $342,628   $313,019   $350,471   $380,130
Cost of revenues...................   230,387    231,959    250,898    308,834    287,449    299,093    314,246
--------   --------   --------   --------   --------   --------   --------
Gross profit.....................    39,940     40,303     34,886     33,794     25,570     51,378     65,884
Operating expenses:
Selling, general and
administrative.................    13,752     15,948     16,716     20,209     20,608     26,657     26,829
Research and development.........     2,100      2,757      3,071      3,002      1,485      2,030      2,236
--------   --------   --------   --------   --------   --------   --------
Total operating expenses.......    15,852     18,705     19,787     23,211     22,093     28,687     29,065
--------   --------   --------   --------   --------   --------   --------
Operating income...................    24,088     21,598     15,099     10,583      3,477     22,691     36,819
Other expense (income), net........     3,316      6,052      9,853      9,135      8,165      9,577     11,242
--------   --------   --------   --------   --------   --------   --------
Income before income taxes and
minority interest................    20,772     15,546      5,246      1,448     (4,688)    13,114     25,577
Provision for income taxes.........     3,803      2,847        961        265     (1,497)     4,186        842
--------   --------   --------   --------   --------   --------   --------
Income before minority interest....    16,969     12,699      4,285      1,183     (3,191)     8,928     24,735
Minority interest..................       599       (564)       304        609      1,637        221      5,711
--------   --------   --------   --------   --------   --------   --------
Net income.........................  $ 16,370   $ 13,263   $  3,981   $    574   $ (4,828)  $  8,707   $ 19,024
========   ========   ========   ========   ========   ========   ========

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

Net revenues..............................    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
-----      -----      -----       -----      -----      -----      -----
Gross profit............................     14.8       14.8       12.2         9.9        8.2       14.7       17.3
-----      -----      -----       -----      -----      -----      -----
Operating expenses:
Selling, general and administrative.....      5.1        5.9        5.8         5.9        6.6        7.6        7.1
Research and development................      0.8        1.0        1.1         0.9        0.5        0.6        0.5
-----      -----      -----       -----      -----      -----      -----
Total operating expenses..............      5.9        6.9        6.9         6.8        7.1        8.2        7.6
-----      -----      -----       -----      -----      -----      -----
Operating income..........................      8.9        7.9        5.3         3.1        1.1        6.5        9.7
Other expense (income), net...............      1.2        2.2        3.5         2.7        2.6        2.8        3.0
-----      -----      -----       -----      -----      -----      -----
Income before income taxes and minority
interest................................      7.7        5.7        1.8         0.4       (1.5)       3.7        6.7
Provision for income taxes................      1.4        1.0        0.3         0.1       (0.5)       1.2        0.2
-----      -----      -----       -----      -----      -----      -----
Income before minority interest...........      6.3        4.7        1.5         0.3       (1.0)       2.5        6.5
Minority interest.........................      0.2       (0.2)       0.1         0.2        0.5        0.0        1.5
-----      -----      -----       -----      -----      -----      -----
Net income................................      6.1%       4.9%       1.4%        0.2%      (1.5)%      2.5%       5.0%
=====      =====      =====       =====      =====      =====      =====

The Company's revenues 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 AICL 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.

In the third quarter of 1997, net revenues increased over the second
quarter of 1997 as a result of a significant increase in volume, primarily
increased demand for BGA products produced at the AICL factories and P3. During
the third quarter of 1997 increased volumes resulted in gross profit at P3 of
$1.5 million compared to negative gross profit of $10.0 million during the first
six months of 1997. The effects of manufacturing efficiencies from increased
unit volumes and declining local costs as a result of the weakened Philippine
peso resulted in an increase in gross margins at the P1 and P2 factories. During
the first two fiscal quarters of 1997, the Company increased its sales,
marketing and administration headcount by approximately 12%, which resulted in
an overall increase in selling, general and administrative expense of
approximately $5.6 million in the second quarter of 1997 as compared to the
first quarter of 1997. The devaluation of the Philippine peso during the third
quarter of 1997 also generated unrealized foreign exchange losses, the
recognition of which for tax purposes lowered the Company's effective tax rate
in such quarter. See " -- Results of Operations -- Nine Months Ended September
30, 1997 Compared to Nine Months Ended September 30, 1996 -- Income Taxes."

Beginning in the third quarter of 1996, intense competition in the
semiconductor industry worldwide led to a decrease in the average selling prices
of many of the Company's leadframe packages. This decrease was partially offset
by an increase 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.

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

39

42

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 AICL's facilities, fluctuations in
packaging and test service charges paid to AICL, 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, 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

The Company has been investing significant amounts of capital in increasing
its packaging and test services capacity, including for 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, scheduled to
open in 1998. In 1994, 1995, 1996 and the first nine months of 1997, the Company
made capital expenditures of $68.9 million, $123.6 million, $185.1 million and
$151.5 million, respectively. The Company presently anticipates that its capital
expenditures for the last quarter of 1997 will be approximately $32 million and
approximately $147 million for 1998.

The Company historically has 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 AICL, as well as financing from a trade receivables
securitization agreement. Cash used by operating activities in 1994 was $26.3
million and cash provided by operating activities in 1995, 1996 and the first
nine months of 1997 was $47.6 million, $14.0 million, and $180.9 million,
respectively. Cash provided by financing activities was $205.9 million, $71.2
million, $148.0 million and $15.2 million for 1994, 1995, 1996 and the nine
months ended September 30, 1997, respectively.

At September 30, 1997, the Company's debt consisted of $345.4 million of
borrowings classified as current liabilities, $40.7 million of long-term debt
and $177.0 million of amounts due to AUSA. As of such date, the Company had
extended guarantees in respect of bank debt of affiliates in the amount of $35
million and in respect of vendor obligations of an affiliate in the amount of
$20.6 million, which amount may vary over time. At September 30, 1997, the
Company had $252.7 million in borrowing facilities with a number of domestic and
foreign banks, of which $41.7 million remained unused. Certain of these
agreements 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 7.0% to 9.75%. The
Company has received commitments from the banks representing $136 million of the
facilities indicating that they intend to renew the facilities when they expire
through at least October 1, 1998. Also outstanding at September 30, 1997 was
$40.7 million in long-term debt and capital lease obligations with various
expiration dates through April 2004, which accrue interest at rates ranging from
6.5% to 9.7%. See Note 11 of Notes to Consolidated Financial Statement.

The Company has met a significant portion of its financing needs through
financing arrangements obtained by AUSA, AICL's wholly-owned financing
subsidiary. A majority of the amount due to AUSA represents 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
AICL. Based on guarantees

40

43

provided by AICL, AUSA obtains for the benefit of the Company a continuous
series of short-term financing arrangements which generally are less than six
months in duration, and typically are 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 are significant. At September 30, 1997, the Company had
utilized $177.0 million of the approximately $188.0 million of credit facilities
available to the Company through AUSA. These credit facilities are with U.S.
branches of a number of banks located in Korea and have interest rates ranging
from approximately 7% to prime plus 0.25%. The Company reimburses AUSA for the
interest charges incurred by AUSA under these loans. AUSA has received
commitments from its banks indicating that they intend to renew the facilities
when they expire through at least October 1, 1998. AUSA has extended similar
terms to the Company with respect to amounts due to AUSA by the Company.
Accordingly, amounts due to AUSA are classified as noncurrent liabilities on the
Company's balance sheet at September 30, 1997. See Notes 2 and 6 of Notes to
Consolidated Financial Statements.

At September 30, 1997, all of AUSA's debt, as well as $176.3 million of the
Company's debt to banks and the Company's obligations under the Receivables Sale
(as defined below), was guaranteed by AICL. AICL currently has a significant
amount of debt relative to its equity and was contingently liable under
guarantees in respect of debt of its subsidiaries and affiliates. As of June 30,
1997, the most recent date for which such information is publicly available,
AICL had guarantees outstanding in respect of debt of its subsidiaries and
affiliates in the aggregate amount of approximately W935 billion, including the
guarantees of the Company's loans and AUSA's loans. As a result of its
relationship with AICL, the Company's business, financial condition and
operating results are significantly dependent on AICL. There can be no assurance
that AUSA will be able to obtain additional guarantees, if necessary, from AICL.
In addition, a deterioration in AICL's financial condition could trigger
defaults under AICL's guarantees, causing acceleration of such loans. See
"-- Overview -- Relationship with AICL," "Risk Factors -- Dependence on
Relationship with AICL; Potential Conflicts of Interest" and "Relationship with
Anam Industrial Co., Ltd."

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 agreement terminates in June 2000. The Company applied
approximately $83.4 million of the initial Receivables Sale proceeds to reduce
the Company's indebtedness to AUSA.

At September 30, 1997, the Company had cash and cash equivalents of $80.8
million and a working capital deficit of $175.5 million ($57.3 and $199.0
million, respectively, on a pro forma basis, after giving effect to the
termination of AEI's S Corporation status and the distribution of undistributed
earnings through September 30, 1997). The Company's working capital deficit
resulted primarily from the significant amount of its short-term debt, primarily
incurred in connection with the expansion of its Philippine operations, together
with approximately $111 million of term loans which have been reclassified as
current liabilities as a result of the non-compliance by the Company with
certain covenants thereunder. The Company's non-compliance with certain
covenants with respect to approximately $176 million of its loans has triggered
cross-defaults with respect to an additional $10 million of the Company's loans.
These loan covenants include restrictions on the ability of one of the Company's
subsidiaries to enter into transactions with affiliates, requirements that the
subsidiary maintain certain debt-to-equity ratios and requirements that the
subsidiary comply with certain notice requirements. The Company's obligation to
repay these loans may be accelerated by the lenders at any time. As a result of
such non-compliance, the report of the Company's independent public accountants
with respect to the Company's financial statements included herein contains a
paragraph stating that there is substantial doubt as to the ability of the
Company to continue as a going concern. The Company will eliminate such
non-compliance by repaying the $176 million of such loans using part of the net
proceeds to the Company from the Offerings. See "Use of Proceeds." See "Risk
Factors -- Risks Associated with Leverage."

The Company will use the net proceeds received from the Offerings primarily
to repay an aggregate of approximately $389 million of short-term and long-term
debt, including the $176 million of loans with respect to which the Company is
in non-compliance, $129 million of short-term loans, and $84 million ($155
million

41

44

if the Underwriters' overallotment options are exercised) of amounts due to
AUSA. In addition, the Company will use approximately $34 million of such net
proceeds to repurchase AICL's 40% interest in AAP. See "Use of Proceeds."
Following the expected application of the net proceeds of the Offerings to the
Company, the Company will have $     million of short-term debt, $     million
of long-term debt and $     million of amounts due to AUSA. In addition, the
Company expects that it will have positive working capital.

The Company currently intends to spend approximately $145 million in 1998
in capital expenditures for expansion of the Company's existing facilities in
the Philippines as well as the start up of a new factory in Chandler, Arizona.
The Company also plans to reduce short-term borrowings and advances to
affiliates during 1998 using working capital and, if necessary, new bank
borrowings. The Company believes that following the application of the net
proceeds from the Offerings, its existing cash balances, cash flow from
operations, available equipment lease financing, bank borrowings and financing
obtained through AUSA will be sufficient to meet its anticipated cash
requirements including working capital and capital expenditures, for at least
the next 12 months. In addition, the Company intends to seek out strategic
long--term servicing arrangements to fund part of its capital expansion plans in
1998. 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.

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. As a result, AEI did not
recognize federal corporate income taxes. Instead, up until the Termination
Date, Mr. James Kim and the Kim Family Trusts have been obligated to pay U.S.
federal and certain state income taxes on their allocable portion of the income
of AEI. The Company, Mr. Kim and the Kim Family Trusts will enter 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 will also provide that the Company will indemnify Mr. Kim and such
stockholders 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. 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 $3.0 million, $19.8 million,
$13.0 million and $5.0 million in 1994, 1995, 1996 and the first nine months of
1997, respectively. The Company expects to make additional distributions to such
stockholders prior to the consummation of the Reorganization, which
distributions will represent AEI's cumulative net income in all periods prior to
the Termination Date less the aggregate amount of distributions previously made
to such stockholders. These final distributions are intended to provide such
stockholders with the balance of AEI's net income for which they have already
recognized income taxes. Through September 30, 1997, the amount of such
undistributed net earnings was $23.5 million. See "Reorganization" and Notes 1,
10 and 17 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.

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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
provision of wafer fabrication services, 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 "Risk Factors," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business."

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 September 30, 1997, 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.

In the first half of 1998 the Company is scheduled to begin offering wafer
fabrication services through AICL's new deep submicron CMOS foundry. The Company
expects that this foundry will be capable of producing up to 25,000 8" wafers
per month by the end of 1998. Through a strategic relationship with TI, the
Company and AICL are qualifying .25 micron CMOS process technology, and AICL is
negotiating with TI to obtain the technology necessary to migrate to .18 micron
during 1998. This foundry will primarily manufacture digital signal processors
("DSPs"), application specific integrated circuits ("ASICs") and other logic
devices. The Company expects to sell approximately 50% of AICL's wafer output to
TI pursuant to its relationship with TI. By leveraging the Company's leading
position in semiconductor packaging and test services, the new wafer fabrication
services will enable 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 AICL in Korea
pursuant to a Supply Agreement between the Company and AICL, under which AICL
provides packaging and test services to the Company. In 1996 and the first nine
months of 1997, AICL provided packaging and test services representing
approximately 72% and 68%, respectively, of the Company's net revenues.

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.

43

46

[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, 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

44

47

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 from $3.2 billion in 1993 to $6.8 billion in 1996, representing 3.7% and
4.8%, respectively, of the worldwide market for semiconductors. The significant
growth in the number of 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.

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. This demand is expected to grow faster than that of the semiconductor
market as a whole. According to industry estimates, independent packaging
revenues are expected to grow at a compound annual rate of 20.3% over the next
five years from an estimated $5.0 billion in 1996 (32% of the world's IC
packaging needs) to $12.5 billion in 2001 (45% of the world's IC packaging
needs). 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.

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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 AICL's new wafer
fabrication capabilities, the Company will be able to begin offering 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 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 AICL'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. The Company holds
numerous process technology patents, including joint ownership with AICL of a
U.S. patent for the "Gold Gate" molding method, which enables automated mold
processing for BGA packages.

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

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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 the
first nine months of 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. In the first half of 1998, the Company is scheduled to begin to
provide wafer fabrication services through AICL's new deep submicron CMOS
foundry. With the addition of wafer fabrication, the Company will be 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              8-44        Designed for needs of lower lead
Circuit)                                                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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51

- --------------------------------------
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            8-80        Designed for gate drivers,
Package)                                                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                                   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 AICL'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 3.3% of the Company's total 1996
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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54

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 net revenues and the percentage of total net revenues by product
type:

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------    NINE MONTHS ENDED
1994                 1995                 1996           SEPTEMBER 30, 1997
-----------------    -----------------    -----------------    ------------------
REVENUES      %      REVENUES      %      REVENUES      %      REVENUES       %
--------    -----    --------    -----    --------    -----    --------     -----
(DOLLARS IN MILLIONS)

Traditional Leadframe..............   $   487      85.1%   $   699      75.0%   $   792      67.6%   $   592       56.7%
Advanced Leadframe.................        53       9.2        157      16.8        220      18.8        229       21.9
Laminate...........................         3       0.5         15       1.6         90       7.7        154       14.8
Testing and Other                          30       5.2         61       6.6         69       5.9         69        6.6
----     -----       ----     -----     ------     -----       ----      -----
Total..........................   $   573     100.0%   $   932     100.0%   $ 1,171     100.0%   $ 1,044      100.0%
====     =====       ====     =====     ======     =====       ====      =====

Wafer Fabrication

The Company is scheduled to begin offering wafer fabrication services
through AICL's new deep submicron CMOS foundry in the first half of 1998. The
Company expects the foundry to produce up to 25,000 8" wafers per month by the
end of 1998. Through a strategic relationship with TI, the Company and AICL are
currently qualifying .25 micron CMOS process technology, and AICL is negotiating
with TI to obtain the technology necessary to migrate to .18 micron CMOS process
technology during 1998. The Company's right to the supply of wafers from the
foundry is subject to the TI Agreement. 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. See "Risk Factors -- Risks
Associated with New Wafer Fabrication Business" and " -- Intellectual Property."

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

The Company's five largest customers collectively accounted for approximately
34.1%, 39.2%, and 38.6% of the Company's total revenues in 1995, 1996, and the
first nine months of 1997, 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 (Santa Clara,
California; Dallas, Texas; Austin, Texas; Chandler, Arizona; 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 15 of Notes to the Consolidated 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 175 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. A new packaging factory
is currently under construction at the Company's Chandler, Arizona site with
expected start-up in the second half of 1998. In addition, the Company provides
packaging

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and test services through AICL's four factories in Korea, pursuant to a Supply
Agreement with AICL. In 1996 and the first nine months of 1997, AICL provided
packaging and test services which accounted for approximately 72% and 68%,
respectively, of the Company's revenues. In addition to providing world-class
manufacturing services, these factories provide purchasing, engineering, and
customer service support. In the first half of 1998, the Company is scheduled to
begin offering wafer fabrication services through AICL's new state-of-the-art
.25 micron wafer foundry in Korea pursuant to the Supply Agreement. The size,
location, and manufacturing services provided by each of the Company's and
AICL's primary facilities is set forth in the table below. See "Risk
Factors -- Dependence on Relationship With AICL; 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 (1998)            Chandler, Arizona                     106,000       Packaging services for laminate
products; package and process
development

AICL 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 AICL
manufactures semiconductor packaging equip-

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ment exclusively for the Company and AICL at locations in close proximity to the
Company's and AICL'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 AICL'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), Hyundai Corporation (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, who 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
AICL, 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

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58

that extend 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 September 30, 1997, the Company employed approximately 85 persons in
research and development activities. In addition, other management and
operational personnel are involved in research and development activities. In
1994, 1995 and 1996 and the first nine months of 1997, the Company's research
and development expenses were approximately $3.1 million, $8.7 million, $10.9
million and $5.8 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 AICL, 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 AICL, the Company
and AICL share intellectual property rights under the terms of the Supply
Agreements between the Company and AICL. The Supply Agreements also provide for
the cross-licensing of intellectual property rights between the Company and
AICL. 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.

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 AICL and a license were not available on commercially reasonable
terms, the Company's business, financial condition and results of operations
could be materially and adversely affected. 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, the TI Agreement does not grant any
license to AICL, and explicitly provides that TI reserves the right to bring a
patent infringement suit against AICL if TI is then generally bringing similar
suits against other wafer manufacturers. As a result, the Company could
similarly be subject to patent litigation by TI in connection with its sale of
wafers produced by AICL. Any such litigation could materially and adversely
affect AICL's ability to continue to manufacture wafers and AICL'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

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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 AICL's manufacturing processes and on the facilities occupied by
the Company and AICL. The Company believes that its activities, as well as those
of AICL, 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 AICL or
restrict the Company's or AICL's ability to expand their respective operations.
The adoption of new ordinances or similar measures or any failure by the Company
or AICL to comply with applicable environment and land use regulations or to
restrict the discharge of hazardous substances could subject the Company or AICL
to future liability or cause their respective manufacturing operations to be
curtailed or suspended.

EMPLOYEES

As of September 30, 1997, the Company had approximately 8,700 full-time
employees, 6,750 of whom were engaged in manufacturing, 1,500 in manufacturing
support, 85 in research and development, 175 in marketing and sales, and 190 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
September 30, 1997 are as follows:

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

James J. Kim.......................  61    Chief Executive Officer and Chairman
John N. Boruch.....................  55    President and Director
Frank J. Marcucci..................  62    Chief Financial Officer
Eric R. Larson.....................  42    Vice President
Michael D. O'Brien.................  65    Vice President
Thomas D. George(1)................  57    Director
Gregory K. Hinckley(1)(2)..........  51    Director
Louis J. Siana(2)..................  65    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 AICL 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 and Chief Executive Officer of The Electronics
Boutique, Inc., an electronics retail chain, and Forte Systems, Inc., a computer
consulting firm.

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 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.

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.

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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.

Louis J. Siana. Louis Siana has served as a director of the Company since
September 1997. Mr. Siana is a partner in Siana, Carr & O'Connor, CPA, an
accounting firm. Until June 1997, Siana, Carr & O'Connor served as independent
auditors to certain of the Company's predecessors and subsidiaries, including
AEI.

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           1998 and
approved by the Company's stockholders in           1998. A total of
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, and the exercise price of the options is 100% of the fair
market value of the Common Stock on the grant date. 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 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 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           2008 unless sooner terminated by the Board of Directors.

BOARD COMMITTEES

The Board of Directors will have 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. Hinckley and Siana. The functions of the Audit Committee will be 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 nonaudit services of the independent auditors, review
compliance with existing 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

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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, 1996, by the Company's Chief Executive
Officer and the three 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
---------------------      ALL OTHER
NAME AND PRINCIPAL POSITIONS                  SALARY       BONUS       COMPENSATION
- ---------------------------------------------------------  --------     --------     ------------

James J. Kim, Chief Executive Officer and Chairman(1)....  $500,000     $     --       $101,716
John N. Boruch, President................................   400,000      375,000             --
Frank J. Marcucci, Chief Financial Officer...............   216,731      100,000             --
Michael D. O'Brien, Vice President.......................   198,460      100,000             --

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

(1) All other compensation for Mr. Kim represents compensation to Mr. Kim in the
form of interest free loans.

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
1998 and approved by the Company's stockholders in           1998.
Unless terminated sooner, the 1998 Plan will terminate automatically in
2008. A total of            shares of Common Stock have been reserved
for issuance under the 1998 Plan. The maximum aggregate number of shares which
may be optioned and sold under the 1998 Plan is      , 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        , or (ii) a lesser amount determined by the board
of directors.

The 1998 Plan may be administered by 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 Committee 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 three months 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

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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 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 Employee Stock Purchase Plan. The Company's 1998 Employee Stock
Purchase Plan (the "Purchase Plan") was adopted by the Board of Directors in
1998 and approved by the stockholders in             , 1998. A total
of        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        , 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 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. The
initial offering period under the Purchase Plan will begin on the effective date
of this Offering and subsequent offering periods will begin on the first trading
day on or after        and        of each year. Each participant will be granted
an option on the first day of the 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

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exercise date. The Purchase Plan will terminate in           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 "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
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. Company contributions to the Plan are held in trust. The Plan is
presently underfunded by $7.2 million. See Note 9 of 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

AICL was founded in 1956 by Mr. Hyang-Soo Kim, who currently serves as the
honorary Chairman and a Representative Director of AICL. AICL is a member of the
Anam Group of companies, consisting principally of companies in Korea in the
electronics industries. The management of AICL and the other companies in the
Anam Group are influenced to a significant degree by the family of Hyang-Soo
Kim, which, together with the Company, collectively owned approximately 17% of
the outstanding common stock of AICL as of September 30, 1997. James Kim, the
founder of the Company and currently its Chairman and Chief Executive Officer,
is the eldest son of Hyang-Soo 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 AICL. Mr. In-Kil Hwang, the President and a
Representative Director of AICL, is the brother-in-law of James Kim. After the
Offerings, James Kim and the Kim Family Trusts will own approximately      % of
the Company's outstanding Common Stock and James Kim and members of his family
will continue to exercise significant control over the Company. The Company and
AICL have had a long-standing relationship. In 1996 and the nine months ended
September 30, 1997, approximately 72% and 68%, respectively, of the Company's
revenues were derived from sales of services performed for the Company by AICL.
In addition, substantially all of the revenues of AICL in 1996 and the nine
months ended September 30, 1997 were derived from services sold by the Company.
The Company expects that the businesses of the Company and AICL 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. See "Relationship with Anam
Industrial Co., Ltd."

The Company was formed in September 1997 as a holding company for the Amkor
Companies. In connection with the Reorganization, Mr. James Kim, Chairman and
Chief Executive Officer of the Company, and the Kim Family Trusts will exchange
their interests in AEI and AKI in return for shares of the Company's Common
Stock. Following the Offerings, Mr. Kim and the Kim Family Trusts are expected
to own        shares of the Company's Common Stock representing approximately
% of the outstanding shares of Common Stock. See "Reorganization."

The Company proposes to enter into an indemnification agreement with each
of the directors of the Company pursuant to which the Company will indemnify
such directors for all matters arising out of their membership on the Company's
Board of Directors to the maximum extent permissible under Delaware law.

In connection with the Reorganization, the Company proposes to enter into
tax indemnification agreements with Mr. 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 will also provide that the
Company will indemnify Mr. Kim and such stockholders 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.
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 $13.0 million and $5.0 million in 1996 and the first nine months
of 1997, respectively. The Company expects to make additional distributions to
such stockholders prior to the consummation of the Reorganization, which
distributions will represent AEI's cumulative net income in all periods prior to
the Termination Date less the aggregate amount of distributions previously made
to such stockholders. These final distributions are intended to provide such
stockholders with the balance of AEI's net income for which they have already
recognized income taxes. Through September 30, 1997, the amount of such
undistributed net earnings was $23.5 million. See "Reorganization" and Notes 1,
10 and 17 of Notes to Consolidated Financial Statements.

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 equals approximately $88.0
million. See Note 11 of Notes to Consolidated Financial Statements.

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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 in the amount of $101,716
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. Mr. Kim intends to use the proceeds from the sales in the
Offerings of shares of Common Stock owned by him to repay amounts outstanding
under the agreement. See Note 11 of Notes to Consolidated Financial Statements.

Mr. Kim sold his interest in Amkor Anam Test Services, Inc., representing
half of its outstanding capital stock, to AEI for $910,350.

AK Investments, Inc., a company owned by Mr. Kim, purchased certain
securities held by AEI for $49.8 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 amount remains outstanding at September 30, 1997. See Notes 6 and
11 of Notes to Consolidated Financial Statements.

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 11 of Notes to Consolidated Financial Statements.

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 $       million.
See Note 11 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 $       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 $20.6 million and $9.8 million, respectively. See Note 11 of Notes
to Consolidated Financial Statements.

The Company leases office space located in West Chester, Pennsylvania from
the Kim Family Trusts. 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 11 of Notes to Consolidated Financial Statements.

Louis J. Siana is a partner in the accounting firm of Siana Carr &
O'Connor, LLP which, prior to the appointment of Arthur Andersen LLP, served as
the independent auditors for certain of the Company's predecessors and
subsidiaries, including AEI. These entities collectively paid Siana Carr &
O'Connor, LLP $236,000 and $158,000 for such services, in fiscal 1996 and the
nine months ended September 30, 1997, respectively.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the date of this Prospectus, and
as adjusted to reflect the sale of the             shares of Common Stock
offered hereby, 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
BENEFICIAL OWNERSHIP                    AFTER
PRIOR TO OFFERING     NUMBER OF     OFFERING(1)
--------------------    SHARES     ----------------
NAME AND ADDRESS                     NUMBER     PERCENT    OFFERED    NUMBER   PERCENT
- -------------------------------------------------  ----------   -------   ---------   ------   -------

James J. and Agnes C. Kim........................  29,750,000     35.0%
1345 Enterprise Drive
West Chester, PA 19380
David D. Kim Trust of December 31, 1987(2).......  17,620,000     20.7
1500 E. Lancaster Avenue
Paoli, PA 19301
John T. Kim Trust of December 31, 1987(2)........  17,620,000     20.7
1500 E. Lancaster Avenue
Paoli, PA 19301
Susan Y. Kim Trust of December 31, 1987(2)(3)....  17,620,000     20.7
1500 E. Lancaster Avenue
Paoli, PA 19301
Thomas D. George.................................          --       --          --       --        --
Gregory K. Hinckley..............................          --       --          --       --        --
Louis J. Siana...................................          --       --          --       --        --
John N. Boruch...................................          --       --          --       --        --
Eric R. Larson...................................          --       --          --       --        --
Frank J. Marcucci................................          --       --          --       --        --
Michael D. O'Brien...............................          --       --          --       --        --
All directors and executive officers as a group
(8 persons)....................................  29,750,000     35.0%

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

(1) Assumes no exercise of the Underwriters' over-allotment options. The number
and percentage of shares beneficially owned is determined in accordance with
Rule 13d-3 of 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) David D. Kim, John T. Kim and Susan Y. Kim are children of James J. and
Agnes C. Kim.

(3) Includes 8,330,000 shares held by two trusts established for the benefit of
Susan Y. Kim's children.

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DESCRIPTION OF CAPITAL STOCK

GENERAL

Upon the closing of the Offerings, the Company will be authorized to issue
500,000,000 shares of Common Stock, $.001 par value, and 10,000,000 shares of
Preferred Stock, $.001 par value. Immediately after the closing of the Offerings
and assuming no exercise of the Underwriters' over-allotment options, the
Company estimates there will be an aggregate of         shares of Common Stock
outstanding,             shares of Common Stock will be issuable upon exercise
of outstanding options           shares of Common Stock have been reserved for
issuance upon conversion of the Convertible Notes and 5,000 shares of Preferred
Stock will be issued and outstanding.

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 Offerings 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 9,995,000 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 ANTITAKEOVER STATUTE

The Company is subject to Section 203 of the Delaware General Corporation
Law (the "Antitakeover Law"), which regulates corporate acquisitions. The
Antitakeover Law prevents certain Delaware corporations, including those whose
securities are listed for trading on the Nasdaq National Market System, 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 Antitakeover
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 Antitakeover 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 Antitakeover 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 Antitakeover
Law. See "Risk Factors -- Antitakeover 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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DESCRIPTION OF CONVERTIBLE NOTES

The Convertible Notes will be issued under an indenture to be dated as of
, 1998 (the "Indenture") between the Company and                , as
trustee (the "Trustee"), a copy of which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The terms of the
Convertible Notes will include those stated in the Indenture and those made a
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the "TIA"), as in effect on the date of the Indenture. The Convertible
Notes will be subject to all such terms, and holders of the Convertible Notes
are referred to the Indenture and the TIA for a statement of such terms. The
following is a summary of important terms of the Convertible Notes and does not
purport to be complete. Reference should be made to all provisions of the
Indenture, including the definitions therein of certain terms and all terms made
a part of the Indenture by reference to the TIA. Certain definitions of terms
used in the following summary are set forth under "-- Certain Definitions"
below. As used in this section, the "Company" means Amkor Technology, Inc., but
not any of its Subsidiaries, unless the context requires otherwise.

GENERAL

The Convertible Notes will be general unsecured subordinated obligations of
the Company, will mature on             , 2003 (the "Maturity Date"), and will
be limited to an aggregate principal amount of $150,000,000 ($172,500,000 if the
Underwriters' over-allotment option is exercised). The Convertible Notes will be
issued in denominations of $1,000 and integral multiples of $1,000 in fully
registered form. The Convertible Notes are exchangeable and transfers thereof
will be registrable without charge therefor, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge in connection
therewith.

The Convertible Notes will accrue interest at a rate of     % per annum
from             , 1998, or from the most recent interest payment date to which
interest has been paid or duly provided for, and accrued and unpaid interest
will be payable semi-annually in arrears on           and           of each year
beginning             , 1998. Interest will be paid to the person in whose name
a Convertible Note is registered at the close of business on the           or
immediately preceding the relevant interest payment date (other than
with respect to a Convertible Note or portion thereof called for redemption on a
redemption date, or repurchased in connection with a Designated Event on a
repurchase date, during the period from a record date to (but excluding) the
next succeeding interest payment date (in which case accrued interest shall be
payable (unless such Convertible Note of portion thereof is converted) to the
holder of the Convertible Note or portion thereof redeemed or repurchased)).
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.

Principal of, premium, if any, and interest on the Convertible Notes will
be payable at the office or agency of the Company maintained for such purpose
or, at the option of the Company, payment of interest may be made by check
mailed to the holders of the Convertible Notes at their respective addresses set
forth in the register of holders of Convertible Notes. Until otherwise
designated by the Company, the Company's office or agency maintained for such
purpose will be the principal corporate trust office of the Trustee.

CONVERSION

The holders of Convertible Notes will be entitled at any time on or before
the close of business on the last trading day prior to the Maturity Date of the
Convertible Notes, subject to prior redemption or repurchase, to convert any
Convertible Notes or portions thereof (in denominations of $1,000 or multiples
thereof) into Common Stock of the Company, at the conversion price of
$          per share of Common Stock, subject to adjustment as described below
(the "Conversion Price"). Except as described below, no adjustment will be made
on conversion of any Convertible Notes for interest accrued thereon or for
dividends on any Common Stock issued. If Convertible Notes not called for
redemption are converted after a record date for the payment of interest and
prior to the next succeeding interest payment date, such Convertible Notes must
be accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted. The Company is not
required to issue fractional shares of Common Stock upon

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conversion of Convertible Notes and, in lieu thereof, will pay a cash adjustment
based upon the market price of the Common Stock on the last trading day prior to
the date of conversion. In the case of Convertible Notes called for redemption,
conversion rights will expire at the close of business on the trading day
preceding the date fixed for redemption, unless the Company defaults in payment
of the redemption price, in which case the conversion right will terminate at
the close of business on the date such default is cured. In the event any holder
exercises its right to require the Company to repurchase Notes upon a Designated
Event, such holder's conversion right will terminate. See "-- Repurchase at
Option of Holders Upon a Designated Event."

The right of conversion attaching to any Convertible Note may be exercised
by the holder by delivering the Convertible Note at the specified office of a
conversion agent, accompanied by a duly signed and completed notice of
conversion, together with any funds that may be required as described in the
preceding paragraph. The conversion date shall be the date on which the
Convertible Note, the duly signed and completed notice of conversion, and any
funds that may be required as described in the preceding paragraph shall have
been so delivered. A holder delivering a Convertible Note for conversion will
not be required to pay any taxes or duties payable in respect of the issue or
delivery of Common Stock on conversion, but will be required to pay any tax or
duty which may be payable in respect of any transfer involved in the issue or
delivery of the Common Stock in a name other than the holder of the Convertible
Note. Certificates representing shares of Common Stock will not be issued or
delivered unless all taxes and duties, if any, payable by the holder have been
paid.

The Conversion Price is subject to adjustment (under formulae set forth in
the Indenture) in certain events, including: (i) the issuance of Common Stock as
a dividend or distribution on Common Stock; (ii) certain subdivisions and
combinations of the Common Stock; (iii) the issuance to all or substantially all
holders of Common Stock of certain rights or warrants to purchase Common Stock;
(iv) the dividend or other distribution to all holders of Common Stock of shares
of capital stock of the Company (other than Common Stock) or evidences of
indebtedness of the Company or assets (including securities, but excluding those
rights, warrants, dividends and distributions referred to above and dividends
and distributions in connection with the liquidation, dissolution or winding up
of the Company or paid exclusively in cash); (v) dividends or other
distributions consisting exclusively of cash (excluding any cash portion of
distributions referred to in clause (iv)) to all holders of Common Stock to the
extent such distributions, combined together with (A) all such all-cash
distributions made within the preceding 12 months in respect of which no
adjustment has been made plus (B) any cash and the fair market value of other
consideration payable in respect of any tender offers by the Company or any of
its Subsidiaries for Common Stock concluded within the preceding 12 months in
respect of which no adjustment has been made, exceeds 15% of the Company's
market capitalization (being the product of the then current market price of the
Common Stock times the number of shares of Common Stock then outstanding) on the
record date for such distribution; and (vi) the purchase of Common Stock
pursuant to a tender offer made by the Company or any of its subsidiaries to the
extent that the aggregate consideration, together with (X) any cash and the fair
market value of any other consideration payable in any other tender offer
expiring within 12 months preceding such tender offer in respect of which no
adjustment has been made plus (Y) the aggregate amount of any such all-cash
distributions referred to in clause (v) above to all holders of Common Stock
within the 12 months preceding the expiration of such tender offer in respect of
which no adjustments have been made, exceeds 15% of the Company's market
capitalization on the expiration of such tender offer.

In the case of (i) any reclassification or change of the Common Stock or
(ii) a consolidation, merger or combination involving the Company or a sale or
conveyance to another corporation of the property and assets of the Company as
an entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, other securities,
other property or assets (including cash) with respect to or in exchange for
such Common Stock, the holders of the Convertible Notes then outstanding will be
entitled thereafter to convert such Convertible Notes into the kind and amount
of shares of stock, other securities or other property or assets, which they
would have owned or been entitled to receive upon such reclassification, change,
consolidation, merger, combination, sale or conveyance had such Convertible
Notes been converted into Common Stock immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
(assuming, in a case in which the Company's stockholders may exercise

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rights of election, that a holder of Convertible Notes would not have exercised
any rights of election as to the stock, other securities or other property or
assets receivable in connection therewith and received per share the kind and
amount received per share by a plurality of non-electing shares). Certain of the
foregoing events may also constitute or result in a Designated Event requiring
the Company to offer to repurchase the Convertible Notes. See "-- Repurchase at
Option of Holders Upon a Designated Event."

In the event of a taxable distribution to holders of Common Stock (or other
transaction) that results in any adjustment of the Conversion Price, the holders
of Convertible Notes may, in certain circumstances, be deemed to have received a
distribution subject to United States income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock. See "Certain Federal Income Tax
Consequences to Holders of Common Stock and Convertible Notes."

The Company from time to time may, to the extent permitted by law, reduce
the Conversion Price of the Convertible Notes by any amount for any period of at
least 20 days, in which case the Company shall give at least 15 days' notice of
such decrease, if the Board of Directors has made a determination that such
decrease would be in the best interests of the Company, which determination
shall be conclusive. The Company may, at its option, make such reductions in the
Conversion Price, in addition to those set forth above, as the Board of
Directors deems advisable to avoid or diminish any income tax to holders of
Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes. See
"Certain Federal Income Tax Consequences to Holders of Common Stock and
Convertible Notes."

No adjustment in the Conversion Price will be required unless such
adjustment would require a change of at least 1% of the Conversion Price then in
effect; provided that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the Conversion Price will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing.

SUBORDINATION

The payment of principal of, premium, if any, and interest on the
Convertible Notes will be subordinated in right of payment, as set forth in the
Indenture, to the prior payment in full in cash or other payment satisfactory to
the Senior Debt of all Senior Debt, whether outstanding on the date of the
Indenture or thereafter incurred. Upon any distribution to creditors of the
Company in a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, an assignment for the benefit of creditors or any
marshaling of the Company's assets and liabilities, the holders of Senior Debt
will be entitled to receive payment in full in cash or other payment
satisfactory to the Senior Debt of all Senior Debt of all obligations in respect
of such Senior Debt before the holders of Convertible Notes will be entitled to
receive any payment with respect to the Convertible Notes.

In the event of any acceleration of the Convertible Notes because of an
Event of Default, the holders of any Senior Debt then outstanding will be
entitled to payment in full in cash or other payment satisfactory to the holders
of such Senior Debt of all obligations in respect of such Senior Debt before the
holders of the Convertible Notes are entitled to receive any payment or
distribution in respect thereof. If payment of the Convertible Notes is
accelerated because of an Event of Default, the Company or the Trustee shall
promptly notify the holders of Senior Debt or the trustee(s) for such Senior
Debt of the acceleration. The Company may not pay the Convertible Notes until
five business days after such holders or trustee(s) of Senior Debt receive
notice of such acceleration and, thereafter, may pay the Convertible Notes only
if the subordination provisions of the Indenture otherwise permit payment at
that time.

The Company also may not make any payment upon or in respect of the
Convertible Notes if (i) a default in the payment of the principal of, premium,
if any, interest, rent or other obligations in respect of Senior Debt occurs and
is continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Senior Debt that permits
holders of the Designated Senior Debt as to which such default relates to
accelerate its maturity and the Trustee receives a notice of such default

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(a "Payment Blockage Notice") from the Company or other person permitted to give
such notice under the Indenture. Payments on the Convertible Notes may and shall
be resumed (a) in the case of a payment default, upon the date on which such
default is cured or waived and (b) in case of a nonpayment default, the earlier
of the date on which such nonpayment default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is received. No
new period of payment blockage may be commenced unless and until 365 days have
elapsed since the effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice.

By reason of the subordination provisions described above, in the event of
the Company's liquidation or insolvency, holders of Senior Debt may receive
more, ratably, and holders of the Convertible Notes may receive less, ratably,
than the other creditors of the Company. Such subordination will not prevent the
occurrences of any Event of Default under the Indenture.

The Convertible Notes are obligations exclusively of the Company. However,
since the operations of the Company are primarily conducted through
Subsidiaries, the cash flow and the consequent ability of the Company to service
its debt, including the Convertible Notes, are primarily dependent upon the
earnings of its Subsidiaries and the distribution of those earnings to, or upon
loans or other payments of funds by those Subsidiaries to, the Company. The
payment of dividends and the making of loans and advances to the Company by its
Subsidiaries may be subject to statutory or contractual restrictions, are
dependent upon the earnings of those Subsidiaries and are subject to various
business considerations.

Any right of the Company to receive assets of any of its Subsidiaries upon
their liquidation or reorganization (and the consequent right of the holders of
the Convertible Notes to participate in those assets) will be effectively
subordinated to the claims of that Subsidiary's creditors (including trade
creditors), except to the extent that the Company is itself recognized as a
creditor of such Subsidiary, in which case the claims of the Company would still
be subordinate to any security interests in the assets of such Subsidiary and
any indebtedness of such Subsidiary senior to that held by the Company.

As of             , 1997, the Company had approximately $     million of
indebtedness outstanding that would have constituted Senior Debt (excluding
accrued interest and Senior Debt constituting liabilities of a type not required
to be reflected as a liability on the balance sheet of the Company in accordance
with GAAP. As of             , 1997, there was also outstanding approximately
$     million of indebtedness and other obligations of Subsidiaries of the
Company (excluding intercompany liabilities and liabilities of a type not
required to be reflected as a liability on the balance sheet of such
subsidiaries in accordance with GAAP) as to which the Convertible Notes would
have been structurally subordinated. The Indenture will not limit the amount of
additional indebtedness, including Senior Debt, that the Company can create,
incur, assume or guarantee, nor will the Indenture limit the amount of
indebtedness and other liabilities that any Subsidiary can create, incur, assume
or guarantee.

In the event that, notwithstanding the foregoing, the Trustee or any holder
of Convertible Notes receives any payment or distribution of assets of the
Company of any kind in contravention of any of the terms of the Indenture,
whether in cash, property or securities, including, without limitation by way of
set-off or otherwise, in respect of the Convertible Notes before all Senior Debt
is paid in full, then such payment or distribution will be held by the recipient
in trust for the benefit of holders of Senior Debt, and will be immediately paid
over or delivered to the holders of Senior Debt or their representative or
representatives to the extent necessary to make payment in full of all Senior
Debt remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of Senior Debt.

OPTIONAL REDEMPTION

The Convertible Notes may not be redeemed by the Company prior to
, 2001. The Convertible Notes may be redeemed at the option of the
Company, in whole or from time to time in part, on not less than 15 nor more
than 60 days' prior written notice to the holders thereof by first class mail,
at the following redemption prices (expressed as percentages of principal
amount) if redeemed during the 12-month period beginning           of each year
indicated (          with respect to 2001), plus accrued and unpaid

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interest to the date fixed for redemption, if the closing price of the Common
Stock on the principal stock exchange or market on which the Common Stock is
then quoted or admitted to trading equals or exceeds 125% of the Conversion
Price for at least 20 trading days within a period of 30 consecutive trading
days ending on the fifth trading day prior to the date the notice of redemption
is first mailed to the holders of the Convertible Notes:

REDEMPTION
YEAR                            PRICE
------------------------------------------------    ----------

2001............................................
2002............................................

If less than all the Convertible Notes are to be redeemed at any time,
selection of Convertible Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Convertible Notes are listed or, if the Convertible Notes
are not so listed, on a pro rata basis by lot or by any other method that the
Trustee considers fair and appropriate. The Trustee may select for redemption a
portion of the principal of any Convertible Note that has a denomination larger
than $1,000. Convertible Notes and portions thereof will be redeemed in the
amount of $1,000 or integral multiples of $1,000. The Trustee will make the
selection from Convertible Notes outstanding and not previously called for
redemption; provided that if a portion of a holder's Convertible Notes are
selected for partial redemption and such holder converts a portion of such
Convertible Notes, such converted portion shall be deemed to be taken from the
portion selected for redemption.

.

Provisions of the Indenture that apply to the Convertible Notes called for
redemption also apply to portions of the Convertible Notes called for
redemption. If any Convertible Note is to be redeemed in part, the notice of
redemption will state the portion of the principal amount to be redeemed. Upon
surrender of a Convertible Note that is redeemed in part only, the Company will
execute and the Trustee will authenticate and deliver to the holder a new
Convertible Note equal in principal amount to the unredeemed portion of the
Convertible Note surrendered.

On and after the redemption date, unless the Company shall default in the
payment of the redemption price, interest will cease to accrue on the principal
amount of the Convertible Notes or portions thereof called for redemption and
for which funds have been set apart for payment. In the case of Convertible
Notes or portions thereof redeemed on a redemption date which is also a
regularly scheduled interest payment date, the interest payment due on such date
shall be paid to the person in whose name the Note is registered at the close of
business on the relevant record date.

REPURCHASE AT OPTION OF HOLDERS UPON A DESIGNATED EVENT

Upon the occurrence of a Designated Event, each holder of Convertible Notes
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such holder's Convertible Notes
pursuant to the offer described below (the "Designated Event Offer") at an offer
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest thereon to the date of purchase (the "Designated
Event Payment"). Within 20 days following any Designated Event, the Company will
mail a notice to each holder describing the transaction or transactions that
constitute the Designated Event and offering to repurchase Convertible Notes
pursuant to the procedures required by the Indenture and described in such
notice.

The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Convertible Notes as a result of a Designated Event. Rule
13e-4 under the Exchange Act requires, among other things, the dissemination of
certain information to security holders in the event of an issuer tender offer
and may apply in the event that the repurchase option becomes available to
holders of the Convertible Notes. The Company will comply with this rule to the
extent applicable at that time.

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On the date specified for payment of the Designated Event Payment (the
"Designated Event Payment Date"), the Company will, to the extent lawful, (1)
accept for payment all Convertible Notes or portions thereof properly tendered
pursuant to the Designated Event Offer, (2) deposit with the paying agent an
amount equal to the Designated Event Payment in respect of all Convertible Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Convertible Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of Convertible Notes or portions thereof
being purchased by the Company. The paying agent will promptly mail to each
holder of Convertible Notes so accepted the Designated Event Payment for such
Convertible Notes, and the Trustee will promptly authenticate and mail (or cause
to be transferred by book entry) to each holder a new Convertible Note equal in
principal amount to any unpurchased portion of the Convertible Notes
surrendered, if any; provided that each such new Convertible Note will be in a
principal amount of $1,000 or an integral multiple thereof.

The foregoing provisions would not necessarily afford holders of the
Convertible Notes protection in the event of highly leveraged or other
transactions involving the Company that may adversely affect holders.

The right to require the Company to repurchase Convertible Notes as a
result of a Designated Event could have the effect of delaying, deferring or
preventing a Change of Control or other attempts to acquire control of the
Company unless arrangements have been made to enable the Company to repurchase
all the Convertible Notes at the Designated Event Payment Date. Consequently,
this right may render more difficult or discourage a merger, consolidation or
tender offer (even if such transaction is supported by the Company's Board of
Directors or is favorable to the stockholders), the assumption of control by a
holder of a large block of the Company's shares and the removal of incumbent
management.

Except as described above with respect to a Designated Event, the Indenture
does not contain provisions that permit the holders of the Convertible Notes to
require that the Company repurchase or redeem the Convertible Notes in the event
of a takeover, recapitalization or similar restructuring. Subject to the
limitation on mergers and consolidations described below, the Company, its
management or its Subsidiaries could in the future enter into certain
transactions, including refinancings, certain recapitalizations, acquisitions,
the sale of all or substantially all of its assets, the liquidation of the
Company or similar transactions, that would not constitute a Designated Event
under the Indenture, but that would increase the amount of Senior Debt (or any
other indebtedness) outstanding at such time or substantially reduce or
eliminate the Company's assets. There are no restrictions in the Indenture on
the creation of Senior Debt (or any other indebtedness) and, under certain
circumstances, the incurrence of significant amounts of additional indebtedness
could have an adverse effect on the Company's ability to service its
indebtedness, including the Convertible Notes.

The terms of the Company's existing or future credit or other agreements
relating to indebtedness (including Senior Debt) may prohibit the Company from
purchasing any Convertible Notes and may also provide that a Designated Event,
as well as certain other change-of-control events with respect to the Company,
would constitute an event of default thereunder. In the event a Designated Event
occurs at a time when the Company is prohibited from purchasing Convertible
Notes, the Company could seek the consent of its lenders to the purchase of
Convertible Notes or could attempt to refinance the borrowings that contain such
prohibition. If the Company does not obtain such a consent or repay such
borrowings, the Company would remain prohibited from purchasing Convertible
Notes. In such case, the Company's failure to purchase tendered Convertible
Notes would constitute an Event of Default under the Indenture, which may, in
turn, constitute a further default under the terms of other indebtedness that
the Company has entered into or may enter into from time to time. In such
circumstances, the subordination provisions in the Indenture would likely
restrict payments to the holders of Convertible Notes.

A "Designated Event" will be deemed to have occurred upon a Change of
Control or a Termination of Trading.

A "Change of Control" will be deemed to have occurred when: (i) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act) of shares representing more than 50% of the
combined voting power of the then outstanding securities entitled to vote
generally in elections of directors of the Company ("Voting Stock"), (ii) the
Company consolidates with or merges into any other corporation, or

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conveys, transfers, or leases all or substantially all of its assets to any
person, or any other corporation merges into the Company, and, in the case of
any such transaction, the outstanding Common Stock of the Company is changed or
exchanged as a result, unless the stockholders of the Company immediately before
such transaction own, directly or indirectly immediately following such
transaction, at least a majority of the combined voting power of the outstanding
voting securities of the corporation resulting from such transaction in
substantially the same proportion as their ownership of the Voting Stock
immediately before such transaction, or (iii) any time the Continuing Directors
do not constitute a majority of the Board of Directors of the Company (or, if
applicable, a successor corporation to the Company); provided that a Change of
Control shall not be deemed to have occurred if either (x) the last sale price
of the Common Stock for any five trading days during the ten trading days
immediately preceding the Change of Control is at least equal to 105% of the
Conversion Price in effect on the date of such Change of Control or (y) at least
90% of the consideration (excluding cash payments for fractional shares) in the
transaction or transactions constituting the Change of Control consists of
shares of common stock that are, or upon issuance will be, traded on a United
States national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States.

The definition of Change of Control includes a phrase relating to the
lease, transfer or conveyance of "all or substantially all" of the assets of the
Company. Although there is a developing body of case law interpreting the phrase
"substantially all," there is no precise established definition of the phrase
under applicable law. Accordingly, the ability of a holder of Convertible Notes
to require the Company to repurchase such Convertible Notes as a result of a
lease, transfer or conveyance of less than all of the assets of the Company to
another person or group may be uncertain.

"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.

A "Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock into which the Convertible Notes are then
convertible) is neither listed for trading on a United States national
securities exchange nor approved for trading on an established automated
over-the-counter trading market in the United States.

MERGER AND CONSOLIDATION

The Indenture will provide that the Company may not consolidate or merge
with or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions to, another
corporation, person or entity as an entirety or substantially as an entirety
unless (a) the Company is the surviving corporation or the entity or the person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(b) the entity or person formed by or surviving any such consolidation or merger
(if other than the Company) or the entity or person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Convertible Notes and
the Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (c) immediately after such transaction no Default
or Event of Default exists; and (d) the Company or such person shall have
delivered to the Trustee an officers' certificate and an opinion of counsel,
each stating that such transaction and the supplemental indenture comply with
the Indenture and that all conditions precedent in the Indenture relating to
such transaction have been satisfied.

For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of the
Company, the capital stock of which constitutes all or substantially all of the
properties and assets of the

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Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.

Upon any such consolidation, merger, sale, assignment, conveyance, lease,
transfer or other disposition in accordance with the foregoing, the successor
person formed by such consolidation or into which the Company is merged or to
which such sale, assignment, conveyance, lease, transfer or other disposition is
made will succeed to, and be substituted for, and may exercise every right and
power of, the Company under the Indenture with the same effect as if such
successor had been named as the Company therein, and thereafter (except in the
case of a sale, assignment, transfer, lease, conveyance or other disposition)
the predecessor corporation will be relieved of all further obligations and
covenants under the Indenture and the Convertible Notes.

EVENTS OF DEFAULT AND REMEDIES

An Event of Default is defined in the Indenture as being (i) default in
payment of the principal of, or premium, if any, on the Convertible Notes,
whether or not such payment is prohibited by the subordination provisions of the
Indenture; (ii) default for 30 days in payment of any installment of interest on
the Convertible Notes, whether or not such payment is prohibited by the
subordination provisions of the Indenture; (iii) default by the Company for 60
days after notice in the observance or performance of any other covenants in the
Indenture; (iv) default in the payment of the Designated Event Payment in
respect of the Note on the date therefor, whether or not such payment is
prohibited by the subordination provisions of the Indenture; (v) failure to
provide timely notice of a Designated Event; (vi) failure of the Company or any
Material Subsidiary to make any payment at maturity, including any applicable
grace period, in respect of indebtedness for borrowed money of, or guaranteed or
assumed by, the Company or any Material Subsidiary, which payment is in an
amount in excess of $20,000,000, and continuance of such failure for 30 days
after notice; (vii) default by the Company or any Material Subsidiary with
respect to any such indebtedness, which default results in the acceleration of
any such indebtedness of an amount in excess of $20,000,000 without such
indebtedness having been paid or discharged or such acceleration having been
cured, waived, rescinded or annulled for 30 days after notice; or (viii) certain
events involving bankruptcy, insolvency or reorganization of the Company or any
Material Subsidiary.

If an Event of Default (other than an Event of Default specified in clause
(viii) above with respect to the Company) occurs and is continuing, then and in
every such case the Trustee, by written notice to the Company, or the holders of
not less than 25% in aggregate principal amount of the then outstanding
Convertible Notes, by written notice to the Company and the Trustee, may declare
the unpaid principal of, premium, if any, and accrued and unpaid interest on all
the Convertible Notes then outstanding to be due and payable. Upon such
declaration, such principal amount, premium, if any, and accrued and unpaid
interest will become immediately due and payable, notwithstanding anything
contained in the Indenture or the Convertible Notes to the contrary, but subject
to the provisions limiting payment described in "-- Subordination." If any Event
of Default specified in clause (viii) above occurs with respect to the Company,
all unpaid principal of, and premium, if any, and accrued and unpaid interest on
the Convertible Notes then outstanding will automatically become due and
payable, subject to the provisions described in "-- Subordination," without any
declaration or other act on the part of the Trustee or any holder of Convertible
Notes.

Holders of the Convertible Notes may not enforce the Indenture or the
Convertible Notes except as provided in the Indenture. Subject to the provisions
of the Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request, order or direction of any of the holders, unless such holders have
offered to the Trustee an indemnity satisfactory to it against any loss,
liability or expense. Subject to all provisions of the Indenture and applicable
law, the holders of a majority in aggregate principal amount of the then
outstanding Convertible Notes have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee. If a Default or Event of
Default occurs and is continuing and is known to the Trustee, the Indenture
requires the Trustee to mail a notice of Default or Event of Default to each
holder within 60 days of the occurrence of such Default or Event of Default,
provided, however, that the Trustee may withhold from the holders notice of any
continuing Default or Event of Default

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(except a Default or Event of Default in the payment of principal of, premium,
if any or interest on the Convertible Notes) if it determines that withholding
notice is in their interest. The holders of a majority in aggregate principal
amount of the Convertible Notes then outstanding by notice to the Trustee may
rescind any acceleration of the Convertible Notes and its consequences if all
existing Events of Default (other than the nonpayment of principal of, premium,
if any, and interest on the Convertible Notes that has become due solely by
virtue of such acceleration) have been cured or waived and if the rescission
would not conflict with any judgment or decree of any court of competent
jurisdiction. No such rescission shall affect any subsequent Default or Event of
Default or impair any right consequent thereto.

In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Convertible Notes pursuant
to the optional redemption provisions of the Indenture, an equivalent premium
shall also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the Convertible Notes. If an Event of Default
occurs prior to any date on which the Company is prohibited from redeeming the
Convertible Notes by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Convertible Notes prior to such date, then the
premium specified in the Indenture shall also become immediately due and payable
to the extent permitted by law upon the acceleration of the Convertible Notes.

The holders of a majority in aggregate principal amount of the Convertible
Notes then outstanding may, on behalf of the holders of all the Convertible
Notes, waive any past Default or Event of Default under the Indenture and its
consequences, except Default in the payment of principal of, premium, if any, or
interest on the Convertible Notes (other than the non-payment of principal of,
premium, if any, and interest on the Convertible Notes that has become due
solely by virtue of an acceleration that has been duly rescinded as provided
above) or in respect of a covenant or provision of the Indenture that cannot be
modified or amended without the consent of all holders of Convertible Notes.

The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture and the Company is required, upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.

BOOK-ENTRY; DELIVERY AND FORM

The Convertible Notes will be issued in the form of one or more global
notes (the "Global Note") deposited with, or on behalf of, DTC and registered in
the name of Cede & Co. as DTC's nominees, or will remain in the custody of the
Trustee pursuant to a FAST Balance Certificate Agreement between DTC and the
Trustee. Owners of beneficial interests in the Convertible Notes represented by
the Global Note will hold such interests pursuant to the procedures and
practices of DTC and must exercise any rights in respect of their interests
(including any right to convert or require repurchase of their interests) in
accordance with those procedures and practices. Such beneficial owners will not
be holders for purposes of the Indenture, and will not be entitled to any rights
under the Global Note or the Indenture, with respect to the Global Note, and the
Company and the Trustee, and any of their respective agents, may treat DTC as
the sole holder and owner of the Global Note for all purposes under the
Indenture.

DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities for its participants
and facilitates the clearance and settlement of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct participants include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of

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Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a direct participant, either
directly or indirectly. The rules applicable to DTC and its participants are on
file with the Commission.

Unless and until they are exchanged in whole or in part for certificated
Convertible Notes in definitive form as set forth below, the Global Note may not
be transferred except as a whole by DTC to a nominee of DTC, or by a nominee of
DTC to DTC or another nominee of DTC.

The Convertible Notes represented by the Global Note will not be
exchangeable for certificated Convertible Notes, provided that if DTC is at any
time unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Convertible Notes in definitive form in exchange for the Global
Note. In addition, the Company may at any time in its sole discretion determine
not to have a Global Note, and, in such event, will issue individual Convertible
Notes in definitive form in exchange for the Global Note previously representing
all such Convertible Notes. In either instance, an owner of a beneficial
interest in a Global Note will be entitled to physical delivery of Convertible
Notes in definitive form equal in principal amount to such beneficial interest
and to have such Convertible Notes registered in its name. Individual
Convertible Notes so issued in definitive form will be issued in denominations
of $1,000 and any larger amount that is an integral multiple of $1,000 and will
be issued in registered form only, without coupons.

The laws of some states require that certain persons take physical delivery
in definite form of securities that they own and that security interests in
negotiable instruments can only be perfected by delivery of certificates
representing the instruments. Consequently, the ability to transfer Convertible
Notes evidenced by the Global Note will be limited to such extent.

Payments of principal of and interest on the Convertible Notes will be made
by the Company through the Trustee to DTC or its nominee, as the case may be, as
the registered owner of the Global Note. Neither the company nor the Trustee
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of the Global
Note or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. The Company expects that DTC, upon receipt of
any payment of principal or interest in respect of the Global Note, will credit
the accounts of the related participants with payment in amounts proportionate
to their respective holdings in principal amount of beneficial interest in the
Global Note as shown on the records of DTC. The Company also expects that
payments by participants to owners of beneficial interests in the Global Note
will be covered by standing customer instructions and customary practices, as is
now the case with securities held for the accounts of customers in bearer form
or registered in "street name," and will be the responsibility of such
participants.

So long as the Convertible Notes are represented by a Global Note, DTC or
its nominee will be the only entity that can exercise a right to repayment
pursuant to the holder's option to elect repayment of its Convertible Notes or
the right of conversion of the Convertible Notes. Notice by participants or by
owners of beneficial interests in a Global Note held through such participants
of the exercise of the option to elect repayment, or the right of conversion, of
beneficial interests in Convertible Notes represented by the Global Note must be
transmitted to DTC in accordance with its procedures on a form required by DTC
and provided to participants. In order to ensure that DTC's nominee will timely
exercise a right to repayment, or the right of conversion, with respect to a
particular Convertible Note, the beneficial owner of such Convertible Notes must
instruct the broker or other participant through which it holds an interest in
such Convertible Notes to notify DTC of its desire to exercise a right to
repayment, or the right of conversion. Different firms have different cut-off
times for accepting instructions from their customers and, accordingly, each
beneficial owner should consult the broker or other participant through which it
holds an interest in a Convertible Note in order to ascertain the cut-off time
by which such an instruction must be given in order for timely notice to be
delivered to DTC. The Company will not be liable for any delay in delivery of
such notice to DTC.

The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable. The
Company will have no responsibility for the

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performance by DTC or its participants of their respective obligations as
described hereunder or under the rules and procedures governing their respective
operations.

Neither the Company nor the Trustee shall be liable for any delay by DTC or
any participant or indirect participant in DTC in identifying the beneficial
owners of the Convertible Notes, and the Company and the Trustee may
conclusively rely on, and shall be protected in relying on, instructions from
DTC for all purposes (including with respect to the registration and delivery,
and the respective principal amounts, of the Convertible Notes to be issued).

AMENDMENT, SUPPLEMENT AND WAIVER

Except as provided in the next two succeeding paragraphs, the Indenture or
the Convertible Notes may be amended or supplemented with the consent of the
holders of at least a majority in principal amount of the Convertible Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for Convertible Notes), and any existing default or compliance
with any provision of the Indenture or the Convertible Notes may be waived with
the consent of the holders of a majority in principal amount of the then
outstanding Convertible Notes (including consents obtained in connection with a
tender offer or exchange offer for Convertible Notes).

Without the consent of each holder affected, an amendment or waiver may not
(with respect to any Convertible Notes held by a non-consenting holder): (a)
reduce the principal amount of Convertible Notes whose holders must consent to
an amendment, supplement or waiver, (b) reduce the principal of or change the
fixed maturity of any Convertible Note or, other than as set forth in the next
paragraph, alter the provisions with respect to the redemption of the
Convertible Notes, (c) reduce the rate of or change the time for payment of
interest on any Convertible Notes, (d) waive a Default or Event of Default in
the payment of principal of or premium, if any, or interest on the Convertible
Notes (except a rescission of acceleration of the Convertible Notes by the
holders of at least a majority in aggregate principal amount of the Convertible
Notes and a waiver of the payment default that resulted from such acceleration),
(e) make any Convertible Note payable in money other than that stated in the
Indenture and the Convertible Notes, (f) make any change in the provisions of
the Indenture relating to waivers of past Defaults or the rights of holders of
Convertible Notes to receive payments of principal of, premium, if any, or
interest on the Convertible Notes, (g) waive a redemption payment with respect
to any Convertible Note, (h) make any change in the foregoing amendment and
waiver provisions or (i) except as permitted by the Indenture, increase the
Conversion Price or, other than as set forth in the next paragraph, modify the
provisions of the Indenture relating to conversion of the Convertible Notes in a
manner adverse to the holders thereof. In addition, any amendment to the
provisions of Article 11 of the Indenture (which relate to subordination) will
require the consent of the holders of at least 75% in aggregate principal amount
of the Convertible Notes then outstanding if such amendment would adversely
affect the rights of holders of Convertible Notes.

Notwithstanding the foregoing, without the consent of any holder of
Convertible Notes, the Company and the Trustee may amend or supplement the
Indenture or the Convertible Notes to (a) cure any ambiguity, defect or
inconsistency provided such amendment does not materially and adversely affect
the Convertible Notes, (b) provide for uncertificated Convertible Notes in
addition to or in place of certificated Convertible Notes, (c) provide for the
assumption of the Company's obligations to holders of Convertible Notes in the
circumstances required under the Indenture as described under "-- Merger and
Consolidation," (d) provide for conversion rights of holders of Convertible
Notes in certain events such as a consolidation, merger or sale of all or
substantially all of the assets of the Company, (e) reduce the Conversion Price,
(f) make any change that would provide any additional rights or benefits to the
holders of Convertible Notes or that does not adversely affect the legal rights
under the Indenture of any such holder, or (g) comply with requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the TIA.

SATISFACTION AND DISCHARGE

The Company may discharge its obligations under the Indenture while
Convertible Notes remain outstanding if (i) all outstanding Convertible Notes
will become due and payable at their scheduled maturity

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within one year or (ii) all outstanding Convertible Notes are scheduled for
redemption within one year, and, in either case, the Company has (a) deposited
with the Trustee an amount sufficient to pay and discharge all outstanding
Convertible Notes on the date of their scheduled maturity or the scheduled date
of redemption and (b) paid all other sums then payable by the Company under the
Indenture.

GOVERNING LAW

The Indenture will provide that the Convertible Notes will be governed by,
and construed in accordance with, the laws of the State of New York without
giving effect to applicable principles of conflicts of law.

TRANSFER AND EXCHANGE

A holder may transfer or exchange Convertible Notes in accordance with the
Indenture. The Registrar and the Trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Convertible Note selected for redemption or repurchase. Also, the Company is
not required to transfer or exchange any Convertible Note for a period of 15
days before a selection of Convertible Notes to be redeemed.

The registered holder of a Convertible Note will be treated as the owner of
it for all purposes.

THE TRUSTEE

The Indenture will provide that, except during the continuance of an Event
of Default, the Trustee will perform only such duties as are specifically set
forth in the Indenture. In case an Event of Default shall occur (and shall not
be cured) and holders of the Convertible Notes have notified the Trustee, the
Trustee will be required to exercise its powers with the degree of care and
skill of a prudent person in the conduct of such person's own affairs. Subject
to such provisions, the Trustee is under no obligation to exercise any of its
rights or powers under the Indenture at the request of any of the holders of
Convertible Notes, unless they shall have offered to the Trustee security and
indemnity satisfactory to it.

The Indenture and the TIA will contain certain limitations on the rights of
the Trustee, should it become a creditor of the Company, to obtain payment of
claims in certain cases or to realize on certain property received in respect of
any such claim as security or otherwise. Subject to the TIA, the Trustee will be
permitted to engage in other transactions, provided, however, that if it
acquires any conflicting interest (as described in the TIA), it must eliminate
such conflict or resign.

CERTAIN DEFINITIONS

"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.

"Designated Senior Debt" means any particular Senior Debt if the instrument
creating or evidencing the same or the assumption or guarantee thereof (or
related agreements or documents to which the Company is a party) expressly
provides that such Indebtedness shall be "Designated Senior Debt" for purposes
of the Indenture (provided that such instrument, agreement or other document may
place limitations and conditions on the right of such Senior Debt to exercise
the rights of Designated Senior Debt).

"Event of Default" has the meaning set forth under "-- Events of Default
and Remedies" herein.

"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect from time to time.

"Indebtedness" means, with respect to any person, all obligations, whether
or not contingent, of such person (i) (a) for borrowed money (including, but not
limited to, any indebtedness secured by a security interest, mortgage or other
lien on the assets of the Company that is (1) given to secure all or part of the
purchase price of property subject thereto, whether given to the vendor of such
property or to another, or (2) existing on property at the time of acquisition
thereof), (b) evidenced by a note, debenture, bond or other written instrument,
(c) under a lease required to be capitalized on the balance sheet of the lessee
under

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GAAP or under any lease or related document (including a purchase agreement)
that provides that the Company is contractually obligated to purchase or cause a
third party to purchase and thereby guarantee a minimum residual value of the
lease property to the lessor and the obligations of the Company under such lease
or related document to purchase or to cause a third party to purchase such
leased property, (d) in respect of letters of credit, bank guarantees or
bankers' acceptances (including reimbursement obligations with respect to any of
the foregoing), (e) with respect to Indebtedness secured by a mortgage, pledge,
lien, encumbrance, charge or adverse claim affecting title or resulting in an
encumbrance to which the property or assets of such person are subject, whether
or not the obligation secured thereby shall have been assumed by or shall
otherwise be such person's legal liability, (f) in respect of the balance of
deferred and unpaid purchase price of any property or assets, (g) under interest
rate or currency swap agreements, cap, floor and collar agreements, spot and
forward contracts and similar agreements and arrangements; (ii) with respect to
any obligation of others of the type described in the preceding clause (i) or
under clause (iii) below assumed by or guaranteed in any manner by such person
or in effect guaranteed by such person through an agreement to purchase
(including, without limitation, "take or pay" and similar arrangements),
contingent or otherwise (and the obligations of such person under any such
assumptions, guarantees or other such arrangements); and (iii) any and all
deferrals, renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any of the foregoing.

"Issue Date" means the date on which the Convertible Notes are originally
issued under the Indenture.

"Material Subsidiary" means any Subsidiary of the Company which at the date
of determination is a "significant subsidiary" as defined in Rule 1-02(w) of
Regulation S-X under the Securities Act and the Exchange Act.

"Maturity Date" means             , 2003.

"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

"Person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization, limited liability company or
government or any agency or political subdivision thereof.

"Senior Debt" means the principal of, premium, if any, and interest on,
rent under, and any other amounts payable on or in or in respect of any
Indebtedness of the Company (including, without limitation, any Obligations in
respect of such Indebtedness and, in the case of Designated Senior Debt, any
interest accruing after the filing of a petition by or against the Company under
any bankruptcy law, whether or not allowed as a claim after such filing in any
proceeding under such bankruptcy law), whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed, guaranteed or in effect
guaranteed by the Company (including all deferrals, renewals, extensions or
refundings of, or amendments, modifications or supplements to the foregoing);
provided, however, that Senior Debt does not include (v) Indebtedness evidenced
by the Convertible Notes, (w) any liability for federal, state, local or other
taxes owed or owing by the Company, (x) Indebtedness of the Company to any
Subsidiary of the Company except to the extent such Indebtedness is of a type
described in clause (ii) of the definition of Indebtedness, (y) trade payables
of the Company for goods, services or materials purchased in the ordinary course
of business (other than, to the extent they may otherwise constitute such trade
payables, any obligations of the type described in clause (ii) of the definition
of Indebtedness), and (z) any particular Indebtedness in which the instrument
creating or evidencing the same expressly provides that such Indebtedness shall
not be senior in right of payment to, or is pari passu with, or is subordinated
or junior to, the Convertible Notes.

"Subsidiary" means, with respect to any person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of that person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such person or a Subsidiary of such person or (b)
the only general partners of which are such person or of one or more
Subsidiaries of such person (or any combination thereof).

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offerings, there has been no market for the Common Stock and
there is no assurance that a significant public market for the Common Stock will
develop or be sustained after the Offerings. 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.

Upon the closing of the Offerings, the Company will have outstanding
shares of Common Stock based upon shares outstanding as of
, 1998. In addition to the           shares of Common Stock offered hereby
(          if the Underwriters' over-allotment options are exercised in full),
upon the closing of the Offerings, there will be             shares of Common
Stock issuable upon conversion of the Convertible Notes, all of which will be
freely tradeable. In addition, in connection with market-making activities in
the Convertible Notes, for a period up to   months Smith Barney Inc. may from
time to time borrow, return and reborrow up to 3.0 million shares of Common
Stock from Mr. James Kim and Mrs. Agnes Kim of the Company pursuant to a
securities loan agreement (the "Securities Loan Agreement"), which shares may
from time to time be sold in the market in connection with such market-making
activities pursuant to a Form S-1 registration statement (No. 333-          )
(the "Securities Loan Registration Statement") filed by the Company under the
Securities Act of 1933, as amended (the "Securities Act"). At the end of such
period, the shares of Common Stock borrowed and returned to such affiliate (the
"Control Shares") may be resold from time to time by such affiliate 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           additional shares of Common Stock will
be outstanding upon the closing of the Offerings, (excluding             shares
issuable upon the exercise of outstanding options), 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 (up to             shares of
Common Stock immediately after the consummation of the Offerings) 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.

The Company has 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 the date hereof without the prior written consent of Smith Barney
Inc., 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 the
date hereof other than pursuant to the Securities Loan Agreement or with the
prior written consent of Smith Barney Inc., subject to certain limited
exceptions. See "Underwriting."

Beginning one year from the date of the Reorganization, approximately
Restricted Shares subject to the lock-up agreements will become
eligible for sale in the public market pursuant to Rule 144.

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The Company plans to grant options to purchase             shares of Common
Stock prior to the Offerings under the 1998 Stock Plan and the 1998 Directors
Stock Option Plan. See "Management -- Stock Plans." The Company intends to file,
within             days after the date of this Prospectus, 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 Stock
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.

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CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES

TO HOLDERS OF COMMON STOCK AND CONVERTIBLE NOTES

GENERAL

The following is a general discussion of certain United States federal
income and estate tax considerations relating to the ownership and disposition
of Common Stock and Convertible Notes by a holder who acquires and owns such
Common Stock or a Convertible Note as a capital asset within the meaning of
Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This
discussion does not consider specific facts and circumstances that may be
relevant to a particular holder's tax position, does not address all aspects of
United States federal income and estate taxes and does not deal with foreign,
state, and local consequences and United States federal gift taxes that may be
relevant to such holders in light of their personal circumstances. Further, it
does not discuss the rules applicable to holders subject to special tax
treatment under the federal income tax laws (including but not limited to,
banks, insurance companies, dealers in securities, holders of securities held as
part of a "straddle," "hedge," or "conversion transaction," and persons who
undertake a constructive sale of Common Stock or a Convertible Note). In
addition, this discussion is limited to original purchasers of Convertible
Notes, who acquire their Convertible Notes at their original issue price within
the meaning of Section 1273 of the Code, and Common Stock. Furthermore, this
discussion is based on current provisions of the Code, existing and proposed
regulations promulgated thereunder and administrative and judicial
interpretations thereof, all of which are subject to change, possibly on a
retroactive basis. Accordingly, each prospective purchaser of Common Stock or
Convertible Notes is advised to consult a tax advisor with respect to current
and possible future tax consequences of acquiring, holding, and disposing of
Common Stock or Convertible Notes.

U.S. HOLDERS

The following discussion is limited to a holder of Common Stock or a
Convertible Note that for United States federal income tax purposes is (i) a
citizen or resident (within the meaning of Section 7701(b) of the Code) of the
United States, (ii) a corporation, partnership or other entity created or
organized in the United States or under the laws of the United States or of any
state, (iii) an estate whose income is includible in gross income for United
States federal income tax purposes, regardless of its source, or (iv) in
general, a trust subject to the primary supervision of a court within the United
States and the control of a United States person as described in Section
7701(a)(30) of the Code (a "U.S. Holder").

Interest

Stated interest on the Convertible Notes will generally be includable in a
U.S. Holder's gross income and taxable as ordinary income for U.S. federal
income tax purposes at the time it is paid or accrued in accordance with the
U.S. Holder's regular method of accounting.

Conversion of Convertible Notes Into Common Stock

A U.S. Holder generally will not recognize any income, gain or loss upon
conversion of a Note into Common Stock except to the extent the Common Stock is
considered attributable to accrued interest not previously included in income
(which is taxable as ordinary income) or with respect to cash received in lieu
of a fractional share of Common Stock. The adjusted basis of shares of Common
Stock received on conversion will equal the adjusted basis of the Convertible
Note converted (reduced by the portion of adjusted basis allocated to any
fractional share of Common Stock exchanged for cash), and the holding period of
the Common Stock received on conversion will generally include the period during
which the converted Convertible Notes were held. However, a U.S. Holder's tax
basis in shares of Common Stock considered attributable to accrued interest as
described above generally will equal the amount of such accrued interest
included in income, and the holding period for such shares shall begin as of the
date of conversion.

The conversion price of the Convertible Notes is subject to adjustment
under certain circumstances. Section 305 of the Code and the Treasury
Regulations issued thereunder may treat the holders of the

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Convertible Notes as having received a constructive distribution, resulting in
ordinary income (subject to a possible dividends received deduction in the case
of corporate holders) to the extent of the Company's current or accumulated
earnings and profits, if, and to the extent that, certain adjustments in the
conversion price that may occur in limited circumstances (particularly and
adjustment to reflect a taxable dividend to holders of Common Stock) increase
the proportionate interest of a holder of Convertible Notes in the fully diluted
Common Stock, whether or not such holder ever exercises its conversion
privilege. Moreover, if there is not a full adjustment to the conversion ratio
of the Convertible Notes to reflect a stock dividend or other event increasing
the proportionate interest of the holders of outstanding Common Stock in the
assets or earnings and profits of the Company, then such increase in the
proportionate interest of the holders of the Common Stock generally will be
treated as a distribution to such holders, taxable as ordinary income (subject
to a possible dividends received deduction in the case of corporate holders) to
the extent of the Company's current or accumulated earnings and profits..

Sale, Exchange or Retirement of a Convertible Note

Each U.S. Holder generally will recognize gain or loss upon the sale,
exchange, redemption, retirement or other disposition of a Convertible Note
measured by the difference (if any) between (i) the amount of cash and the fair
market value of any property received (except to the extent that such cash or
other property is attributable to the payment of accrued interest not previously
included in income, which amount will be taxable as ordinary income) and (ii)
such holder's adjusted tax basis in the Convertible Note. Any such gain or loss
recognized on the sale, exchange, redemption, retirement or other disposition of
a Convertible Note will be capital gain or loss. Gain on most capital assets
held or deemed held by an individual for more than 18 months is subject to a
maximum rate of tax of 20%, and gain on most capital assets held or deemed held
by an individual more than one year and up to 18 months is subject to tax at a
maximum rate of 28%. A U.S. Holder's initial basis in a Convertible Note will be
the amount paid therefor.

The Common Stock

In general, dividends paid from current or accumulated earnings and profits
of the Company, as determined for U.S. federal income tax purposes, will be
included in a U.S. Holder's income as ordinary income (subject to a possible
dividends received deduction in the case of corporate holders) as they are paid.
Gain or loss realized on the sale or exchange of Common Stock will equal the
difference between the amount realized on such sale or exchange and the U.S.
Holder's adjusted tax basis in such Common Stock. Gain on most capital assets
held by an individual for more than 18 months is subject to tax at a maximum
rate of 20% and gain on most capital assets held by an individual for more than
one year and up to 18 months is subject to tax at a maximum rate of 28%.

Information Reporting and Backup Withholding

A U.S. Holder of Common Stock or a Convertible Note may be subject to
"backup withholding" at a rate of 31% with respect to certain "reportable
payments," including dividend payments, interest payments, and, under certain
circumstances, principal payments on the Convertible Notes. These backup
withholding rules apply if the holder, among other things, (i) fails to furnish
a social security number or other taxpayer identification number ("TIN")
certified under penalties of perjury within a reasonable time after the request
therefor, (ii) furnishes an incorrect TIN, (iii) fails to report properly
interest or dividends, or (iv) under certain circumstances, fails to provide a
certified statement, signed under penalties of perjury, that the TIN furnished
is the correct number and that such holder is not subject to backup withholding.
A holder who does not provide the Company with its correct TIN also may be
subject to penalties imposed by the IRS. Any amount withheld from a payment to a
U.S. Holder under the backup withholding rules is creditable against the
holder's federal income tax liability, provided that the required information is
furnished to the IRS. Backup withholding will not apply, however, with respect
to payments made to certain U.S. Holders, including corporations and tax-exempt
organizations, provided their exemptions from backup withholding are properly
established.

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The Company will report to the U.S. Holders of Convertible Notes and Common
Stock and to the IRS the amount of any "reportable payments" for each calendar
year and the amount of tax withheld, if any, with respect to such payments.

NON U.S. HOLDERS

The following discussion is limited to the U.S. federal income tax
consequences relevant to a Non-U.S. Holder. As used herein, the term "Non-U.S.
Holder" means any holder other than a U.S. Holder. For purposes of withholding
tax on interest and dividends discussed below, a Non-U.S. Holder includes a non-
resident fiduciary of an estate or trust. For purposes of the following
discussion, interest, dividends and gain on the sale, exchange or other
disposition of a Convertible Note or Common Stock will generally be considered
to be "U.S. trade or business income" if such income or gain is (i) effectively
connected with the conduct of a U.S. trade or business or (ii) in the case of
most treaty residents, attributable to a permanent establishment (or, in the
case of an individual, a fixed base) in the United States.

Interest

Generally, any interest paid to a Non-U.S. Holder of a Convertible Note
that is not U.S. trade or business income will not be subject to U.S. tax if the
interest qualifies as "portfolio interest." Interest on the Convertible Notes
will generally qualify as portfolio interest if (i) the Non-U.S. Holder does not
actually or constructively own 10% or more of the total voting power of all
voting stock of the Company and is not a "controlled foreign corporation" with
respect to which the Company is a "related person" within the meaning of the
Code, and (ii) the beneficial owner, under penalty of perjury, certifies that
the beneficial owner is not a U.S. person and such certificate provides the
beneficial owner's name and address.

The gross amount of payments of interest to a Non-U.S. Holder that do not
qualify for the portfolio interest exemption and that are not U.S. trade or
business income will be subject to withholding of U.S. federal income tax at a
30% rate, unless a U.S. income tax treaty applies to reduce or eliminate the
rate of withholding. Interest that is U.S. trade or business income will be
subject to United States federal income tax on a net income basis at applicable
graduated individual or corporate rates and would be exempt from the 30%
withholding tax described above. In the case of a Non-U.S. Holder that is a
corporation, interest that is U.S. trade or business income may, under certain
circumstances, be subject to an additional "branch profits tax" at a 30% rate or
such lower rate as may be specified by an applicable income tax treaty. To claim
the benefit of a tax treaty or to claim an exemption from withholding for
interest that is U.S. trade or business income, the Non-U.S. Holder must provide
a properly executed Form 1001 or Form 4224 (or such successor form as the IRS
designates), as applicable, prior to the payment of interest. Under recently
adopted Treasury Regulations that will generally be effective after December 31,
1998 (the "New Regulations"), a Non-U.S. Holder, subject to certain transition
rules, will instead be required to provide a properly executed Form W-8,
certifying to such U.S. Holder's entitlement to treaty benefits or exemption
from withholding for U.S. trade or business income. Special procedures are
provided in the New Regulations for payments through qualified intermediaries.
Other recently adopted Treasury Regulations that will be effective with respect
to payments made after December 31, 1997 (the "Treaty Regulations") provide
special rules applicable to certain entities that are treated as partnerships
for U.S. purposes but as corporations for foreign tax purposes, for purposes of
determining the applicability of a tax treaty. Prospective investors should
consult their tax advisors regarding the effect, if any, of the New Regulations
and the Treaty Regulations on an investment in a Convertible Note or Common
Stock. Prospective investors should consult their tax advisors regarding the
effect, if any, of the New Regulations and the Treaty Regulations on an
investment in the Common Stock or a Convertible Note.

Conversion of Convertible Notes into Common Stock

A Non-U.S. Holder generally will not be subject to U.S. federal income tax
on the conversion of Convertible Notes into Common Stock, except with respect to
cash (if any) received in lieu of a fractional share or interest not previously
included in income. Cash received in lieu of a fractional share may give rise to
gain that would be subject to the rules described below for the sale of
Convertible Notes. Cash or Common Stock treated as isued for accrued interest
would be treated as interest under the rules described above.

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Dividends

In general, dividends paid to a Non-U.S. Holder of Common Stock will be
subject to withholding of United States federal income tax at a 30% rate or such
lower rate as may be specified by an applicable income tax treaty, unless the
dividends are U.S. trade or business income. If the dividend is U.S. trade or
business income, the dividend would be subject to United States federal income
tax on a net income basis at applicable graduated individual or corporate rates
and would be exempt from the 30% withholding tax described above. Any such
dividends that are U.S. trade or business income received by a foreign
corporation may, under certain circumstances, be subject to the additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. Certain certification and disclosure requirements
must be complied with in order to be exempt from withholding under the U.S.
trade or business income exemption discussed above (which requirements have been
modified by the New Regulations).

Under current United States Treasury regulations, dividends paid to a
stockholder at an address in a foreign country are presumed to be paid to a
resident of such country for purposes of the withholding discussed above (unless
the payor has knowledge to the contrary), including for purposes of determining
the applicability of a tax treaty rate. Under the New Regulations, to obtain a
reduced rate of withholding under a treaty, a Non-U.S. Holder would generally be
required to provide an Internal Revenue Service Form W-8 (or suitable substitute
form) certifying such Non-U.S. Holder's entitlement to benefits under a treaty.
These certification requirements may be relaxed somewhat in the case of a
Non-U.S. Holder who holds Common Stock through an account maintained at a
non-U.S. office of a financial institution. Certain other special rules may be
applicable to a Non-U.S. Holder under the New Regulation or the Treaty
Regulations. See "-- Non-U.S. Holders -- Interest".

A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
United States withholding tax pursuant to a tax treaty or whose dividends have
otherwise been subjected to withholding in an amount that exceeds such holder's
United States federal income tax liability, may obtain a refund or credit of any
excess amounts withheld by filing an appropriate claim for refund with the
United States Internal Revenue Service (the "Service").

Gain on Disposition of Common Stock or a Convertible Note

A Non-U.S. Holder generally will not be subject to United States federal
income tax with respect to gain realized on a sale or other disposition of
Common Stock or a Convertible Note unless (i) the gain is U.S. trade or business
income, (ii) in the case of a Non-U.S. Holder who is a nonresident alien
individual and holds Common Stock or a Convertible Note as a capital asset, such
holder is present in the United States for 183 or more days in the taxable year
of the sale or other disposition and certain other conditions are met, (iii) the
Non-U.S. Holder is subject to tax pursuant to provisions of United States tax
law that apply to certain expatriates, or (iv) under certain circumstances, in
the case of disposition of Common Stock if the Company is or has been during
certain time periods a "U.S. real property holding corporation" for United
States federal income tax purposes. The Company is not and does not anticipate
becoming a "U.S. real property holding corporation" for United States federal
income tax purposes.

Federal Estate Taxes

Common Stock that is owned, or treated as owned, by a non-resident alien
individual (as specifically determined under residence rules for United States
federal estate tax purposes) at the time of death or that has been the subject
of certain lifetime transfers will be included in such holder's gross estate for
United States federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise. A Convertible Note that is owned, or treated as
owned, by a non-resident alien individual (as specifically determined under
residence rules for United States federal estate tax purposes) at the time of
death will not be subject to U.S. federal estate tax provided that the interest
thereon qualifies as portfolio interest and was not U.S. trade or business
income.

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United States Information Reporting and Backup Withholding Tax

The Company must report annually to the Service and to each Non-U.S. Holder
the amount of dividends or interest paid to such holder and any tax withheld
with respect to such dividends or interest. These information reporting
requirements apply regardless of whether withholding is required. Copies of the
information returns reporting such dividends and interest and withholding with
respect thereof may also be made available under the provisions of an applicable
treaty or agreement, to the tax authorities in the country in which such
Non-U.S. Holder resides.

Treasury Regulations provide that backup withholding and additional
information reporting will not apply to payments of principal on the Convertible
Notes by the Company to a Non-U.S. Holder if the holder certifies as to its
Non-U.S. status under penalties of perjury or otherwise establishes an exemption
(provided that neither the Company nor its paying agent has actual knowledge
that the holder is a U.S. person or that the conditions of any other exemption
are not, in fact, satisfied.) United States backup withholding tax (which
generally is a withholding tax imposed at the rate of thirty-one percent (31%)
on certain payments to persons that fail to furnish certain information under
the United States information reporting requirements) generally will not apply
to dividends paid on Common Stock to a Non-U.S. Holder at an address outside the
United States, except that with regard to payments made after December 31, 1998,
a Non-U.S. Holder will be entitled to such an exemption only if it provides a
Form W-8 (or satisfies certain documentary evidence requirements for
establishing that it is a non-United States person) or otherwise establishes an
exemption. Except as provided below, Non-U.S. Holders will not be subject to
backup withholding with respect to the payment of proceeds from the disposition
of Common Stock or Convertible Notes effected by the foreign office of a broker;
except that if the broker is a United States person or a "U.S. related person,"
information reporting (but not backup withholding) is required with respect to
the payment, unless the broker has documentary evidence in its files that the
owner is a Non-U.S. Holder (and the broker has no actual knowledge to the
contrary) and certain other requirements are met or the holder otherwise
establishes an exemption. For this purpose, a "U.S. related person" is (i) a
"controlled foreign corporation" for United States federal income tax purposes,
(ii) a foreign person 50% or more of whose gross income from all sources for the
three-year period ending with the close of its taxable year preceding the
collection or payment of such proceeds (or for such part of the period that the
broker has been in existence) is derived from activities that are effectively
connected with the conduct of a United States trade or business, or (iii) with
respect to payments made after December 31, 1998, a foreign partnership that, at
any time during its taxable year is 50% or more (by income or capital interest)
owned by U.S. persons or is engaged in the conduct of a U.S. trade or business.
The payment of the proceeds of a sale of shares of Common Stock or of a
Convertible Note to or through a United States office of a broker is subject to
information reporting and possible backup withholding unless the owner certifies
its non-United States status under penalties of perjury or otherwise establishes
an exemption. Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules from a payment to a Non-U.S. Holder will be
allowed as a refund or a credit against such Non-U.S. Holder's United States
federal income tax liability, provided that the required information is
furnished to the Service.

THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY.
ACCORDINGLY, EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT WITH HIS TAX ADVISOR
WITH RESPECT TO THE UNITED STATES FEDERAL INCOME TAX AND FEDERAL ESTATE TAX
CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF COMMON STOCK AND CONVERTIBLE
NOTES, INCLUDING THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, LOCAL,
FOREIGN, OR OTHER TAXING JURISDICTION.

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UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement
(the "U.S. Underwriting Agreement") among the Company, the Selling Stockholders
and each of the underwriters named below (the "U.S. Underwriters"), for whom
Smith Barney Inc., BancAmerica Robertson Stephens and Cowen & Company are acting
as representatives (the "U.S. Representatives"), (i) the Company and the Selling
Stockholders have agreed to sell to each of the U.S. Underwriters and each of
the U.S. Underwriters has severally agreed to purchase from the Company and the
Selling Stockholders the aggregate number of Shares set forth opposite its name
in the table below and (ii) the Company has agreed to sell to certain of the
U.S. Underwriters and each such U.S. Underwriter has severally agreed to
purchase from the Company the principal amount of the Convertible Notes set
forth opposite its name below.

PRINCIPAL
AMOUNT
OF
NUMBER OF   CONVERTIBLE
U.S. UNDERWRITERS                   SHARES       NOTES
------------------------------------------------  ---------   ----------

Smith Barney Inc. ..............................
BancAmerica Robertson Stephens..................
Cowen & Company.................................
---------   ----------
Total.................................
========     ========

The U.S. Underwriting Agreement provides that the obligations of the U.S.
Underwriters to purchase the Shares and Convertible Notes listed above are
subject to certain conditions set forth therein. The U.S. Underwriters are
committed to purchase all of the Shares and Convertible Notes offered by this
Prospectus (other than those covered by the over-allotment options described
below), if any Shares or Convertible Notes are purchased. In the event of
default by any U.S. Underwriter, the U.S. Underwriting Agreement provides that,
in certain circumstances, the purchase commitments of the non-defaulting U.S.
Underwriters may be increased or the U.S. Underwriting Agreement may be
terminated.

The U.S. Representatives have advised the Company and the Selling
Stockholders that the U.S. Underwriters propose initially to offer such Shares
to the public at the initial public offering price thereof set forth on the
cover page of this Prospectus, and to certain dealers at such price less a
discount not in excess of $          per share. The U.S. Underwriters may allow,
and such dealers may reallow, a discount not in excess of $          per share
on sales to certain other dealers. After the Offerings, the public offering
price and such discounts may be changed.

The U.S. Representatives have also advised the Company that the relevant
U.S. Underwriters propose initially to offer such Convertible Notes to the
public at the initial public offering price thereof set forth on the cover page
of this Prospectus, and to certain dealers at such price less a concession not
in excess of   % of the principal amount of such Convertible Notes. The relevant
U.S. Underwriters may allow, and such dealers may reallow, a discount not in
excess of   % of the principal amount of the Convertible Notes on sales to
certain other dealers. After the initial public offering of the Convertible
Notes, the public offering price and such concessions may be changed.

The Company and the Selling Stockholders also have entered into an
underwriting agreement (the "International Underwriting Agreement") with the
International Underwriters named therein, for whom Smith Barney Inc.,
BancAmerica Robertson Stephens International Limited and Cowen International
L.P. are acting as representatives (the "International Representatives" and,
together with the U.S. Representatives, the "Representatives"), providing for
the concurrent offer and sale of           of the Shares and $
principal amount of the Convertible Notes outside the U.S. and Canada.

The closing with respect to the sale of the Shares and the Convertible
Notes pursuant to the U.S. Underwriting Agreement is a condition to the closing
with respect to the sale of the Shares and the Convertible Notes pursuant to the
International Underwriting Agreement, and the closing with respect to the sale
of the Shares and the Convertible Notes pursuant to the International
Underwriting Agreement is a condition to the closing with respect to the sale of
the Shares and the Convertible Notes pursuant to the

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U.S. Underwriting Agreement. The initial public offering price and underwriting
discounts per Share and per Convertible Note for the U.S. Offering and the
International Offering will be identical.

Each U.S. Underwriter has severally agreed that, as part of the
distribution of the           Shares and $          principal amount of the
Convertible Notes by the U.S. Underwriters, (i) it is not purchasing any Shares
or Convertible Notes for the account of anyone other than a United States or
Canadian Person, (ii) it has not offered or sold, and will not offer or sell,
directly or indirectly, any Shares or Convertible Notes or distribute any
Prospectus relating to the U.S. Offering to any person outside of the United
States or Canada, or to anyone other than a United States or Canadian Person and
(iii) any dealer to whom it may sell any Shares or Convertible Notes will
represent that it is not purchasing for the account of anyone other than a
United States or Canadian Person and agree that it will not offer or resell,
directly or indirectly, any Shares or Convertible Notes outside of the United
States or Canada, or to anyone other than a United States or Canadian Person or
to any other dealer who does not so represent and agree.

Each International Underwriter has severally agreed that, as part of the
distribution of the           Shares and $       principal amount of the
Convertible Notes by the International Underwriters, (i) it is not purchasing
any Shares or Convertible Notes for the account of any United States or Canadian
Person, (ii) it has not offered or sold, and will not offer or sell, directly or
indirectly, any Shares or Convertible Notes or distribute any Prospectus to any
person in the United States or Canada, or to any United States or Canadian
Person and (iii) any dealer to whom it may sell any Shares or Convertible Notes
will represent that it is not purchasing for the account of any United States or
Canadian Person and agree that it will not offer or resell, directly or
indirectly, any Shares or Convertible Notes in the United States or Canada, or
to any United States or Canadian Person or to any other dealer who does not so
represent and agree.

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Agreement Between U.S. Underwriters
and International Underwriters. "United States or Canadian Persons" means any
person who is a national or resident of the United States or Canada, any
corporation, partnership or other entity created or organized in or under the
laws of the United States or Canada or of any political subdivision thereof, and
any estate or trust the income of which is subject to United States or Canadian
federal income taxation, regardless of its source (other than a foreign branch
of such entity) and includes any United States or Canadian branch of a person
other than a United States or Canadian Person.

Each U.S. Underwriter that will offer or sell Shares or Convertible Notes
in Canada as part of the distribution has severally agreed that such offers and
sales will be made only pursuant to an exemption from the prospectus
requirements in each jurisdiction in Canada in which such offers and sales are
made.

Pursuant to the Agreement Between U.S. Underwriters and International
Underwriters, sales may be made between the U.S. Underwriters and the
International Underwriters of such number of Shares and such principal amount of
the Convertible Notes as may be mutually agreed. The price of any Shares or
Convertible Notes so sold shall be the initial public offering price thereof set
forth on the cover page of this Prospectus, less an amount not greater than the
concession to securities dealers set forth above. To the extent that there are
sales between the International Underwriters and the U.S. Underwriters pursuant
to the Agreement Between U.S. Underwriters and International Underwriters, the
number of Shares and the principal amount of the Convertible Notes initially
available for sale by the U.S. Underwriters or by the International Underwriters
may be more or less than the amount specified on the cover page of this
Prospectus.

Each International Underwriter has severally represented and agreed that
(i) it has not offered or sold and, prior to the expiration of six months from
the closing of the International Offering, will not offer or sell any Shares or
Convertible Notes in the United Kingdom other than to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (whether as principal or agent) for the purposes of their businesses
or otherwise in circumstances which have not resulted in and will not result in
an offer to the public within the meaning of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 with respect to anything done by
it in relation to the Shares or the Convertible Notes in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United

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Kingdom any document received by it in connection with the issue of the Shares
or the Convertible Notes to a person who is of a kind described in Article 11(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom such document may otherwise lawfully be issued
or passed on.

The Company has granted to the U.S. Underwriters and the International
Underwriters options to purchase up to an additional           and
Shares, respectively, and an additional $       and $          principal amount
of the Convertible Notes, respectively, in each case at the applicable price to
the public less the applicable underwriting discount set forth on the cover page
of this Prospectus, solely to cover over-allotments, if any. Such options may be
exercised at any time up to 30 days after the date of this Prospectus. To the
extent such options are exercised, each of the U.S. Underwriters and the
International Underwriters will become obligated, subject to certain conditions,
to purchase approximately the same percentage of such additional shares of
Common Stock or such additional principal amount of Convertible Notes as the
percentage it was obligated to purchase pursuant to the U.S. Underwriting
Agreement or the International Underwriting Agreement, as applicable.

The Company has 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 the date hereof without the prior written consent of Smith Barney
Inc. 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 the
date hereof unless pursuant to the Securities Loan Agreement or with the prior
written consent of Smith Barney Inc. subject to certain limited exceptions.
Smith Barney Inc. currently does not intend to release any securities subject to
such lock-up agreements, but may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to such lock-up
agreements.

The U.S. Underwriting Agreement and the International Underwriting
Agreement provide that the Company and certain Selling Stockholders will
indemnify the several U.S. Underwriters and International Underwriters against
certain liabilities under the Securities Act, or contribute to payments the U.S.
Underwriters and the International Underwriters may be required to make in
respect thereof.

BancAmerica Robertson Stephens is an affiliate of Bank of America, which
will be repaid approximately $55 million of short-term loans to the Company from
the net proceeds of the Offerings. See "Use of Proceeds." Because more than 10%
of the net proceeds of the Offerings will be paid to Bank of America, the
Offerings are being conducted in accordance with Rule 2720 of the Conduct Rules
of the National Association of Securities Dealers, Inc. ("Rule 2720"). Smith
Barney Inc. will serve as a "qualified independent underwriter" in the Offerings
and, in such capacity, will recommend a price in compliance with Rule 2720 and
has performed due diligence investigations in accordance with Rule 2720.

Salomon Smith Barney (including certain of its affiliates), Mr. James Kim
and AICL are among the principal shareholders of a securities and investment
banking firm in Korea. In addition, certain of the Underwriters and their
affiliates have been engaged from time to time, and may in the future be
engaged, to perform investment banking and other advisory-related services to
the Company and its affiliates, including certain of the Selling Stockholders,
in the ordinary course of business. In connection with rendering such services
in the past, such Underwriters and affiliates have received customary
compensation, including reimbursement of related expenses.

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93

In connection with the Offerings, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock or
the Convertible Notes. Such transactions may include stabilization transactions
effected in accordance with Rule 104 of Regulation M, pursuant to which such
persons may bid for or purchase Common Stock or Convertible Notes for the
purpose of stabilizing their market price. The Underwriters also may create a
short position for the account of the Underwriters by selling more Common Stock
or Convertible Notes in connection with the Offerings than they are committed to
purchase from the Company and the Selling Stockholders, and in such case may
purchase Common Stock or Convertible Notes in the open market following
completion of the Offerings to cover all or a portion of such short position.
The Underwriters may also cover all or a portion of such short position, up to
shares of Common Stock and $       principal amount of the Convertible
Notes, by exercising the Underwriters' over-allotment options referred to above.
In addition, the Representatives, on behalf of the Underwriters, may impose
"penalty bids" under contractual arrangements with the Underwriters whereby it
may reclaim from an Underwriter (or dealer participating in the Offerings), for
the account of the other Underwriters, the selling concession with respect to
Common Stock or Convertible Notes that are distributed in the Offerings but
subsequently purchased for the account of the Underwriters in the open market.
Any of the transactions described in this paragraph may result in the
maintenance of the price of the Common Stock and the Convertible Notes at a
level above that which might otherwise prevail in the open market. None of the
transactions described in this paragraph is required, and, if they are
undertaken, they may be discontinued at any time.

In connection with the Offerings, Mr. James Kim and Mrs. Agnes Kim
(referred to herein as the "Lenders") and Smith Barney Inc. intend to enter into
a Securities Loan Agreement (the "Securities Loan Agreement") which provides
that, subject to certain restrictions and with the agreement of the Lenders,
Smith Barney Inc. may from time to time for a period of up to           months
borrow, return and reborrow up to 3.0 million shares of Common Stock from the
Lenders (the "Borrowed Securities"): provided, however, that the number of
Borrowed Securities at any time may not exceed 3.0 million shares of Common
Stock, subject to adjustment for certain dilutive events. The Securities Loan
Agreement is intended to facilitate market-making activity in the Convertible
Notes by Smith Barney Inc. Smith Barney Inc. may from time to time borrow shares
of Common Stock under the Securities Loan Agreement to settle short sales of
Common Stock entered into by Smith Barney Inc. 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 Smith Barney
Inc.'s market-making transactions in the Convertible Notes and the consequent
need to borrow and sell shares of Common Stock. The availability of shares of
Common Stock under the Securities Loan Agreement 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 engaged in by Smith Barney Inc. or any
other Underwriter 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, which is an exhibit to the
Securities Loan Registration Statement.

The Underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.

Prior to the Offerings, there has been no public market for the Common
Stock. Accordingly, the initial public offering price for the Common Stock will
be determined by negotiation among the Company, the Selling Stockholders and the
Representatives. Among the factors considered in determining the initial public
offering price will be the Company's record of operations, its current financial
condition, its future prospects, the market for its services, the experience of
management, the economic conditions of the Company's industry in general, the
general condition of the equity securities market and the demand for similar
securities of companies considered comparable to the Company and other relevant
factors. There can be no assurance, however, that the prices at which the Common
Stock will sell in the public market after the Offerings will not be lower than
the price at which the Shares are sold by the Underwriters.

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LEGAL MATTERS

The validity of the Shares and the Convertible Notes offered hereby will be
passed upon for the Company by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California. Cleary, Gottlieb, Steen & Hamilton, New
York, New York, is acting as counsel for the Underwriters in connection with
certain legal matters relating to the Shares and the Convertible Notes offered
hereby.

EXPERTS

The consolidated financial statements and schedule of the Company as of
December 31, 1995, 1996 and September 30, 1997, and for each of the years in the
three-year period ended December 31, 1996 and for the nine month period ended
September 30, 1997, included in this Registration Statement (as defined below)
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports dated October 31, 1997 with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.

Reference is made to said reports which include an explanatory paragraph
with respect to the ability of the Company to continue as a going concern as
discussed in Note 1 of Notes to the Consolidated Financial Statements.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act with respect to the securities offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company, the Common Stock and the Convertible
Notes, reference is made to the Registration Statement and the exhibits and
schedules filed as a part thereof. Statements contained in this Prospectus as to
the contents of any contract or any other document referred to are not
necessarily complete. In each instance, reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement, and each
such statement is qualified in all respects by such reference. The Registration
Statement, including exhibits and schedules thereto, may be inspected without
charge at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at Seven World Trade Center, Suite 1300, New York, New York
10048 and Northwestern Atrium Center, 500 Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates and through the National Association of Securities
Dealers, Inc. located at 1735 K Street, N.W., Washington, D.C. 20006. 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.

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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.

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96

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.

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AMKOR TECHNOLOGY, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
-----

Report of Independent Public Accountants..............................................    F-2
Consolidated Statements of Income -- Years ended December 31, 1994, 1995, 1996 and
Nine months ended September 30, 1996 (unaudited) and 1997...........................    F-3
Consolidated Balance Sheets -- December 31, 1995, 1996 and September 30, 1997.........    F-4
Consolidated Statements of Stockholders' Equity -- Years ended December 31, 1994, 1995
and 1996 and Nine months ended September 30, 1997...................................    F-5
Consolidated Statements of Cash Flows -- Years ended December 31, 1994, 1995, 1996 and
Nine months ended September 30, 1996 (unaudited) and 1997...........................    F-6
Notes to Consolidated Financial Statements............................................    F-7

F-1

98

After the Reorganization transaction discussed in Note 1 to the Amkor
Technology, Inc. and subsidiaries' consolidated financial statements is
effected, we expect to be in position to render the following report.

ARTHUR ANDERSEN LLP

October 31, 1997

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Amkor Technology, Inc.:

We have audited the accompanying consolidated balance sheets of Amkor
Technology, Inc. and subsidiaries (see Note 1) as of December 31, 1995, 1996 and
September 30, 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, 1996 and the nine months ended September 30, 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 consolidated financial position of Amkor
Technology, Inc. and subsidiaries as of December 31, 1995, 1996 and September
30, 1997, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1996 and the nine months ended
September 30, 1997, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is not in compliance with certain debt
agreements and has a net working capital deficiency which raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to this matter are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Philadelphia, Pa.

F-2

99

AMKOR TECHNOLOGY, INC.

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

FOR THE NINE MONTHS
FOR THE YEAR ENDED                  ENDED
DECEMBER 31,                 SEPTEMBER 30,
--------------------------------   ---------------------
1994       1995        1996                    1997
--------   --------   ----------     1996     ----------
--------
(UNAUDITED)

NET REVENUES.............................. $572,918   $932,382   $1,171,001   $828,373   $1,043,620
COST OF REVENUES -- including purchases
from AICL (Note 11).....................  514,648    783,335    1,022,078    713,244      900,788
--------   --------   ----------   --------   ----------
Gross profit............................   58,270    149,047      148,923    115,129      142,832
--------   --------   ----------   --------   ----------
OPERATING EXPENSES:
Selling, general and administrative.....   41,337     55,459       66,625     46,416       74,094
Research and development................    3,090      8,733       10,930      7,928        5,751
--------   --------   ----------   --------   ----------
Total operating expenses.............   44,427     64,192       77,555     54,344       79,845
--------   --------   ----------   --------   ----------
OPERATING INCOME..........................   13,843     84,855       71,368     60,785       62,987
--------   --------   ----------   --------   ----------
OTHER (INCOME) EXPENSE:
Interest expense, net...................    5,752      9,797       22,245     11,429       27,400
Foreign currency translation............   (4,865)     1,512        2,961        231         (592)
Other (income) expense, net.............   (2,639)     6,523        3,150      7,562        2,176
--------   --------   ----------   --------   ----------
Total other (income) expense.........   (1,752)    17,832       28,356     19,222       28,984
--------   --------   ----------   --------   ----------
INCOME BEFORE INCOME TAXES AND MINORITY
INTEREST................................   15,595     67,023       43,012     41,563       34,003
PROVISION FOR INCOME TAXES................    2,977      6,384        7,876      7,611        3,531
--------   --------   ----------   --------   ----------
INCOME BEFORE MINORITY INTEREST...........   12,618     60,639       35,136     33,952       30,472
MINORITY INTEREST.........................    1,044      1,515          948        339        7,569
--------   --------   ----------   --------   ----------
NET INCOME................................ $ 11,574   $ 59,124   $   34,188   $ 33,613   $   22,903
========   ========   ==========   ========   ==========
PRO FORMA DATA (UNAUDITED):
Historical income before income taxes
and minority interest................ $ 15,595   $ 67,023   $   43,012   $ 41,563   $   34,003
Pro forma provision for income taxes....    3,177     16,784       10,776     10,391        7,158
--------   --------   ----------   --------   ----------
Pro forma income before minority
interest.............................   12,418     50,239       32,236     31,172       26,845
Historical minority interest............    1,044      1,515          948        339        7,569
--------   --------   ----------   --------   ----------
Pro forma net income.................... $ 11,374   $ 48,724   $   31,288   $ 30,833   $   19,276
========   ========   ==========   ========   ==========
Pro forma net income per common share... $    .14   $    .59   $      .38   $    .37   $      .23
========   ========   ==========   ========   ==========
Shares used in computing pro forma net
income per common share..............   82,610     82,610       82,610     82,610       82,610
========   ========   ==========   ========   ==========

The accompanying notes are an integral part of these statements.

F-3

100

AMKOR TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

ASSETS

DECEMBER 31,             SEPTEMBER 30, 1997
---------------------     ------------------------
1995         1996        ACTUAL       PRO FORMA
--------     --------     --------     -----------
(UNAUDITED)

CURRENT ASSETS:
Cash and cash equivalents.............................  $ 91,151     $ 49,664     $ 80,760      $  57,260
Short-term investments................................        --          881        2,978          2,978
Accounts receivable --
Trade, net of allowance for doubtful
accounts of $1,043, $1,179 and $2,489.............   135,174      170,892      120,068        120,068
Due from affiliates.................................    13,315       26,886       22,807         22,807
Other...............................................     5,464        6,426        9,999          9,999
Inventories...........................................    86,040      101,920      111,942        111,942
Other current assets..................................    10,214        8,618       24,934         24,934
--------     --------     --------       --------
Total current assets................................   341,358      365,287      373,488        349,988
--------     --------     --------       --------
PROPERTY, PLANT AND EQUIPMENT, net......................   200,426      324,895      417,223        417,223
--------     --------     --------       --------
INVESTMENTS.............................................    66,613       61,993       46,410         46,410
--------     --------     --------       --------
LONG-TERM NOTES RECEIVABLE..............................     1,626        8,711        5,919          5,919
--------     --------     --------       --------
OTHER ASSETS:
Due from affiliates...................................    10,090       14,638       20,576         20,576
Other.................................................    15,755       22,089       19,251         19,251
--------     --------     --------       --------
25,845       36,727       39,827         39,827
--------     --------     --------       --------
Total assets........................................  $635,868     $797,613     $882,867      $ 859,367
========     ========     ========       ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion of long-term
debt................................................  $ 85,120     $191,813     $345,376      $ 345,376
Trade accounts payable................................    62,643       45,798       82,956         82,956
Due to affiliates.....................................    18,028       33,379       25,397         25,397
Bank overdraft........................................    16,251       14,518       12,424         12,424
Accrued expenses......................................    42,720       30,156       60,312         60,312
Accrued income taxes..................................     5,404       12,838       22,535         22,535
--------     --------     --------       --------
Total current liabilities...........................   230,166      328,502      549,000        549,000
--------     --------     --------       --------
LONG-TERM DEBT..........................................   107,385      167,444       40,736         40,736
--------     --------     --------       --------
DUE TO ANAM USA, INC. (Note 11).........................   219,037      234,894      176,954        176,954
--------     --------     --------       --------
OTHER NONCURRENT LIABILITIES............................    13,205       12,287       13,338         21,438
--------     --------     --------       --------
COMMITMENTS AND CONTINGENCIES (Notes 1 and 13)
MINORITY INTEREST.......................................    11,297       15,926       24,119         24,119
--------     --------     --------       --------
STOCKHOLDERS' EQUITY:
Common stock..........................................        46           46           46             46
Additional paid-in capital............................    16,494       16,770       20,522         26,122
Retained earnings.....................................    28,338       30,798       48,553         11,353
Unrealized gains (losses) on investments..............     9,584       (7,959)       9,599          9,599
Cumulative translation adjustment.....................       316       (1,095)          --             --
--------     --------     --------       --------
Total stockholders' equity..........................    54,778       38,560       78,720         47,120
--------     --------     --------       --------
Total liabilities and stockholders' equity..........  $635,868     $797,613     $882,867      $ 859,367
========     ========     ========       ========

The accompanying notes are an integral part of these statements.

F-4

101

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1994, 1995, 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1997

(IN THOUSANDS)

UNREALIZED
ADDITIONAL              CUMULATIVE      GAINS
COMMON    PAID-IN     RETAINED   TRANSLATION  (LOSSES) ON
STOCK     CAPITAL     EARNINGS   ADJUSTMENT   INVESTMENTS    TOTAL
------   ----------   --------   ----------   -----------   --------

BALANCE AT JANUARY 1, 1994...........   $ 46     $ 16,494    $ (7,060)   $ (1,410)     $    --     $  8,070
Net income.........................     --           --      11,574          --           --       11,574
Distributions......................     --           --      (3,120)         --           --       (3,120)
Change in division equity
account.........................     --           --      (7,753)         --           --       (7,753)
Unrealized loss on investments.....     --           --          --          --          (35)         (35)
Currency translation adjustments...     --           --          --         881           --          881
---      -------     -------     -------     --------     --------
BALANCE AT DECEMBER 31, 1994.........     46       16,494      (6,359)       (529)         (35)       9,617
Net income.........................     --           --      59,124          --           --       59,124
Distributions......................     --           --     (19,922)         --           --      (19,922)
Change in division equity
account.........................     --           --      (4,505)         --           --       (4,505)
Unrealized gain on investments.....     --           --          --          --        9,619        9,619
Currency translation adjustments...     --           --          --         845           --          845
---      -------     -------     -------     --------     --------
BALANCE AT DECEMBER 31, 1995.........     46       16,494      28,338         316        9,584       54,778
Net income.........................     --           --      34,188          --           --       34,188
Distributions......................     --           --     (15,123)         --           --      (15,123)
Change in division equity
account.........................     --           --     (16,605)         --           --      (16,605)
Unrealized loss on investments.....     --           --          --          --      (17,543)     (17,543)
Currency translation adjustments...     --           --          --      (1,411)          --       (1,411)
Acquisition of AATS (Note 14)......     --          276          --          --           --          276
---      -------     -------     -------     --------     --------
BALANCE AT DECEMBER 31, 1996.........     46       16,770      30,798      (1,095)      (7,959)      38,560
Net income.........................     --           --      22,903          --                    22,903
Distributions......................     --           --      (5,148)         --           --       (5,148)
Change in division equity
account.........................     --        3,752          --          --           --        3,752
Unrealized gain on investments.....     --           --          --          --       17,558       17,558
Currency translation adjustments...     --           --          --       1,095           --        1,095
---      -------     -------     -------     --------     --------
BALANCE AT SEPTEMBER 30, 1997........     46     $ 20,522    $ 48,553    $     --      $ 9,599     $ 78,720
===      =======     =======     =======     ========     ========

The accompanying notes are an integral part of these statements.

F-5

102

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

FOR THE YEAR ENDED                    FOR THE NINE MONTHS
DECEMBER 31,                       ENDED SEPTEMBER 30,
-----------------------------------------     -------------------------
1994           1995            1996           1996           1997
---------     -----------     -----------     ---------     -----------
(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................  $  11,574     $    59,124     $    34,188     $33,613...    $    22,903
Adjustments to reconcile net income to net cash
provided by (used in) operating activities --
Depreciation and amortization.......................     14,612          26,614          57,825        38,966          64,072
Provision for accounts receivable...................      1,037             444           1,271         1,106             910
Provision for excess and obsolete inventory.........        500           1,000             500           375           6,763
Deferred income taxes...............................      1,517          (1,147)           (324)          204         (13,557)
Equity (gain) loss of investee......................     (2,605)             95            (661)         (483)           (405)
(Gain) loss on sale of investments..................     (1,700)            126            (139)           --              --
Minority interest...................................      1,044           1,515             948           339           7,569
Changes in assets and liabilities excluding effects of
acquisitions --
Accounts receivable.................................    (31,565)        (53,264)        (36,695)      (14,745)        (38,886)
Proceeds from accounts receivable sale..............         --              --              --            --          88,800
Other receivables...................................      1,462          (2,565)           (925)       (2,819)         (3,573)
Inventories.........................................    (18,885)        (32,668)        (16,380)      (10,972)        (16,785)
Due to/from affiliates, net.........................    (17,465)         (8,375)         (2,768)      (36,223)        (15,149)
Other current assets................................     (3,377)         (4,764)          1,694           501          (5,480)
Other non-current assets............................     (7,426)           (724)         (6,108)       (4,750)          5,030
Accounts payable....................................     11,017          35,017         (16,852)      (18,339)         37,158
Accrued expenses....................................     13,268          17,687         (12,658)       (8,314)         30,156
Accrued taxes.......................................      1,000             404           7,433         7,218           9,697
Other long-term liabilities.........................       (562)          9,034            (108)         (119)          1,675
Other, net............................................        205              --           3,750         3,750              --
---------     -----------         -------       -------         -------
Net cash provided by (used in) operating
activities....................................    (26,349)         47,553          13,991       (10,692)        180,898
---------     -----------         -------       -------         -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, including
purchase of AATS....................................    (68,926)       (123,645)       (185,112)     (111,273)       (151,503)
Sale of property, plant and equipment.................      2,429             110           2,228           545           1,141
Purchases of investments and issuances of notes
receivable..........................................    (15,298)        (19,351)        (21,068)      (11,844)        (14,605)
Proceeds from sale of investments.....................      8,284             351             520            --              --
---------     -----------         -------       -------         -------
Net cash used in investing activities...........    (73,511)       (142,535)       (203,432)     (122,572)       (164,967)
---------     -----------         -------       -------         -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in bank overdrafts and short-term
borowings...........................................    (20,954)         41,308          64,852        49,394          58,533
Proceeds from issuance of affiliate debt..............    820,027       1,059,759       1,205,174       870,386       1,003,203
Payments of affiliate debt............................   (627,056)     (1,052,415)     (1,189,317)     (861,112)     (1,011,403)
Proceeds from issuance of long-term debt..............     47,000          50,080         102,193        70,980           8,034
Payments of long-term debt............................     (2,201)         (3,021)         (3,138)       (1,690)        (41,806)
Distributions to stockholders.........................     (3,200)        (20,003)        (15,205)      (13,154)         (5,148)
Change in division equity account.....................     (7,753)         (4,505)        (16,605)      (10,344)          3,752
---------     -----------         -------       -------         -------
Net cash provided by financing activities.......    205,861          71,203         147,954       104,460          15,165
---------     -----------         -------       -------         -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....    106,001         (23,779)        (41,487)      (28,804)         31,096
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..........      8,929         114,930          91,151        91,151          49,664
---------     -----------         -------       -------         -------
CASH AND CASH EQUIVALENTS, END OF PERIOD................  $ 114,930     $    91,151     $    49,664     $  62,347     $    80,760
=========     ===========         =======       =======         =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for --
Interest............................................  $   6,641     $    12,594     $    24,125     $  14,719          28,708
Income taxes........................................        364             495           2,256         2,447           7,193

The accompanying notes are an integral part of these statements.

F-6

103

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements of Amkor Technology, Inc. and
subsidiaries ("Amkor" or the "Company") include the accounts of the following
(these companies are referred to as the "Amkor Companies"):

- Amkor Electronics, Inc. ("AEI"), a U.S. S Corporation;

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

- T.L. Limited (a British Cayman Island Corporation) and its Philippine
subsidiaries, Amkor Anam Advanced Packaging, Inc. ("AAAP") and Amkor/Anam
Pilipinas, Inc. ("AAP") (which is currently owned 60% by T.L. Limited and
40% by Anam Industrial Co., Ltd. ("AICL" -- see Notes 11 and 16) and its
wholly-owned subsidiary Automated Microelectronics, Inc. ("AMI");

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

- Amkor Anam Test Services, Inc. (a U.S. Corporation) (see Note 14); 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 C.I.L., Limited and ceased
operations of its semiconductor and test business unit.

Each of the Amkor Companies is under common control and management. In
connection with the Offerings (see Note 16), on September 26, 1997 the Company
was formed to consolidate the ownership of the Amkor Companies. In
1998 prior to the effective date of the Offerings, the
stockholders of the Amkor Companies exchanged all of their interests in the
respective Amkor Companies to the Company for 82,610 shares of common stock and
5 shares of Series A preferred stock (the "Preferred Stock") of the Company (the
"Reorganization"). The transaction will be treated similar to a pooling of
interests as it represents an exchange of equity interests among companies under
common control. The issuance of the Preferred Stock will be accounted for as a
stock dividend for the fair value of the stock issued.

The 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.

Basis of Presentation

The accompanying financial statements have been prepared on a going concern
basis which contemplates realization of assets and liquidation of liabilities in
the ordinary course of business. At September 30, 1997 the Company was not in
compliance with certain restrictive covenants of its principal long-term debt
agreements and, as a result, amounts due under these agreements are required to
be classified as current liabilities in the consolidated balance sheet.
Consequently, at September 30, 1997, current liabilities exceeded current assets
by $175,512. To date, the Company has not received any notification that the
Company's repayment obligations with respect to these loans have been
accelerated as a result of such covenant violations. However, there is no
assurance that the Company could generate sufficient cash flow from operations
or other sources to satisfy these liabilities should they become due before
maturity. If the planned public offering of common stock and convertible debt is
successful (see Note 16), the Company will use part of the net proceeds to the

F-7

104

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Company to repay these bank loans. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.

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 AICL under a long
standing arrangement. Approximately 80%, 79%, 72% and 68% of the Company's
packaging and test revenues in 1994, 1995, 1996 and the nine months ended
September 30, 1997, respectively, relate to the packaging and test services
provided by AICL.

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 frequent contact with customers.

At December 31, 1995, 1996 and September 30, 1997, the Company maintained
$79,354, $34,330 and $56,218, respectively, in deposits at one U.S. financial
institution and $3,299, $1,861 and $10,234, respectively, in deposits at U.S.
banks which exceeded federally insured limits.

Additionally, at December 31, 1995, 1996 and September 30, 1997, the
Company maintained deposits and certificates of deposits totaling approximately
$8,166, $14,649 and $13,603, 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 10.6%, 13.3%, 23.5% and 22.0% of net revenues in 1994, 1995, 1996
and the nine months ended September 30, 1997, respectively. The Company's five
largest customers collectively accounted for 33.5%, 34.1%, 39.2% and 38.6% of
net revenues in 1994, 1995, 1996 and the nine months ended September 30, 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.

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, risks associated with leverage, dependence
on the Company's relationship with and the financial support provided by AICL
(see Note 11), 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.

F-8

105

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

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 September 30, 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 2). Of the total trade accounts
receivable amount at September 30, 1997, $23,864 relate to the trade accounts
receivable of C.I.L., Limited and Chamterry 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 $15,349, $27,381, $58,497 and $63,634 for
1994, 1995, 1996 and the nine months ended September 30, 1997, respectively.

Other Noncurrent Assets

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

Other Noncurrent Liabilities

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

F-9

106

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Income Taxes

The Company accounts for income taxes following the provisions of Statement
of Financial Accounting Standards (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 does not recognize U.S. federal corporate income taxes. Instead, the
stockholders of AEI are 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 pending 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 Note 17).

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 Exchange (see Note 16).

In February 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 128, "Earnings Per Share," which will be effective for the Company in
1997. Primary and fully diluted earnings per share will be replaced by basic and
diluted earnings per share. Prior period results will be restated. The most
significant difference is that the computation of basic earnings per share no
longer assumes potentially dilutive securities are outstanding.

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 of the packaging process and shipment to the customer. Accordingly,
the cost of the customer-supplied materials is not included in the consolidated
statements of income.

Research and Development Costs

Research and development costs are charged to expenses 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.

F-10

107

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Recently Issued Accounting Standards

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.

Interim Financial Statements

The financial statements for the nine months ended September 30, 1996 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 nine months ended September 30, 1997 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. 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. AICL has guaranteed AEI's
obligations under the Agreement (see Note 11).

Proceeds from the sale of receivables were $88,800 in the nine months ended
September 30, 1997. Losses on receivables sold under the Agreement were
approximately $1,514 as of September 30, 1997 and are included in other (income)
expense, net.

3. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

DECEMBER 31,
---------------------     SEPTEMBER 30,
1995         1996           1997
--------     --------     -------------

Land...................................    $     --     $     --       $   1,264
Building and improvements..............      20,248       81,602         114,231
Machinery and equipment................     204,750      333,188         451,653
Furniture, fixtures and other
equipment............................      23,613       31,330          33,962
Construction in progress...............      20,371        5,240          26,994
-------      -------         -------
268,982      451,360         628,104
Less -- Accumulated depreciation and
amortization.........................      68,556      126,465         210,881
-------      -------         -------
$200,426     $324,895       $ 417,223
=======      =======         =======

F-11

108

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

4. COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL

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
Exchange, the Company authorized 500,000 shares of $.001 par value common stock,
of which 82,610 shares will be issued to the stockholders of the Amkor Companies
in exchange for their interests in these Companies.

In addition, the Company authorized 10,000 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 are retained in Chamterry Enterprises,
Ltd. for the benefit of the owners.

5. 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 AICL on a consignment basis.
Components of inventories follow:

DECEMBER 31,
--------------------     SEPTEMBER 30,
1995         1996           1997
-------     --------     -------------

Raw materials and purchased components....  $79,495     $ 93,112       $ 100,671
Work-in-process...........................    6,545        8,808          11,271
-------     --------        --------
$86,040     $101,920       $ 111,942
=======     ========        ========

6. INVESTMENTS

The Company's investments include investments in affiliated companies which
provide services to the Company (see Note 11) and certain other technology based
companies. Investments are summarized as follows:

DECEMBER 31,
-----------------     SEPTEMBER 30,
1995      1996           1997
-------   -------     -------------

Equity Investments (20%-50% owned)
Anam Semiconductor & Technology Co., Ltd...  $ 8,737   $10,700        $    --
Datacom International, Inc.................       --     1,335             --
Sunrise Capital Fund.......................    1,500     1,328             --
Other......................................      606     1,373          2,095
-------   -------        -------
10,843    14,736          2,095
-------   -------        -------
Available for Sale (cost based investments)
AICL.......................................   37,127    23,903         39,467
Other......................................   18,643    23,354          4,848
-------   -------        -------
55,770    47,257         44,315
-------   -------        -------
$66,613   $61,993        $46,410
=======   =======        =======

The Company had net unamortized investment costs in excess of the
proportionate share of the investee companies' net assets of approximately $347,
$1,284 and $0 at December 31, 1995, 1996 and September 30, 1997, respectively.

F-12

109

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

On August 1, 1997, the Company sold its equity investment in Anam
Semiconductor & Technology Co., Ltd. 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 exceeded the carrying value by approximately
$25,000 at August 1, 1997. Subsequent to the sale on August 1, the Company
loaned AK Investments, Inc. $12,800 for the purchase of additional investments.
This amount was still outstanding at September 30, 1997.

7. SHORT-TERM CREDIT FACILITIES

At December 31, 1995, 1996 and September 30, 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 (approximately
8% at September 30, 1997). For 1995, 1996 and the nine month period ended
September 30, 1997, the weighted average interest rate on these borrowings was
8.0%, 7.8% and 8.5%, 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 $41,700 at September 30,
1997.

F-13

110

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

8. DEBT

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

DECEMBER 31,
---------------------     SEPTEMBER 30,
1995         1996           1997
--------     --------     -------------

Short-term borrowings (see Note 7)....................  $ 84,620     $150,513       $ 210,932
Bank loan, interest at LIBOR plus annual spread (6.90%
at September 30, 1997), due October, 2000...........    50,000       50,000          50,000
Bank loan, interest at LIBOR plus annual spread (6.68%
at September 30, 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       40,000              --
Bank debt, interest at LIBOR plus annual spread (9.32%
at September 30, 1997), due December, 2001..........        --       20,000          20,000
Bank debt, interest at LIBOR plus annual spread (9.62%
at September 30, 1997), due October, 1998...........        --        5,000           5,000
Bank debt, interest at LIBOR plus annual spread (9.14%
at September 30, 1997), due in installments with
balance due September, 1999.........................        --        4,000           3,625
Bank debt, interest at LIBOR plus annual spread (9.69%
at September 30, 1997), due in equal installments
through January, 2001...............................        --        5,926           5,926
Note payable, interest at prime (8.50% at September
30, 1997), due in semiannual installments beginning
November 1999 through April, 2004...................        --           --           6,934
Note payable, interest at LIBOR plus annual spread
(6.49% at September 30, 1997), due November, 1999...    12,800       11,000          10,000
Other, primarily capital lease obligations and other
debt................................................     5,085        1,568           2,445
--------     --------       ---------
192,505      359,257         386,112
Less -- Short-term borrowings and current portion of
long-term debt......................................   (85,120)    (191,813)       (345,376)
--------     --------       ---------
$107,385     $167,444       $  40,736
========     ========       =========

In August, 1997 the Company entered into a three month bridge loan with a
bank for $55,000. The bridge loan was used to repay the FRNs as well as other
debt that was due. The bank has agreed to extend this facility until February
1998.

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 AICL. 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 has not been in compliance with covenants regarding maintaining
certain debt-to-equity ratios and making advances to an affiliate. Consequently,
amounts due under these agreements and certain other agreements with
cross-default clauses have been classified as current liabilities in the
accompanying consolidated balance sheet.

F-14

111

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

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.

Principal payments required under long-term debt borrowings at September
30, 1997 are as follows:

AMOUNT
--------

Fourth quarter 1997...............................  $132,697
Calendar year 1998................................     2,075
Calendar year 1999................................    21,126
Calendar year 2000................................    11,830
Calendar year 2001................................     3,984
Calendar year 2002................................     1,386
Thereafter........................................     2,083
--------
Total.............................................  $175,180
========

Total principal payments due within twelve months from September 30, 1997
under long-term borrowing agreements are $134,445 and short-term borrowing
agreements are $210,932 representing combined principal repayments due within
twelve months of $345,376 . Amounts payable in the fourth quarter of 1997
include $131,753 due under Bank loans and Bank debt agreements which are
currently in default.

9. EMPLOYEE BENEFIT PLANS

U.S. Pension Plans

AEI has a defined contribution benefit plan covering substantially all U.S.
employees under which AEI 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 $108, $483, $776 and $710 in 1994, 1995, 1996 and the
nine months ended September 30, 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:

NINE MONTHS
YEAR ENDED DECEMBER 31,            ENDED
----------------------------     SEPTEMBER 30,
1994       1995       1996          1997
------     ------     ------     -------------

Service cost of current period.....  $  948     $  974     $1,542        $ 1,610
Interest cost on projected benefit
obligation.......................     623        811      1,228          1,256
Actual return on plan assets.......    (500)      (609)      (677)          (686)
Net amortization and deferrals.....      97        100         98            111
------     ------     ------         ------
Total pension expense....  $1,168     $1,276     $2,191        $ 2,291
======     ======     ======         ======

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

F-15

112

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER 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:

DECEMBER 31,
-------------------     SEPTEMBER 30,
1995        1996           1997
-------     -------     -------------

Actuarial present value of:
Vested benefit obligation................  $ 1,280     $ 1,696        $ 1,867
=======     =======        =======
Accumulated benefit obligation...........  $ 1,977     $ 2,848        $ 3,208
=======     =======        =======
Actuarial present value of projected
benefit obligation.......................  $ 8,542     $12,699        $13,275
Plan assets at fair value..................    5,765       6,077          6,078
-------     -------        -------
Plan assets less than projected benefit
obligation...............................   (2,777)     (6,622)        (7,197)
Prior service cost.........................    1,226       1,125          1,125
Unrecognized net loss......................       --       1,800          2,279
-------     -------        -------
Accrued pension cost.......................  $(1,551)    $(3,697)       $(3,793)
=======     =======        =======

The weighted average interest rate used in determining the projected
benefit obligation was 12% as of December 31, 1995, 1996 and September 30, 1997.
The rates of increase in future compensation levels were 10% as of December 31,
1995 and 11% for AAAP and AAP and 10% for AMI as of December 31, 1996 and
September 30, 1997. The expected long-term rate of return on plan assets was 12%
as of December 31, 1995, 1996 and September 30, 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      FOR THE NINE
31,                  MONTHS ENDED
-----------------------------     SEPTEMBER 30,
1994       1995        1996          1997
------     -------     ------     -------------

Current:
Federal.........................  $1,277     $ 6,125     $5,880       $  10,197
State...........................     167         908         60             423
Foreign.........................      16         498      2,260           6,468
------     -------     ------        --------
1,460       7,531      8,200          17,088
------     -------     ------        --------
Deferred:
Federal.........................     (60)       (173)      (226)         (1,957)
Foreign.........................   1,577        (974)       (98)        (11,600)
------     -------     ------        --------
1,517      (1,147)      (324)        (13,557)
------     -------     ------        --------
Total provision.........  $2,977     $ 6,384     $7,876       $   3,531
======     =======     ======        ========

F-16

113

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER 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 NINE
MONTHS ENDED
FOR THE YEAR ENDED DECEMBER 31,      SEPTEMBER 30,
--------------------------------     -------------
1994         1995        1996           1997
-------     --------     -------     -------------

Federal statutory rate.........  $ 5,458     $ 23,458     $15,054        $11,901
State taxes, net of federal
benefit......................      167          908          60            148
S Corp. status of AEI..........     (200)     (10,400)     (2,900)        (3,626)
Losses of foreign subsidiaries
not benefitted...............       --           --       4,957          8,196
Foreign exchange losses
recognized for income
taxes........................       --       (1,649)         --         (9,958)
Difference in rates on foreign
subsidiaries.................   (2,448)      (5,933)     (9,295)        (3,130)
-------     --------     -------        -------
Total................  $ 2,977     $  6,384     $ 7,876        $ 3,531
=======     ========     =======        =======

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 are not recognized for financial reporting purposes as the U.S.
dollar is the functional currency (see Note 1). These losses will be realized,
for Philippine tax reporting purposes, upon settlement of the related asset or
liability. 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.

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

DECEMBER 31,        SEPTEMBER 30,
-----------------     -------------
1995       1997          1996
------     ------     -------------

Deferred tax assets (liabilities):
Retirement benefits........................  $  206     $  888        $ 1,525
Receivables................................     402        344            407
Inventories................................     890      1,057          5,428
Unrealized foreign exchange losses.........     612        398         16,264
Unrealized foreign exchange gains..........    (454)      (614)        (7,977)
Other......................................     321        225            208
------     ------        -------
Net deferred tax asset.....................  $1,977     $2,298        $15,855
======     ======        =======

Non-U.S. income before taxes and minority interest of the Company was
$14,390, $23,800, $20,420 and $14,228 in 1994, 1995, 1996 and the nine months
ended September 30, 1997, respectively.

At December 31, 1995, 1996 and at September 30, 1997 current deferred tax
assets of $1,732, $1,919 and $13,134, respectively, are included in other
current assets and noncurrent deferred tax assets of $245, $379 and

F-17

114

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

$2,721, 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.

At September 30, 1997, the financial reporting basis of AEI's net assets
exceeded the tax basis of the net assets by approximately $20,300. In connection
with the Offerings, the Company and the stockholders of AEI will enter 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 terminates 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 terminates its S Corporation status as to which AEI filed or files tax
returns claiming status as an S Corporation.

11. RELATED-PARTY TRANSACTIONS

At September 30, 1997, the Company owned 8.1% of the outstanding stock of
AICL (see Note 6), and AICL owned 40% of AAP. After the Offerings (see Note 16)
the Company intends to purchase AICL's interest in AAP for approximately
$34,000. In 1996 and the nine months ended September 30, 1997, approximately 72%
and 68%, respectively, of the Company's net revenues (see Note 1) were derived
from services performed for the Company by AICL, a Korean public company in
which the Company and 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 AICL's semiconductor packaging and
test services, except to customers in Korea and Japan to whom AICL has
historically sold such services directly. The Company has worked closely with
AICL in developing new technologies and products. The Company has recently
entered into five year supply agreements with AICL giving the Company the first
right to market and sell substantially all of AICL's packaging and test services
and the exclusive right to market and sell all of the wafer output of AICL'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 AICL
to effectively provide the contracted services on a cost-efficient and timely
basis. The termination of the Company's relationship with AICL for any reason,
or any material adverse change in AICL'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 obtained a significant portion of its financing from
financing arrangements provided by Anam USA, Inc. ("Anam USA"), AICL's
wholly-owned financing subsidiary. A majority of the amount due to Anam USA
represents outstanding amounts under financing obtained by Anam USA for the
benefit of the Company with the balance representing payables to Anam USA for
packaging and service charges paid to AICL. Based on guarantees provided by
AICL, Anam USA obtains for the benefit of the Company a continuous series of
short-term financing arrangements which generally are less than six months in
duration, and typically are less than two months in duration. Because of the
short-term nature of these loans, the flows of cash to and from Anam USA under
this arrangement are significant. Purchases from AICL through Anam USA were
$254,266, $354,062, $460,282 and $408,371 for 1994, 1995, 1996 and the nine
months ended September 30, 1997, respectively. Charges from Anam USA for
interest and bank charges were $3,181, $4,484, $7,074 and $7,704 for 1994, 1995,
1996 and the nine months ended September 30, 1997, respectively. Amounts payable
to AICL and Anam USA were $232,608, $252,221, and $195,090 at December 31, 1995,
1996 and September 30, 1997, respectively.

F-18

115

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

AICL's ability to continue to provide services to the Company will depend
on AICL's financial condition and performance. AICL currently has a significant
amount of debt relative to its equity, which debt the Company expects will
continue to increase in the foreseeable future. AICL, as a public company in
Korea, has published its most recent semi-annual financial statements as of June
30, 1997. These financial statements are unaudited and prepared on the basis of
Korean GAAP, which differs from U.S. GAAP. U.S. GAAP financial statements are
not available. As of June 30, 1997, AICL, on an unconsolidated basis, had
current liabilities of approximately W749 billion, including approximately W443
billion of short-term borrowings and approximately W67 billion of current
maturities of long-term debt, and had long-term liabilities of approximately
W839 billion, including approximately W640 billion of long-term debt. As of such
date, the total shareholders' equity of AICL amounted to approximately W288
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 AICL 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 AICL 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 AICL's ability to continue to provide
services and otherwise fulfill its obligations to the Company.

As of June 30, 1997, AICL was contingently liable under guarantees in
respect of debt of its subsidiaries and affiliates in the aggregate amount of
approximately W935 billion. Such guarantees included those in respect of all of
Anam USA's debt, as well as $176,250 of the Company's debt to banks at September
30, 1997 and the Company's obligations under a receivables sales arrangement
(see Note 2). The Company has met a significant portion of its financing needs
through financing arrangements obtained by Anam USA for the benefit of the
Company based on guarantees provided by AICL. There can be no assurance that
Anam USA will be able to obtain additional guarantees, if necessary, from AICL.
Further, a deterioration in AICL's financial condition could trigger defaults
under AICL's guarantees, causing acceleration of such loans. In addition, if any
relevant subsidiaries or affiliates of AICL were to fail to make interest or
principal payments or otherwise default under their debt obligations guaranteed
by AICL, AICL 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.

Anam Engineering and Construction, an affiliate of AICL, built the
packaging facility for AAAP in the Philippines. Payments to Anam Engineering and
Construction were $6,542, $22,167 and $3,281 in 1995, 1996 and the nine months
ended September 30, 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 $1,813
in 1996 and the nine months ended September 30, 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 September 30, 1997 were $25,100 and $20,600, 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 $13,000 term loan note. As of September 30,
1997, there were no amounts outstanding under the line of credit and $9,750 was
outstanding under the term loan note. The Company has also unconditionally
guaranteed another affiliate's

F-19

116

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

obligation under a $4,000 term loan agreement and a $1,000 line of credit. As of
September 30, 1997, there was $4,000 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 $88,000 at September 30, 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
shareholders 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 the nine months ended September 30, 1997 were
$1,343 and $1,185, respectively.

At December 31, 1995, 1996 and September 30, 1997, the Company had advances
and notes receivable from affiliates of $12,088, $22,988 and $41,444,
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. In September 1997, $5,710 of these notes
were satisfied as a result of the purchase of the Chandler facility.

12. 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.

13. COMMITMENTS AND CONTINGENCIES

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

F-20

117

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Future minimum lease payments under operating leases that have initial or
remaining noncancelable lease terms in excess of one year at September 30, 1997,
are:

1997 (3 months)....................................  $ 1,252
1998...............................................    5,648
1999...............................................    5,619
2000...............................................    5,416
2001...............................................    4,673
2002...............................................    1,281
Thereafter.........................................    7,254
-------
Total..............................................  $31,143
=======

Rent expense amounted to $2,742, $3,692, $5,520 and $5,313 for 1994, 1995,
1996 and the nine months ended September 30, 1997, respectively.

The Company has various purchase commitments for materials, supplies and
capital equipment incidental to the ordinary conduct of business. As of
September 30, 1997 the Company had commitments for capital equipment of
approximately $32,000. In the aggregate, such commitments are not at prices in
excess of current market.

14. ACQUISITION OF AMKOR ANAM TEST SERVICES, INC.

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 cost has been
allocated to the consolidated 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.

15. 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   CONSOLIDATED
----------   --------   -----------   ------------   ------------

Nine months ended September 30, 1997:
Net revenues from unaffiliated
customers..........................  $  899,600    144,020    $      --     $       --     $ 1,043,620
Net revenues from affiliates..........          --         --      192,178       (192,178)
----------   --------     --------      ---------      ----------
Total net revenues....................     899,600    144,020      192,178       (192,178)      1,043,620
Income before income taxes and
minority interest..................      19,775     19,037       (4,809)            --          34,003
Identifiable assets...................     435,200     25,848      514,764       (246,289)        729,523
Corporate assets......................                                                            153,344
----------
Total assets..........................                                                        $   882,867
==========

F-21

118

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

UNITED
STATES      EUROPE    PHILIPPINES   ELIMINATIONS   CONSOLIDATED
----------   --------   -----------   ------------   ------------

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...................     350,988     19,806      424,653       (183,255)        612,192
Corporate assets......................                                                            185,421
------------
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...................     323,886     19,014      270,185       (179,166)        433,919
Corporate assets......................                                                            201,949
------------
Total assets..........................                                                        $   635,868
=========
Year ended December 31, 1994:
Net revenues from unaffiliated
customers..........................  $  488,329   $ 84,589    $      --     $       --     $   572,918
Net revenues from affiliates..........          --         --       76,591        (76,591)             --
----------   --------   -----------   ------------   ------------
Total net revenues....................     488,329     84,589       76,591        (76,591)        572,918
Income before income taxes and
minority interest..................       1,205      9,118        5,272             --          15,595
Identifiable assets...................     267,615     17,436      134,704        (89,081)        330,674
Corporate assets......................                                                             95,848
------------
Total assets..........................                                                        $   426,522
=========

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
$151,306 of revenues from unaffiliated foreign customers for 1995, 1996 and the
nine months ended September 30, 1997, respectively. In 1994 sales to
unaffiliated foreign customers from the United States were less than 10% of
total consolidated net revenues. 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.

16. SUBSEQUENT EVENTS

On           , 1998, the stockholders of each of the Amkor Companies
described in Note 1 exchanged all of their shares of these companies for 82,610
newly issued shares of common stock and 5 shares of Preferred Stock of Amkor
Technology, Inc. ("ATI") a company formed to consolidate the operations of the
Amkor Companies. This transaction will be accounted for similar to a pooling of
interests. The issuance of the Preferred Stock will be accounted for as a stock
dividend based upon the fair value of the stock issued. ATI filed an amended
registration statement on December 30, 1997 with the Securities and Exchange
Commission

F-22

119

AMKOR TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

as part of a proposed plan to reduce outstanding borrowings and to increase the
stockholders' equity. ATI intends to raise approximately $       (after
deducting the underwriting discount and estimated offering expenses) from the
sale of shares of common stock and convertible notes (the "Offerings"). The
convertible notes will be 1) convertible into ATI common stock at a premium over
the initial public offering price; 2) callable in certain circumstances after
three years; 3) unsecured and subordinate to senior debt; 4) carry a coupon rate
of approximately   %; and 5) have a maturity of five years. Approximately
$       of the proceeds will be used to reduce short-term borrowings and
long-term debt. In connection with the Offerings, certain existing stockholders
intend to sell approximately        of their shares.

The Company established stock option plans in 1998 pursuant to which
shares of common stock were reserved for future issuance upon the
exercise of stock options granted to employees, consultants and directors. The
options will be issued at fair value and generally will vest over five years.

After the Offerings, the Company intends to purchase AICL's 40% interest in
AAP for approximately $34,000. The Company will account for this transaction as
a purchase which will result in the elimination of the minority interest
liability reflected on the consolidated balance sheet.

17. PRO FORMA ADJUSTMENTS

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.

Balance Sheet

As discussed in Note 1, the Company intends to reorganize prior to the
effective date of the contemplated offering. AEI will terminate its S
Corporation status at which time additional deferred tax liabilities of $8,100
will be recorded for existing temporary differences between the book and tax
bases of assets and liabilities. If the termination of AEI's S Corporation
status would have occurred on September 30, 1997, AEI would have declared a
distribution of $23,500 of previously taxed income and the remaining retained
earnings related to AEI of which $5,600 would have been reclassified to
additional paid in capital. The pro forma balance sheet is presented to reflect
these changes as if they occurred on September 30, 1997.

F-23

120

======================================================

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, THE SELLING STOCKHOLDERS OR ANY OF THE UNDERWRITERS.
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
----

Prospectus Summary.....................   3
Risk Factors...........................   9
Reorganization.........................  24
Relationship with Anam Industrial Co.,
Ltd..................................  25
Use of Proceeds........................  28
Dividend Policy........................  28
Capitalization.........................  29
Dilution...............................  30
Selected Consolidated Financial Data...  31

Management's Discussion and Analysis of
Financial Condition and Results of
Operations...........................  33
Business...............................  43
Management.............................  58
Certain Transactions...................  63
Principal and Selling Stockholders.....  65
Description of Capital Stock...........  66
Description of Convertible Notes.......  68
Shares Eligible for Future Sale........  81
Certain United States Federal Tax
Consequences to Holders of Common
Stock and Convertible Notes..........  83
Underwriting...........................  88
Legal Matters..........................  92
Experts................................  92
Additional Information.................  92
Glossary...............................  93
Index to Consolidated Financial
Statements........................... F-1

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

Until          , 1998 (25 days after the commencement of the Offerings), all
dealers effecting transactions in the Common Stock and Convertible Notes,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as Underwriters and with respect to their unsold
allotments or subscriptions.

======================================================
======================================================

SHARES

COMMON STOCK

$150,000,000

% CONVERTIBLE

SUBORDINATED NOTES

DUE 2003

AMKOR

TECHNOLOGY, INC.

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

PROSPECTUS

, 1998

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

SALOMON SMITH BARNEY

BANCAMERICA
ROBERTSON STEPHENS

COWEN & COMPANY

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

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

121

APPENDIX - DESCRIPTION OF GRAPHICS
----------------------------------

Inside Front Cover - Photograph of manufacturing facilities; pictures
of products; and diagram of wafer fabrication, packaging and test
operations.

Page 38 - Diagram showing wafer fabrication process, starting with a
raw wafer, packaging and final testing.

122

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

SUBJECT TO COMPLETION, DATED DECEMBER 30, 1997

PROSPECTUS

SHARES

COMMON STOCK

LOGO                              $150,000,000

% CONVERTIBLE SUBORDINATED NOTES DUE 2003

AMKOR TECHNOLOGY, INC.

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

Amkor Technology, Inc. ("Amkor" or the "Company") hereby offers
shares of Common Stock, par value $.001 per share ("Common Stock"), and
$150,000,000 aggregate principal amount of     % Convertible Subordinated Notes
due 2003 (the "Convertible Notes"). In addition, certain stockholders of the
Company (the "Selling Stockholders") are hereby offering         shares of
Common Stock. The Convertible Notes will mature on           , 2003. Interest on
the Convertible Notes is payable on         and         of each year, commencing
, 1998. The Convertible Notes are convertible into shares of Common
Stock at any time on or before the close of business on the last trading day
prior to maturity, unless previously redeemed, at a conversion price of
$        per share, subject to adjustment in certain events as described herein.

The Convertible Notes are subordinated in right of payment to all existing
and future Senior Debt (as defined) of the Company and effectively subordinated
to all existing and future liabilities and obligations of the Company's
subsidiaries. As of           , 1997, the total principal amount of Senior Debt
of the Company would have been approximately $    million and other liabilities
and obligations of the Company's subsidiaries (excluding intercompany
indebtedness) that would have effectively ranked senior to the Convertible Notes
would have been approximately $    million. The Convertible Notes are not
redeemable by the Company prior to           , 2001. On or after           ,
2001, the Convertible Notes are redeemable, in whole or from time to time in
part, at the option of the Company, at the redemption prices set forth herein
plus accrued interest, if the closing price of the Common Stock is at least 125%
of the conversion price for at least 20 trading days within a period of 30
consecutive trading days ending on the fifth trading day prior to the notice of
redemption. No sinking fund is provided for the Convertible Notes. In addition,
following the occurrence of a Designated Event (i.e., a Change of Control or
Termination of Trading (each as defined)), each holder has the right to cause
the Company to purchase the Convertible Notes at 101% of their principal amount
together with accrued and unpaid interest. See "Description of Convertible
Notes."

Of the         shares of Common Stock (the "Shares") and $150,000,000
aggregate principal amount of Convertible Notes offered hereby (the "Shares"),
Shares and $        principal amount of Convertible Notes are being
offered by the International Underwriters (as defined herein) outside the United
States and Canada (the "International Offering") and         Shares and
$        principal amount of Convertible Notes are being offered by the U.S.
Underwriters (as defined herein) in a concurrent offering in the United States
and Canada (the "U.S. Offering" and, together with the International Offering,
the "Offerings"), subject to transfers between the International Underwriters
and the U.S. Underwriters (collectively, the "Underwriters"). The Price to the
Public and Underwriting Discount per Share and per Convertible Note will be
identical for the International Offering and the U.S. Offering. See
"Underwriting." The closing of the International Offering and U.S. Offering are
conditioned upon each other. Following the Offerings, certain members of
management and their affiliates will beneficially own     % of the Company's
outstanding Common Stock. See "Principal and Selling Stockholders."

Prior to the Offerings, there has not been a public market for the Common
Stock or the Convertible Notes. It is currently estimated that the initial
public offering price per share of the Common Stock will be between $    and
$    per share. See "Underwriting" for a discussion of factors to be considered
in determining the initial public offering price. The Common Stock has been
approved for listing on the Nasdaq National Market under the symbol "AMKR",
subject to official notice of issuance. The Company intends to apply for
approval of quotation of the Convertible Notes on the Nasdaq Stock Market under
the symbol "AMKRG."

SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES AND THE
CONVERTIBLE NOTES.

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

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.

==============================================================================================================================
UNDERWRITING                                 PROCEEDS TO
PRICE TO            DISCOUNTS AND          PROCEEDS TO             SELLING
THE PUBLIC          COMMISSIONS(1)        THE COMPANY(2)        STOCKHOLDERS(2)
- ------------------------------------------------------------------------------------------------------------------------------
Per Share.................................           $                     $                     $                     $
Per Convertible Note......................           $                     $                     $                    --
Total Shares..............................           $                     $                     $                     $
Total Convertible Notes...................           $                     $                     $                    --
Total(3)..................................           $                     $                     $                     $
==============================================================================================================================

(1) For information regarding indemnification of the Underwriters, see
"Underwriting."

(2) Before deducting expenses payable by the Company, estimated at $        .

(3) The Company has granted the International Underwriters and the U.S.
Underwriters 30-day options to purchase up to         and         additional
shares of Common Stock, respectively, and $        and $        additional
principal amount of Convertible Notes, respectively, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to the Public, Underwriting Discount and Proceeds to the Company will
be $        , $        and $        , respectively. See "Underwriting."

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

The Shares and the Convertible Notes are offered subject to receipt and
acceptance by the Underwriters, to prior sale and to the Underwriters' right to
reject any order in whole or in part and to withdraw, cancel or modify the offer
without notice. It is expected that delivery of the Shares and the Convertible
Notes will be made at the office of Smith Barney Inc., 333 West 34th Street, New
York, New York 10001 or through the facilities of The Depository Trust Company,
on or about             , 1998.

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

SALOMON SMITH BARNEY INTERNATIONAL

BA ROBERTSON STEPHENS INTERNATIONAL LIMITED

COWEN INTERNATIONAL L.P.

, 1998.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.

123

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement
(the "International Underwriting Agreement") among the Company, the Selling
Stockholders and each of the underwriters named below (the "International
Underwriters"), for whom Smith Barney Inc., BancAmerica Robertson Stephens
International Limited and Cowen International L.P. are acting as representatives
(the "International Representatives"), (i) the Company and the Selling
Stockholders have agreed to sell to each of the International Underwriters and
each of the International Underwriters has severally agreed to purchase from the
Company and the Selling Stockholders the aggregate number of Shares set forth
opposite its name in the table below and (ii) the Company has agreed to sell to
certain of the International Underwriters and each such International
Underwriter has severally agreed to purchase from the Company the principal
amount of the Convertible Notes set forth opposite its name below.

PRINCIPAL
AMOUNT OF
NUMBER OF     CONVERTIBLE
INTERNATIONAL UNDERWRITERS             SHARES          NOTES
----------------------------------------------  ---------     ------------

Smith Barney Inc. ............................
BancAmerica Robertson Stephens International
Limited.....................................
Cowen International L.P.......................
---------     ------------
Total...............................
========        ========

The International Underwriting Agreement provides that the obligations of
the International Underwriters to purchase the Shares and Convertible Notes
listed above are subject to certain conditions set forth therein. The
International Underwriters are committed to purchase all of the Shares and
Convertible Notes offered by this Prospectus (other than those covered by the
over-allotment options described below), if any Shares or Convertible Notes are
purchased. In the event of default by any International Underwriter, the
International Underwriting Agreement provides that, in certain circumstances,
the purchase commitments of the non-defaulting International Underwriters may be
increased or the International Underwriting Agreement may be terminated.

The International Representatives have advised the Company and the Selling
Stockholders that the International Underwriters propose initially to offer such
Shares to the public at the initial public offering price thereof set forth on
the cover page of this Prospectus, and to certain dealers at such price less a
discount not in excess of $          per share. The International Underwriters
may allow, and such dealers may reallow, a discount not in excess of $
per share on sales to certain other dealers. After the Offerings, the public
offering price and such discounts may be changed.

The International Representatives have also advised the Company that the
relevant International Underwriters propose initially to offer such Convertible
Notes to the public at the initial public offering price thereof set forth on
the cover page of this Prospectus, and to certain dealers at such price less a
concession not in excess of   % of the principal amount of such Notes. The
relevant International Underwriters may allow, and such dealers may reallow, a
discount not in excess of   % of the principal amount of the Convertible Notes
on sales to certain other dealers. After the initial public offering of the
Convertible Notes, the public offering price and such concessions may be
changed.

Purchasers of the Shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the initial public offering price set forth on the cover
page hereof.

The Company and the Selling Stockholders also have entered into an
underwriting agreement (the "U.S. Underwriting Agreement") with the U.S.
Underwriters named therein, for whom Smith Barney Inc., BancAmerica Robertson
Stephens and Cowen & Company are acting as representatives (the

124

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

"U.S. Representatives" and, together with the International Representatives, the
"Representatives"), providing for the concurrent offer and sale of           of
the Shares and $          principal amount of the Convertible Notes in the
United States and Canada.

The closing with respect to the sale of the Shares and the Convertible
Notes pursuant to the International Underwriting Agreement is a condition to the
closing with respect to the sale of the Shares and the Convertible Notes
pursuant to the U.S. Underwriting Agreement, and the closing with respect to the
sale of the Shares and the Convertible Notes pursuant to the U.S. Underwriting
Agreement is a condition to the closing with respect to the sale of the Shares
and the Convertible Notes pursuant to the International Underwriting Agreement.
The initial public offering price and underwriting discount per Share and per
Convertible Note for the International Offering and the U.S. Offering will be
identical.

Each International Underwriter has severally agreed that, as part of the
distribution of the           Shares and $          principal amount of the
Convertible Notes by the International Underwriters, (i) it is not purchasing
any Shares or Convertible Notes for the account of any United States or Canadian
Person, (ii) it has not offered or sold, and will not offer or sell, directly or
indirectly, any Shares or Convertible Notes or distribute any Prospectus to any
person in the United States or Canada, or to any United States or Canadian
Person and (iii) any dealer to whom it may sell any Shares or Convertible Notes
will represent that it is not purchasing for the account of any United States or
Canadian Person and agree that it will not offer or resell, directly or
indirectly, any Shares or Convertible Notes in the United States or Canada, or
to any United States or Canadian Person or to any other dealer who does not so
represent and agree.

Each U.S. Underwriter has severally agreed that, as part of the
distribution of the Shares and $       principal amount of the Convertible Notes
by the U.S. Underwriters, (i) it is not purchasing any Shares or Convertible
Notes for the account of anyone other than a United States or Canadian Person,
(ii) it has not offered or sold, and will not offer or sell, directly or
indirectly, any Shares or Convertible Notes or distribute any Prospectus
relating to the U.S. Offering to any person outside of the United States or
Canada, or to anyone other than a United States or Canadian Person and (iii) any
dealer to whom it may sell any Shares or Convertible Notes will represent that
it is not purchasing for the account of anyone other than a United States or
Canadian Person and agree that it will not offer or resell, directly or
indirectly, any Shares or Convertible Notes outside of the United States or
Canada, or to anyone other than a United States or Canadian Person or to any
other dealer who does not so represent and agree.

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Agreement Between U.S. Underwriters
and International Underwriters. "United States or Canadian Persons" means any
person who is a national or resident of the United States or Canada, any
corporation, partnership or other entity created or organized in or under the
laws of the United States or Canada or of any political subdivision thereof, and
any estate or trust the income of which is subject to United States or Canadian
federal income taxation, regardless of its source (other than a foreign branch
of such entity) and includes any United States or Canadian branch of a person
other than a United States or Canadian Person.

Pursuant to the Agreement Between U.S. Underwriters and International
Underwriters, sales may be made between the International Underwriters and the
U.S. Underwriters of such number of Shares and such principal amount of the
Convertible Notes as may be mutually agreed. The price of any Shares or
Convertible Notes so sold shall be the initial public offering price thereof set
forth on the cover page of this Prospectus, less an amount not greater than the
concession to securities dealers set forth above. To the extent that there are
sales between the International Underwriters and the U.S. Underwriters pursuant
to the Agreement Between U.S. Underwriters and International Underwriters, the
number of Shares and the principal amount of the Convertible Notes initially
available for sale by the International Underwriters or by the U.S. Underwriters
may be more or less than the amount specified on the cover page of this
Prospectus.

Each International Underwriter has severally represented and agreed that
(i) it has not offered or sold and, prior to the expiration of six months from
the closing of the International Offering, will not offer or sell

125

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

any Shares or the Convertible Notes in the United Kingdom other than to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (whether as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted in and
will not result in an offer to the public within the meaning of the Public
Offers of Securities Regulations 1995; (ii) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Shares or the Convertible Notes in, from
or otherwise involving the United Kingdom; and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Shares or the Convertible
Notes to a person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom such document may otherwise lawfully be issued or passed on.

The Company has granted to the International Underwriters and the U.S.
Underwriters options to purchase up to an additional           and
Shares, respectively, and an additional $       and $       principal amount of
the Convertible Notes, respectively, in each case at the applicable price to
public less the applicable underwriting discount set forth on the cover page of
this Prospectus, solely to cover over-allotments, if any. Such options may be
exercised at any time up to 30 days after the date of this Prospectus. To the
extent such options are exercised, each of the International Underwriters and
the U.S. Underwriters will become obligated, subject to certain conditions, to
purchase approximately the same percentage of such additional shares of Common
Stock or such additional principal amount of Convertible Notes as the percentage
it was obligated to purchase pursuant to the International Underwriting
Agreement or the U.S. Underwriting Agreement, as applicable.

The Company has 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 (other
than the Convertible Notes) or any securities or options convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of 180 days
following the date hereof without the prior written consent of Smith Barney
Inc., 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 the
date hereof unless pursuant to the Securities Loan Agreement or with the prior
written consent of Smith Barney Inc., subject to certain limited exceptions.
Smith Barney Inc. currently does not intend to release any securities subject to
such lock-up agreements, but may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to such lock-up
agreements.

The International Underwriting Agreement and the U.S. Underwriting
Agreement provide that the Company and certain Selling Stockholders will
indemnify the several International Underwriters and U.S. Underwriters against
certain liabilities under the Securities Act, or contribute to payments the
International Underwriters and the U.S. Underwriters may be required to make in
respect thereof.

BancAmerica Robertson Stephens International Limited is an affiliate of
Bank of America, which will be repaid approximately $55 million of short-term
loans to the Company from the net proceeds of the Offerings. See "Use of
Proceeds." Because more than 10% of the net proceeds of the Offerings will be
paid to Bank of America, the Offerings are being conducted in accordance with
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("Rule 2720"). Smith Barney Inc. will serve as a "qualified

126

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

independent underwriter" in the Offerings and, in such capacity, will recommend
a price in compliance with Rule 2720 and has performed due diligence
investigations in accordance with Rule 2720.

Salomon Smith Barney (including certain of its affiliates) Mr. James Kim
and AICL are among the principal shareholders of a securities and investment
banking firm in Korea. In addition, certain of the Underwriters and their
affiliates have been engaged from time to time, and may in the future be
engaged, to perform investment banking and other advisory-related services to
the Company and its affiliates, including certain of the Selling Stockholders,
in the ordinary course of business. In connection with rendering such services
in the past, such Underwriters and affiliates have received customary
compensation, including reimbursement of related expenses.

In connection with the Offerings, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock or
the Convertible Notes. Such transactions may include stabilization transactions
effected in accordance with Rule 104 of Regulation M, pursuant to which such
persons may bid for or purchase Common Stock or Convertible Notes for the
purpose of stabilizing their market price. The Underwriters also may create a
short position for the account of the Underwriters by selling more Common Stock
or the Convertible Notes in connection with the Offerings than they are
committed to purchase from the Company and the Selling Stockholders, and in such
case may purchase Common Stock or Convertible Notes in the open market following
completion of the Offerings to cover all or a portion of such short position.
The Underwriters may also cover all or a portion of such short position, up to
shares of Common Stock and $          principal amount of the
Convertible Notes, by exercising the Underwriters' over-allotment options
referred to above. In addition, the Representatives, on behalf of the
Underwriters, may impose "penalty bids" under contractual arrangements with the
Underwriters whereby it may reclaim from an Underwriter (or dealer participating
in the Offerings), for the account of the other Underwriters, the selling
concession with respect to Common Stock that is distributed in the Offerings but
subsequently purchased for the account of the Underwriters in the open market.
Any of the transactions described in this paragraph may result in the
maintenance of the price of the Common Stock and the Convertible Notes at a
level above that which might otherwise prevail in the open market. None of the
transactions described in this paragraph is required, and, if they are
undertaken, they may be discontinued at any time.

In connection with the Offerings, Mr. James Kim and Mrs. Agnes Kim
(referred to herein as the "Lenders") and Smith Barney Inc. intend to enter into
a securities loan agreement (the "Securities Loan Agreement") which provides
that, subject to certain restrictions and with the agreement of the Lenders,
Smith Barney Inc. may from time to time for a period of up to      months
borrow, return and reborrow up to 3.0 million shares of Common Stock from the
Lenders (the "Borrowed Securities"); provided, however, that the number of
Borrowed Securities at any time may not exceed 3.0 million shares of Common
Stock, subject to adjustment for certain dilutive events. The Securities Loan
Agreement is intended to facilitate market-making activity in the Convertible
Notes by Smith Barney Inc. Smith Barney Inc. may from time to time borrow shares
of Common Stock under the Securities Loan Agreement to settle short sales of
Common Stock entered into by Smith Barney Inc. 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 Smith Barney
Inc.'s market-making transactions in the Convertible Notes and the consequent
need to borrow and sell shares of Common Stock. The availability of shares of
Common Stock under the Securities Loan Agreement 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 engaged in by Smith Barney Inc. or any
other Underwriter 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, which is an exhibit to the
Securities Loan Registration Statement.

The Underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.

127

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

Prior to the Offerings, there has been no public market for the Common
Stock. Accordingly, the initial public offering price for the Shares will be
determined by negotiation among the Company, the Selling Stockholders and the
Representatives. Among the factors considered in determining the initial public
offering price will be the Company's record of operations, its current financial
condition, its future prospects, the market for its services, the experience of
management, the economic conditions of the Company's industry in general, the
general condition of the equity securities market and the demand for similar
securities of companies considered comparable to the Company and other relevant
factors. There can be no assurance, however, that the prices at which the Common
Stock will sell in the public market after the Offerings will not be lower than
the price at which the Shares are sold by the Underwriters.

LEGAL MATTERS

The validity of the Common Stock and Notes offered hereby will be passed
upon for the Company by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California. Cleary, Gottlieb, Steen & Hamilton, New
York, New York, is acting as counsel for the Underwriters in connection with
certain legal matters relating to the shares of Common Stock and Notes offered
hereby.

EXPERTS

The consolidated financial statements and schedule of the Company as of
December 31, 1995, 1996 and September 30, 1997, and for each of the years in the
three-year period ended December 31, 1996 and for the nine month period ended
September 30, 1997, included in this Registration Statement (as defined below)
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports dated October 31, 1997 with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.

Reference is made to said reports which include an explanatory paragraph
with respect to the ability of the Company to continue as a going concern as
discussed in Note 1 of Notes to the Consolidated Financial Statements.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act with respect to the securities offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company, the Common Stock and the Convertible
Notes, reference is made to the Registration Statement and the exhibits and
schedules filed as a part thereof. Statements contained in this Prospectus as to
the contents of any contract or any other document referred to are not
necessarily complete. In each instance, reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement, and each
such statement is qualified in all respects by such reference. The Registration
Statement, including exhibits and schedules thereto, may be inspected without
charge at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at Seven World Trade Center, Suite 1300, New York, New York
10048 and Northwestern Atrium Center, 500 Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates and through the National Association of Securities
Dealers, Inc. located at 1735 K Street, N.W., Washington, D.C. 20006. 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.

128

[Alternate pages for International Prospectus]

======================================================

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, THE SELLING STOCKHOLDERS OR ANY OF THE UNDERWRITERS.
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
----

Prospectus Summary.....................   3
Risk Factors...........................   9
Reorganization.........................  24
Relationship with Anam Industrial Co.,
Ltd..................................  25
Use of Proceeds........................  28
Dividend Policy........................  28
Capitalization.........................  29
Dilution...............................  30
Selected Consolidated Financial Data...  31

Management's Discussion and Analysis of
Financial Condition and Results of
Operations...........................  33
Business...............................  43
Management.............................  58
Certain Transactions...................  63
Principal and Selling Stockholders.....  65
Description of Capital Stock...........  66
Description of Convertible Notes.......  68
Shares Eligible for Future Sale........  81
Certain United States Federal Tax
Consequences to Holders of Common
Stock and Convertible Notes..........  83
Underwriting...........................  88
Legal Matters..........................  92
Experts................................  92
Additional Information.................  92
Glossary...............................  93
Index to Consolidated Financial
Statements........................... F-1

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

Until          , 1998 (25 days after the commencement of the Offerings), all
dealers effecting transactions in the Common Stock and Convertible Notes,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as Underwriters and with respect to their unsold
allotments or subscriptions.

======================================================
======================================================

SHARES

COMMON STOCK

$150,000,000

% CONVERTIBLE

SUBORDINATED NOTES

DUE 2003

AMKOR

TECHNOLOGY, INC.

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

PROSPECTUS

, 1998

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

SALOMON SMITH BARNEY

INTERNATIONAL

BA ROBERTSON STEPHENS

INTERNATIONAL LIMITED

COWEN

INTERNATIONAL L.P.

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

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

129

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 NASD filing fee.

SEC Registration Fee..............................................  $172,858
NASD Filing Fee...................................................    30,500
Nasdaq National Market System Listing Fee.........................    50,000
Printing Fees and Expenses........................................     *
Legal Fees and Expenses...........................................     *
Accounting Fees and Expenses......................................     *
Blue Sky Fees and Expenses........................................     5,000
Transfer Agent and Registrar Fees.................................     *
Miscellaneous.....................................................     *
----------
Total...................................................  $  *
==========

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

* To be provided by amendment.

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

The Registrant's Bylaws provide for the indemnification of officers,
directors and third parties acting on behalf of the Registrant 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 Registrant, and, with respect to any criminal action
or proceeding, the indemnified party had no reason to believe his conduct was
unlawful.

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

The form of Underwriting Agreement filed as Exhibit 1.1 hereto provides for
the indemnification of the Registrant's directors and officers in certain
circumstances as provided therein.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In                , 1998, 82,610,000 shares of the Company's Common Stock
and 5,000 shares of Series A Preferred 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 Registrant.

II-1

130

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) Exhibits

1.1    Form of U.S. Underwriting Agreement.*
1.2    Form of International Underwriting Agreement.*
3.1    Certificate of Incorporation.**
3.2    Bylaws.**
4.1    Specimen Common Stock Certificate.*
4.2    Form of Indenture dated                     , 1998.*
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    Tax Indemnification Agreement dated             , 1997 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.+**
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                     , 1998.*

II-2

131

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                     , 1998.*
10.21   Amendment to Technical Assistance Agreement dated as of September   , 1997
between Texas Instruments Incorporated and Anam Industrial Co., Ltd. and related
portions of Technical Assistance Agreement dated as of January 28, 1997.+
12.1    Ratio of Earnings to Fixed Charges.*
21.1    List of Subsidiaries of the Registrant.*
23.1    Consent of Independent Public Accountants.
23.2    Consent of Counsel (included in Exhibit 5.1).*
24.1    Power of Attorney.
25.1    Statement of Eligibility of Trustee on Form T-1.*
27.1    Financial Data Schedule.

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

* To be filed by amendment.

** Previously Filed.

+ 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

The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.

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 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.

II-3

132

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this 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 29th day of December 1997.

AMKOR TECHNOLOGY, INC.

By:       /s/ JAMES J. KIM

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

James J. Kim

Chief Executive Officer and
Secretary

POWER OF ATTORNEY

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 to sign any registration
statement for the same Offering covered by this Registration Statement that is
to be effective upon filing pursuant to Rule 462(b) promulgated under the
Securities Act of 1933, and all post-effective amendments thereto, and to file
the same, with exhibits thereto and other documents in connection therewith,
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      December 29, 1997
- ------------------------------------------     Chairman
James J. Kim

/s/ FRANK J. MARCUCCI              Chief Financial Officer and      December 29, 1997
- ------------------------------------------     Secretary (Principal
Frank J. Marcucci                  Financial and Accounting
Officer)

/s/ JOHN N. BORUCH               President and Director           December 29, 1997
- ------------------------------------------
John N. Boruch

/s/ THOMAS D. GEORGE              Director                         December 29, 1997
- ------------------------------------------
Thomas D. George

/s/ GREGORY K. HINCKLEY             Director                         December 29, 1997
- ------------------------------------------
Gregory K. Hinckley

/s/ LOUIS J. SIANA               Director                         December 29, 1997
- ------------------------------------------
Louis J. Siana

II-4

133

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

134

After the Reorganization transaction discussed in Note 1 to the Amkor
Technology, Inc. and subsidiaries' consolidated financial statements is
effected, we expect to be in position to render the following audit report.

October 31, 1997

ARTHUR ANDERSEN LLP

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 subsidiaries
included in this registration statement and have issued our report thereon dated
, 1997. Our audit was made for the purpose of forming an opinion on
the basic financial statements taken as a whole. Our report on the financial
statements includes an explanatory paragraph with respect to the ability of the
Company to continue as a going concern as discussed in Note 1 to the
Consolidated Financial Statements. 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.

S-2

135

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, 1994:
Allowance for doubtful
accounts................    $      524     $      500     $    (546)    $      9     $      487
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
Nine months ended September
30, 1997:
Allowance for doubtful
accounts................    $    1,179     $    1,310     $      --           --     $    2,489

S-3

136

INDEX TO EXHIBITS

EXHIBIT
NUMBER                                      DESCRIPTION
------    -------------------------------------------------------------------------------

1.1      Form of U.S. Underwriting Agreement.*
1.2      Form of International Underwriting Agreement.*
3.1      Certificate of Incorporation.**
3.2      Bylaws.**
4.1      Specimen Common Stock Certificate.*
4.2      Form of Indenture dated           , 1998.*
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      Tax Indemnification Agreement dated             , 1997 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 Electonics, 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                     , 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
, 1998.*
10.21     Amendment to Technical Assistance Agreement dated as of September 30, 1997
between Texas Instruments Incorporated and Anam Industrial Co., Ltd.+
12.1      Ratio of Earnings to Fixed Charges.*
21.1      List of Subsidiaries of the Registrant.*
23.1      Consent of Independent Public Accountants.

137

EXHIBIT
NUMBER                                      DESCRIPTION
------    -------------------------------------------------------------------------------

23.2      Consent of Counsel (included in Exhibit 5.1).*
24.1      Power of Attorney (see page II-4).
25.1      Statement of Eligibility of Trustee on Form T-1.*
27.1      Financial Data Schedule.

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

* To be filed by amendment.

** Previously Filed.

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

1
EXHIBIT 10.18

PERFORMANCE UNDERTAKING

June 20, 1997

Amkor Receivables Corp.
Goshen Corporate Park
1345 Enterprise Drive
West Chester, Pennsylvania 19380

Ladies and Gentlemen:

Reference is made to (i) that certain Receivables Purchase Agreement (as
the same may from time to time hereafter be amended, restated, supplemented or
otherwise modified, the "Purchase Agreement") dated as of June 20, 1997 between
Amkor Electronics, Inc. (the "Originator") and Amkor Receivables Corp. (the
"Seller") and (ii) that certain Investor Agreement (as the same may from time to
time hereafter be amended, restated, supplemented or otherwise modified, the
"Investor Agreement") dated as of June 20, 1997 among the Seller, Falcon Asset
Securitization Corporation ("Falcon"), certain financial institutions thereto
(the "Investors") (Falcon and the Investors being referred to, collectively, as
the "Purchasers") and The First National Bank of Chicago, as agent (the "Agent")
for the Purchasers thereunder. Unless otherwise defined herein, capitalized
terms used herein shall have their meaning as defined in the Purchase Agreement.

To induce the Seller to enter into the Purchase Agreement, we hereby
agree to perform the obligations set forth in this Performance Undertaking (this
"Agreement").

1.     Performance Undertaking. We hereby unconditionally and
irrevocably agree with and undertake to the Seller and its assigns that we will
ensure that the Originator shall at all times have sufficient funds, whether it
be by capital contribution, loan to the Originator, arrangement with third
parties to provide funds to the Originator or otherwise (and in each case
remitted to an account specified by the Seller for the benefit of the
Originator), to enable the Originator to make full and prompt payment and
perform and observe all covenants, agreements, terms, conditions and indemnities
under and pursuant to the Purchase Agreement and each other document executed
and delivered by the Originator pursuant to or in connection with the Purchase
Agreement (collectively, the "Obligations"). The Obligations shall include,
without limitation, all obligations of the Originator as "Sub-Servicer" under
the Purchase Agreement.

The Seller shall be at liberty, without giving notice to us or obtaining
our assent and without relieving us of any of our liabilities under this
Agreement, to deal with the Originator and with each other party who now is or
after the date hereof becomes obligated in any manner for any of the
Obligations, in such manner as the Seller in its sole discretion deems fit, and
to this end we agree that the validity and enforceability of this Agreement
shall not be impaired or

2

affected by any of the following: (a) any waiver, extension, modification or
renewal of, or indulgence with respect to, or substitutions for, the Obligations
or any part thereof or any agreement relating thereto at any time; (b) any
failure or omission to enforce any right, power or remedy with respect to the
Obligations or any part thereof or any agreement relating thereto, or with
respect to any collateral securing the Obligations or any part thereof, (c) the
existence of any claim, set-off or other rights which we may have at any time
against the Originator in connection herewith or any unrelated transaction; or
(d) any failure on the part of the Originator to perform or comply with any term
of the Purchase Agreement or any other document executed in connection therewith
or delivered thereunder, all whether or not we shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (a)
through (d).

This Agreement is absolute, unconditional and continuing and is in no
way conditioned upon any requirement that the Seller first take any action
against the Originator with respect to the Obligations or proceed against any
collateral security, any balance of any deposit account or credit on the books
of the Seller in favor of the Originator, any guarantor of the Obligations or
any other Person. Our liability under this Agreement shall be absolute and
unconditional irrespective of (i) any lack of validity or enforceability of any
material provision of the Purchase Agreement, the Investor Agreement or any
other document executed in connection therewith or delivered thereunder, (ii)
any change in the time, manner or place of payment of, or in any other term of,
all or any of the Obligations, or any other amendment or waiver of or any
consent to departure from the Purchase Agreement, the Investor Agreement or any
other document executed in connection therewith or delivered thereunder, (iii)
any taking, exchange, release or non- perfection of any collateral, or any
taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Obligations, (iv) any law, regulation or order
of any jurisdiction affecting any term of all or any Obligations or the rights
of the Seller, (v) any manner of application of collateral, or proceeds thereof
to all or any of the Obligations, or any manner of sale or other disposition of
any collateral for all or any of the Obligations or any other assets of the
Originator, (vi) any change, restructuring or termination of the corporate
structure or existence of the Originator, or (vii) any other circumstance which
might otherwise constitute a defense available to, or a discharge of, the
Originator or a guarantor. Our Obligations hereunder shall not be stayed,
discharged or modified by any insolvency, bankruptcy or reorganization of the
Originator. This Agreement shall be in addition to any guaranty or security for
the Obligations, and it shall not be rendered unenforceable by the invalidity,
release or modification at any time of any such guaranty or security.

We, agree that our obligations under this Agreement shall continue in
full force and effect until all Obligations are finally satisfied in full and
the Purchase Agreement and the Investor Agreement are terminated, but we agree
that our undertakings under this Agreement win be reinstated, if at any time the
satisfaction of any of the Obligations is rescinded or must otherwise be
restored or returned, as though such satisfaction had not occurred.

In the event that we fail to perform any of our obligations in this
Agreement, we further agree, to pay to the Seller forthwith upon demand all
reasonable costs and expenses (including

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court costs and legal expenses) incurred by the Seller in connection with the
enforcement Of this Agreement.

2.     Waiver. We agree to waive any notice of (a) acceptance of this
Agreement, (b) any action taken or omitted by the Seller in reliance on this
Agreement or (c) an Event of Default, "Servicer Default" (as defined under the
Investor Agreement), default or omission by the Originator or assertion of any
rights of the Seller under this Agreement. We agree that a failure by the Seller
to be diligent or prompt in making demands under this Agreement shall not affect
our obligations under this Agreement. We also irrevocably waive all defenses
that at any time may be available in respect of the Obligations.

We agree to waive all "claims" (as that term is defined in the United
States Bankruptcy Code) which we might now have or hereafter acquire against the
Originator that arise from the existence or performance of our agreements under
this Agreement.

3.     Payments Free and Clear of Taxes, Etc. Any and all payments made
by us hereunder shall be made free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on the income of the Seller and franchise taxes imposed on the Seller by the
jurisdiction under the laws of which the Seller is organized and by any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If we shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Seller, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions the
Seller receives an amount equal to the sum it would have received had no such
deductions been made, (ii) we shall make such deductions and CM) we shall pay
the full amount deducted to the relevant taxation, authority or other authority
in accordance with applicable law.

In addition, we agree to pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement (hereinafter
referred to as "Other Taxes").

We will indemnify the Seller for the full amount of Taxes or Other Taxes
paid by the Seller and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date the Seller makes written demand therefor.

Within 30 days after the date of any payment of Taxes, we will furnish
to the Seller at its address referred to in this Agreement, the original or a
certified copy of a receipt evidencing payment thereof. If no Taxes are payable
in respect of any payment hereunder to the Seller, we will furnish to the Seller
a certificate from each appropriate taxing authority, or an opinion of

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counsel acceptable to the Seller, stating that such payment is exempt from or
not Subject to Taxes.

4.     Judgment. If for the purposes of obtaining judgment in any court
it is necessary to convert a sum due hereunder in U.S. Dollars into another
currency, we agree, to the fullest extent that we may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase U.S. Dollars, with such other
currency in Chicago, Illinois or New York; New York (as the Agent may elect) at
10:00 A.M. applicable local time on the Business Day preceding that on which
final judgment is given.

Our obligation in respect of any sum due from us to the Seller hereunder
shall, notwithstanding any judgment in a currency other than U.S. Dollars, be
discharged only to the extent that on the Business Day following receipt by the
Seller of any sum adjudged to be so due in such other currency the Seller may in
accordance with normal banking procedures purchase U.S. Dollars with such other
currency; if the U.S. Dollars so purchased are less than the sum originally due
to the Seller in U.S. Dollars, we agree, as a separate obligation and
notwithstanding any such judgment, to indemnify the Seller against such loss,
and if the U.S. Dollars so purchased exceed the sum originally due to the Seller
in U.S. Dollars, the Seller agrees to remit to us such excess.

5.     Consent to Jurisdiction; Waiver of Immunities. We hereby
irrevocably submit to the jurisdiction of any Illinois State or Federal court
sitting in Chicago, Illinois and any appellate court from any thereof in any
action or proceeding arising out of or relating to this Agreement, and we hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such Illinois State court or in such Federal court, We
hereby irrevocably waive, to the fullest extent we may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding. We hereby irrevocably appoint Anam USA, Inc. (the "Process Agent"),
with an office on the date hereof at Goshen Corporate Park, 1345 Enterprise
Drive, West Chester, PA 19380, as our agent to receive on behalf of us and our
property service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding. Such service may be made
by mailing or delivering a copy of such proem to us ir care of the Process Agent
at the Process Agent's above address, and we hereby irrevocably authorizes and
directs the Process Agent to accept such service on our behalf. As an
alternative method of service, we also irrevocably consent to the service of any
and all process in any such action or proceeding by the mailing of copies of
such process to us at our address specified on the signature page to this
Agreement (or at such other address as we may from time to time notify you in
writing). We agree that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

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Nothing in this Agreement shall affect the Tight of the Seller to serve
legal process in any other manner permitted by law or affect the right of the
Seller to bring any action or proceeding against us or our property in the
courts of any other jurisdictions.

To the extent that we have or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to us or our property, we hereby irrevocably waive
such immunity in respect of our obligations under this Agreement and, without
limiting the generality of the foregoing, agree that the waivers set forth in
this Agreement shall have the fullest scope permitted under the Foreign
Sovereign Immunities Act of 1976 of the, United States and are intended to be
irrevocable for purposes of such Act.

6.     Representations and Warranties. We hereby represent and warrant
as follows:

(a)    We are a corporation duly organized and validly existing
under the laws of Korea, and have all corporate power and all governmental
licensee, authorizations, consents and approvals required to carry on our
business in each jurisdiction in which our business is conducted.

(b)    The execution, delivery and performance by us of this
Agreement is within our corporate powers, has been duly authorized by all
necessary corporate action, does not contravene or violate (i) our articles of
incorporation or bylaws, (ii) any law, rule or regulation applicable to us,
(iii) any restrictions under any agreement, contract or instrument to which we
are a party or by which we or any of our property is bound, or (iv) any order,
writ, judgment award, injunction or decree binding on or affecting us or our
property. This Agreement has been duly authorized, executed and delivered by us.

(c)    No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by us of this
Agreement, except for any necessary foreign exchange approval which may be
required at the time of performance of this Agreement.

(d)    This Agreement constitutes our legal, valid and binding
obligation, enforceable against us in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity, regardless of whether enforcement is sought in a
proceeding in equity or at law.

(e)    All information heretofore furnished by us to the Seller
for purposes of or in connection with this Agreement is, and all such
information hereafter furnished by us to the Seller will be, true and accurate
in every material respect, on the date such information is stated or certified
and does not and will not contain any material misstatement of fact or omit to
state a material fad or any fact necessary to make the statements contained
herein not misleading.

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(f)    Our financial statements dated December 31, 1996 furnished
by us to the Seller are materially complete and correct, and such financial
statements have been prepared in accordance with generally accepted accounting
principals consistently applied and fairly present our financial condition and
results of operations as of such date and for the period ended on such date.
Since December 31, 1996 no event has occurred which would have a material
adverse effect an our financial condition, business or operations or on our
ability to perform our obligations under this Agreement.

(g)    There are no actions, suits or proceedings pending, or to
the best of our knowledge, threatened, against or affecting us, or any of our
properties, in or before any court, arbitrator or other body, which are
reasonably likely to have a material adverse effect on our financial condition,
business or operations or on our ability to perform our obligations under this
Agreement. We are not in default with respect to any order of any court,
arbitrator or governmental body.

(h)    Each of the representations and warranties of the
Originator under the Purchase Agreement and each of the other Transaction
Documents is, and will be, true and correct on and as of each date when made
thereunder. At no time will any of the Receivables be reduced or cancelled as a
result of any set-off, discount or adjustment.

7.     Covenants. We hereby covenant and agree, so long as the Purchase
Agreement and Investor Agreement shall remain in effect, that unless the Seller
shall otherwise consent in writing;

(a)    We will maintain a system of accounting established and
administered in accordance with generally accepted accounting principles, and
furnish to the Seller:

(i)    within 90 days after the close of each of our
fiscal year financial statements for such fiscal year certified
in a manner acceptable to the Seller by independent public
accountants acceptable to the Seller;

(ii)   within 60 days after the close of the first
six-month period of each of our fiscal years, balance sheets as
at the close of such period and statements of income and
retained earnings and a statement of cash flows for the period
from the beginning of such fiscal year to the and of such
period, all certified by our chief financial officer,

(iii)  together with the financial statements required
hereunder, a compliance certificate setting forth calculations
demonstrating out compliance with the covenants contained in
Section 8 hereof, certifying the attached financial statements
and otherwise in substantially the form of Exhibit IV to the
Purchase Agreement, signed by our corporate comptroller or chief
financial officer and

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dated the date of such annual financial statement or such
semi-annual financial statement, as the case may be; and

(iv)   such other information (including non-financial
information) as the Seller way from time to time reasonably
request.

(b)    We will notify the Seller in writing after we become aware
of the occurrence of each Event of Default or each Potential Event of Default,
by a statement of our corporate comptroller or senior financial officer setting
forth the details of such Event of Default or such Potential Event of Default
and the action we have taken and propose to take with respect thereto.

(c)    We will notify the Seller in writing upon leaning of the
entry of any judgment or decree against us or any of our Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against us and
our Subsidiaries exceeds $250,000.

(d)    We will comply in all respects with all applicable laws,
rules, regulations, orders writs, judgments, injunctions, decrees or awards to
which we may be subject.

(e)    We acknowledge that the Purchasers are entering into the
transactions contemplated by the Investor Agreement in reliance upon the
Seller's identity as a separate legal entity from the Originator. We shall
refrain from taking any action that would suggest to any creditor of the
Originator or the Seller that the Originator and the Seller are anything other
than separate legal entities. We shall not hold out the Originator to third
parties as liable for the debts of the Seller and we shall not represent to any
Person that the Originator owns any interest in the Receivables or any of the
other assets intended to have been acquired by the Seller under the Purchase
Agreement.

8.     Financial Covenants. We hereby further covenant and agree, so
long as the Purchase Agreement and Investor Agreement shall remain in effect,
that unless the Seller shall otherwise consent in writing we shall cause:

(a)    The ratio of our Total Liabilities to our Tangible Net
Worth as of the end of any fiscal year to not exceed:

(i)    as at the end of 1997, 5.76 to 1;

(ii)   as at the end of 1998, 4.62 to 1;

(iii)  as at the end of 1999, 3.79 to 1; and

(iv)   as at any date thereafter, 3.21 to 1.

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(b)    The ratio of the Total Liabilities to Tangible Not Worth
in respect of the Originator as of the end of any fiscal quarter to not exceed
6.50 to 1 at any time.

(c)    The ratio of our EBITDA to our Interest Expense, as of the
end of any fiscal year and calculated in respect of the 12 month period then
ended, to equal or exceed:

(i)    as at the end of 1997, 2.25 to 1;

(ii)   as at the end of 1998, 2.76 to 1; and

(iii)   as at any date thereafter, 3.00 to 1.

(d)    The ratio of EBIT to Interest Expense in respect of the
Originator, as of the end of my fiscal quarter and calculated in respect of the
12 month period then ended, to equal or exceed 1.25 to 1 at all times.

For purposes of this Section 8, the following terms have the meanings assigned
below:

"EBIT" means, with respect to any entity for any accounting
period, net income (or net loss) (excluding extraordinary items) plus
any amount which, in the determination of net income (or net loss) for
such period, has been deducted for (a) interest expense and (b) income
tax expense, in each case determined in accordance with generally
accepted accounting principles consistently applied.

"EBITDA" means, with respect to any entity for any accounting
period, net income (or net loss) (excluding extraordinary items) plus
any amount which, in the determination of net income (or not loss) for
such period, has been deducted for (a) interest expense, (b) income tax
expense, and (c) depreciation or amortization expense, in each case
determined in accordance with generally accepted accounting principles
consistently applied.

"Interest Expense" means, with respect to any entity for any
accounting period, the gross interest expense of such entity during such
accounting period, determined in accordance with generally accepted
accounting principles consistently applied.

"Tangible Net Worth" means, with respect to any entity, the
excess of total assets over total liabilities, total assets and total
liabilities each to be determined in accordance with generally accepted
accounting principles, excluding, however, from the determination of
total assets goodwill, organizational expenses, research and

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development expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof, unrealized
gains (losses) on marketable securities, and equity adjustments from
foreign currency translation and other items which are treated as
intangibles in conformity with generally accepted accounting principles.

"Total Liabilities" means, with respect to any entity, all
obligations which in accordance with generally accepted accounting
principles would be included in determining total liabilities as shown
on the liabilities side of a balance sheet of such entity, including
without limitation, all indebtedness for borrowed money.

9.     Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including, telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered to us at our address set forth on the signature pages
hereto, and if to the Seller at its address specified in the Purchase Agreement,
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other party. All such notices and other
communications shall, when mailed, telecopied, telegraph, telexed or cabled, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answer back or delivered to the cable company,
respectively

10.    Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS,
BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

11.    Successors and Assigns. This Agreement shall be binding upon us,
our successors and assigns and shall inure to the benefit of the Seller and its
successors and assign. We acknowledge and consent to the assignment by the
Seller, under and in connection with the Investor Agreement, of all of the
Seller's right, title and interest in, to and under this Agreement to the Agent
and the Purchasers, and we agree that at all times that the Investor Agreement
shall be in effect, (i) any claim made by the seller hereunder shall be deemed
made for the benefit of the Agent and the Purchasers and (ii) any payment or
remittance to be made hereunder by us in respect of any claim being made by or
in respect of the Seller or the Seller's interest under the Purchase Agreement
shall be paid or remitted to the Agent for the benefit of the Purchasers.

At your request we will sign such documents and take such actions as you
may consider necessary to give full effect to this Agreement and to perfect and
preserve the rights and powers of the Seller hereunder. We agree that we cannot
assign or transfer any of our obligations under this Agreement unless you agree
otherwise. We understand that no provision of this Agreement can be amended or
modified except by writing signed by the Seller and us. We agree that a failure
or delay in your exercise of any rights you might have as a result of this
Agreement won't preclude your exercise of any of such rights.

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12.    Enforceability. If for any reason any provision of this Agreement
is held by a court to be invalid or unenforceable, that shall not affect the
validity or enforceability of any of the other provisions of this Agreement.

13.    Assignees. The Seller (and any assignee of the Seller) may at any
time assign any and all of its rights hereunder to any other person or entity
without the consent of the Originator, whereupon (i) each reference herein to
the "Seller" shall mean and be a reference to such assignee and (ii) such
assignee may enforce this Agreement to the fullest extent as if it were named
party hereto. Without limiting the generality of the following, the undersigned
acknowledges that the Seller intends to assign all of its right title and
interest under this Agreement to the Agent for the benefit of the Purchasers.
The undersigned shall not assign any of its rights or delegate any of its
obligations hereunder without the prior written consent of the Seller (or the
applicable assignee).

Very truly yours,

ANAM INDUSTRIAL CO., LTD.

By: ____________________________________
Name: Hong Taek Chung
Title: Authorized Representative

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ASSIGNMENT

The undersigned hereby assigns all of its right, title and interest in
and to the foregoing performance Undertaking to the Agent for the benefit of the
Purchasers. Anam, industrial Co., Ltd. ("Anam Industrial") acknowledges such
assignment, and agrees that the Agent may further assign, without notice, its
right, title and interest in and to the Performance Undertaking without the
consent of any person or entity. The Agent, as the assignee of the Seller, shall
have the right to enforce the Performance Undertaking and to directly exercise
all of the Sellers rights, and remedies under the Performance Undertaking, and
Anam Industrial agrees to cooperate fully with the Agent in the exercise of such
rights and remedies thereunder. Anam Industrial further agrees to give the Agent
copies of all notices it is required to give to the Seller under the Performance
Undertaking and to permit the Agent and Purchasers (and their assignees) the
right of inspection and audit granted to the Seller thereunder.

Dated: June 20, 1997

AMKOR RECEIVABLES CORP.

By: ____________________________________
Name: Frank J. Marcucci
Title: President

Acknowledged and agreed to
this 20th day of June, 1997

ANAM INDUSTRIAL CO., LTD

By: ____________________________
Name: Hong Taek Chung
Title: Authorized Representative

Address:

280-9, 2GA Sungsu-Dong, Sungdong-Gu
Seoul, Korea

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ASSIGNMENT

The undersigned hereby assigns all of its right, title and interest in
and to the foregoing Performance Undertaking to the Agent for the benefit of the
Purchasers. Anam Industrial Co., Ltd. ("Anam Industrial") acknowledges such
assignment, and agrees that the Agent may further assign, without notice, its
right, title and interest in and to the Performance Undertaking without the
consent of any person or entity. The Agent, as the assignee of the Seller, shall
have the right to enforce the Performance Undertaking and to directly exercise
all of the Seller's rights and remedies under the Performance Undertaking, and
Anam Industrial agrees to cooperate fully with the Agent in the exercise of such
rights and remedies thereunder. Anam Industrial further agrees to give the Agent
copies of all notices it is required to give to the Seller under the Performance
Undertaking and to permit the Agent and Purchasers (and their assignees) the
right of inspection and audit granted to the Seller thereunder.

Dated:  June 20, 1997

AMKOR RECEIVABLES CORP.

By: ____________________________________
Name: Frank J. Marcucci
Title: President

Acknowledged and agreed to
this 20th day of June, 1997

ANAM INDUSTRIAL CO., LTD.

By: _____________________________
Name:
Title:

Address:

280-9, 2GA Sungsu-Dong, Sungdong-Gu
Seoul, Korea

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Exhibit 10.21

AMENDMENT TO TECHNICAL ASSISTANCE AGREEMENT

THIS AMENDMENT (this "Amendment"), dated as of September __, 1997, is made by
and between Texas Instruments Incorporated, a Delaware corporation with its
principal place of business at 13500 North Central Expressway, Dallas, Texas
75265, USA ("TI") and Anam Industrial Co., Ltd, a corporation of the Republic
of Korea, with its principal place of business at Seoul, Republic of Korea
("Anam") to the Technical Assistance Agreement (the "TAA"), dated January 28,
1997, by and between TI and Anam.

RECITALS:

WHEREAS, Anam and Amkor Electronics, Inc., ("Amkor") have agreed, inter alia,
that Anam will market and sell all of Anam's output from the foundry that is
the subject of the TAA exclusively through Amkor and certain of its affiliates;

WHEREAS, Amkor is a subsidiary of Amkor Technologies, Inc., a Delaware
corporation that intends to engage in a public offering of its stock in the
United States; and

WHEREAS, Anam and TI wish to amend the TAA to recognize that all purchases of
TI products (as such term is defined in the TAA) will take place through Amkor;

NOW THEREFORE, for and in consideration of the mutual promises and covenants
contained herein, Anam and TI, intending to be legally bound, hereby agree as
follows.

1.   DEFINITIONS. Each capitalized and italicized term not defined herein has
the meaning set forth in the TAA.

2.   AMENDMENT TO ARTICLE 8. The following is added as Section 8.01.08 to
Article 8 of the TAA:

8.01.08   Purchases of TI Products from Amkor Electronics, Inc.

(a)  The Parties agree that all purchases of TI Products by TI
hereunder will be made by TI from Amkor Electronics, Inc.
("Amkor") and that all sales of TI Products hereunder will
be made by Amkor to TI.

(b)  Anam shall enter into an agreement with Amkor obligating
Amkor to fulfill all of the obligations of Anam to TI
hereunder with in connection with the sale of TI Products,
including all of the obligations of Anam under this Article
8, under which agreement TI shall expressly be named a
third party beneficiary with respect to such obligations.

(c)  Anam will assign (in whole or in part) its rights to
receive payment from TI for TI Products to Amkor;

(d)  Anam shall provide TI with all information and assistance
necessary to enable TI to purchase TI Products from Amkor
in the same manner, and 

2

[EXECUTION COPY]

under the same terms as TI is otherwise entitled to purchase
such TI Products from Anam hereunder. Without limiting the
foregoing, Anam shall guarantee Amkor's performance,
including undertaking the performance of Amkor's obligations
should Amkor fail to perform the obligations set forth in
this Article 8 to TI's reasonable satisfaction.

(e)  Nothing set forth herein shall limit either TI's
obligations to purchase TI Products in accordance with this
Agreement or Anam's obligations to sell such TI Products to
TI in accordance with this Agreement.

3.   NO TRANSFER OF INFORMATION.  Nothing set forth in this Amendment, as
such, authorizes Anam to provide any technology information received from TI to
Amkor.

4.   GOVERNING LAW.  This amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of Texas, U.S.A., as
applicable to contracts made and fully performed in the State of Texas.

5.   COUNTERPARTS.  This Amendment may be executed in counterparts which, taken
together, shall be considered one and the same agreement.

IN WITNESS WHEREOF, and intending to be legally bound hereby, TI and Anam have
caused their duly authorized representatives to execute this Amendment.

ANAM INDUSTRIAL CO., LTD                      TEXAS INSTRUMENTS INCORPORATED

By: /s/ IN KIL HWANG                          By:  /s/ K. BALA
-----------------------------                 -----------------------------
Name:   In Kil Hwang                          Name:   K. Bala
Title:  President & CEO                       Title:  Senior Vice President
Semiconductor Group

Date: September 30, 1997                      Date:  9-29-97
------------------------                      ------------------------

2

3

TECHNICAL ASSISTANCE AGREEMENT

This Technical Assistance Agreement, including the attachments hereto (the
"Agreement"), dated as of January 28, 1997 is made by and between TEXAS
INSTRUMENTS INCORPORATED, a Delaware, U.S.A. corporation, with its principal
place of business at 13500 North Central Expressway, Dallas, Texas 75265, U.S.A.
("TI"), and ANAM INDUSTRIAL CO., LTD., a corporation of the Republic of Korea,
with its principal place of business at Seoul, Republic of Korea ("Anam"). TI
and Anam are hereinafter referred to individually by their respective names or
as Party and collectively as Parties.

***

[Pursuant to section 16.04 hereof the parties to this agreement have not
consented to disclosure of the omitted material.]

***

4
ARTICLE 8
TI LOADING OPTION, PRICING, SALES TERMS AND CONDITIONS,
REPRESENTATIONS AND WARRANTIES

8.01    TI PURCHASE OF PRODUCTS

8.01.01 Loading Obligations and Option to Purchase TI Products.

(a)(i) The Parties agree that throughout the Term: (i) Anam
shall sell to TI and/or TI's Affiliates (individually or
collectively), and (ii) TI and/or TI's

5
Affiliates shall purchase TI Products (x) only after Product
Qualification is fully implemented, (y) so long as the TI
Products satisfy the contractual requirements of TI on quality,
pricing, cycle time, etc., and (z) to the extent that Anam is
not in breach of this Agreement, an absolute minimum of forty
percent (40%) of the installed Facility capacity of Anam at full
equipment installation and Product Qualification (the
"Capacity"), at such prices and upon such terms as are set forth
in this Article 8.00 and in Annex A hereto, provided however,
that TI shall not be deemed to be in breach of this Agreement so
long as its purchases of the TI Products are not less than 40%
on a six-month average basis. Anam agrees to take all reasonable
commercial efforts to work with TI with respect to this Section
8.01.

(ii) To the extent that during start-up of Anam
operations, or at any time thereafter, the monthly output of
Products (including TI Products) is at levels below the
Capacity, the amount of TI Products which TI shall be required
to purchase shall continue to be an amount equivalent to 40% of
such total Capacity.

(b) Anam's loading commitment is for all TI Products of like or
similar technology; provided, however, to the extent that a TI
loading request would require significant capital investment by
Anam, Anam shall not be obligated to make the commitment unless
the Parties mutually agree on new loading requirements, further
provided, in the event that the Parties do not so agree, then TI
shall have the right to reduce its then current loadings of Anam
without being in breach of this Article 8.00.

(c) Throughout the Term, TI shall have an irrevocable option, at
any time, to acquire an amount of the Products up to seventy
percent (70%) of the Capacity and Anam, shall sell to TI and/or
TI's Affiliates (individually or collectively) such amount of
Products at such prices and upon such terms as are set forth in
this Article 8.00 and in Annex A hereto, provided that to the
extent that during start-up of Anam operations, or at any time
thereafter, the monthly output of Products is at levels below
Capacity, the amount of Product to which TI shall have an option
to purchase shall continue to be an amount up to 70% of such
total Capacity. Further provided, that within sixty (60) days of
the execution of this Agreement, the Parties shall establish a
procedure whereby which the Parties will implement any such
option exercise(s) (and any decrease) on a transition basis
which will not be unduly disruptive of Anam operations or
contractual commitments.

(d) For this Section 8.01.01, the general procedures for
forecasting loading of TI Products shall be as set forth in
Section V of Annex "A".

6
8.01.02 Pricing and Payment Terms.

(a) Anam shall sell TI Products to TI on a [*] basis in
accordance with the pricing formula provided in Section IV of
Annex A to this Agreement. For purposes of this Section
8.01.02(a) [*] shall be based on the following criteria: [*].

(b) All prices for TI Products shall be quoted and invoices
shall be rendered and paid in the currency of the United States
of America. Each shipment shall constitute an independent
transaction and TI shall pay for same in accordance with the
specified payment terms. Upon shipment of TI Products, Anam
shall invoice TI in accordance with said Annex A.

(c) In compliance with TI's obligations under this Agreement,
information relating to type, quantity and delivery of TI
Products shall be as set forth in the written purchase orders to
be issued by TI to Anam. Anam is obligated to and shall agree to
accept and perform according to the production schedules or as
in such TI purchase orders provided such purchase orders
otherwise conform to the terms and conditions of this Agreement.
In the event of any inconsistency between this Agreement and the
purchase order, this Agreement shall be controlling.

(d) Anam shall exert commercially reasonable efforts to achieve
linear shipments, defined as equal amounts for each work-week of
each month.

(e) Shipments shall be made F.O.B., Point of Export (the "Fob
Point"), in accordance with the "routing and ship to"
instructions in TI's purchase order. All title and risk of loss
or damage shall pass from Anam to TI upon Anam's delivery to the
Fob Point, provided that Anam has shipped the TI Products in
accordance with TI's routing and ship to instructions and any
packing and shipping instructions.

*  Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

7
(f) Within thirty [30] days of the date of the invoice, TI shall
pay Anam the Purchase Order Amount for TI Products delivered to
the Fob Point, unless the TI Products fall TI's incoming
inspection tests, in which case TI may return the TI Products to
Anam and be under no further obligation to pay Anam for said
non-conforming TI Products.

(g) To the extent Anam does not satisfy its sort/probe yield
commitments under this Agreement, then the price of TI Products
shall be adjusted as per the pricing formula set forth in Annex
A, IV.

8.01.03 Delivery.

(a) The delivery dates indicated by TI on its purchase order for
TI Products are important elements of shipment and receiving of
TI Products. Anam agrees to accept any TI purchase order,
provided that any such purchase order: (i) does not exceed
seventy (70) percent of Anam's then current capacity and (ii)
does not require delivery within a lead time which is
commercially unreasonable or inconsistent with Anam's
manufacturing cycle times. Anam agrees to take all reasonable
efforts so that the TI Products shall be delivered to TI's
designated delivery point on the dates set forth in any purchase
order(s), and in accordance with [*]. In the event that any TI
Products are not shipped in accordance with such delivery dates,
[*] Anam agrees to ship via air freight (or as directed by TI)
and to pay for all extra costs.

(b) In addition to the TI packing and shipping instructions, the
TI Products shall be packaged in accordance with applicable TI
Specifications, and Korean Laws and U.S. laws to ensure safe
arrival at TI's designated delivery point.

8.01.04 Warranties and Representations.

(a) Anam warrants and represents to TI that the TI Products will
conform to the Specifications and shall be free from any defects
in function, material, appearance and workmanship for the longer
of: (i) a period of [*] from the date of TI sale, or (ii) such
warranty periods provided by [*] (hereinafter, the "Warranty
Period").

(b) If, within the Warranty Period, the TI Products are in
breach of said warranty, TI shall notify Anam promptly in
writing of the defect, and Anam shall promptly, at TI's option,
either repair or replace any defective TI Products [*], or
credit to TI's account [*] 

*  Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

8
[*]. An RMA form previously issued by Anam must accompany any
such returned TI Products. Such return shipment shall be made by
TI, F.O.B. TI's shipping dock(s) or such other shipping location
as may be designated by TI.

(c) Anam will hold TI harmless from and indemnify it against all
claims made by third parties arising out of the operations of
Anam or the Products manufactured by Anam, including all acts or
omissions by Anam personnel (whether or not such personnel are
direct employees of Anam, provided, however, that liability for
such claims is not due to any direct act or omission of TI
(including without limitation, that of any TI employee or
agent).

(d) THE WARRANTIES IN THIS AGREEMENT ARE EXCLUSIVE AND STATED IN
LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESS, STATUTORY, OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND NEITHER
ASSUME NOR AUTHORIZE ANY OTHER PERSON TO ASSUME FOR THE PARTIES
ANY OTHER LIABILITIES IN CONNECTION WITH THE MANUFACTURE OR SALE
OF THE PRODUCTS. THE WARRANTIES SHALL NOT APPLY TO ANY OF THE
PRODUCTS WHICH HAVE BEEN REPAIRED OR ALTERED BY TI, EXCEPT AS
AUTHORIZED BY ANAM, OR WHICH SHALL BE SUBJECTED TO MISUSE,
NEGLIGENCE, ACCIDENT OR ABUSE BY TI.

(e) Only with respect to the Products, and only during the
Warranty Period, TI will hold Anam harmless from and indemnify
Anam against all claims made by third parties arising out of
defects in the Products so long as said defects are solely
attributable to the Technical Information, and not to any
manufacturing fault of Anam.

8.01.05 Return Material Authorization.

(a) Defective material shall be returned freight collect to
Anam. Replacement, ("Hot Lot") service by Anam shall be made on
an expedited, "courier", basis.

(b) Anam agrees to provide RMA as soon as reasonably possible,
but not exceeding five (5) business days after return by TI.

*  Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

9
8.06 Purchase Order Quantities. In accordance with paragraph
8.01.01(a), Anam shall ship to TI the quantity(ies) of TI Products
specified in purchase orders placed under this Agreement.

8.01.07 Packing and Shipping Instructions.

(a) Anam will properly pack and describe shipments in accordance
with TI Specifications and applicable carrier and legal
regulations. Shipments will be made at the lowest possible
freight charges. TI may assist Anam by providing freight
classifications or classifying material. Anam will insure or
declare value on shipments except on parcel post, unless TI
specifies otherwise. On shipment where value is declared, Anam
will ship prepaid insured for a minimum of the equivalent of
U.S. dollars fifty (U.S. $50.00) to facilitate tracing. If
shipping by air carrier, Anam will ship freight prepaid. Anam
shall consolidate the air and surface shipments on single bills
of lading insofar as possible so as to avoid premium freight
costs unless instructed otherwise by TI.

(b) In case any shipment does not correspond to normal practice
in the industry (e.g., require special handling shipments or air
ride suspension, or air shipment over five hundred (500) pounds,
or over one hundred twenty (120) inches long or wide or over
fifty-six (56) cubic feet, etc.), Anam agrees to notify TI's
appropriate traffic department seventy-two (72) hours prior to
shipment for special shipping instructions.

(c) Each box, crate or carton will show TI's full street address
and purchase order number regardless of how shipped. On air
carrier shipments, a packing list shall accompany each container
and shall describe the contents of such container. On all other
shipments, Anam will provide a packing list to accompany each
shipment, referencing the appropriate purchase order number. The
bill of lading also will reference the purchase order number.

(d) Anam is responsible for packing shipments correctly based on
the carrier mode utilized. Charges for packing and crating shall
be deemed part of the purchase price and no additional charges
will be made therefor unless specifically requested by TI on the
purchase order. Anam agrees to ship via the carrier specified by
TI.

10
ARTICLE 9
TRADEMARKS

9.01    NO USE OF TI TRADEMARKS. Except as provided in Section 9.02, neither 
Anam nor any of its third party customers shall, at any time, in any place or in
any manner, utilize the trademarks of TI, or its Affiliates or any name, mark,
device or logo confusingly similar thereto, in connection with Anam, the
business activities of Anam or the manufacture, use, lease, sale or other
disposition of Products in any other way.

9.02    LIMITED TRADEMARK USE. Only with respect to TI Products and, then, only
to the extent authorized in writing by TI, Anam may symbolize or otherwise mark
such TI Products with TI trademarks trade names, devices or other TI proprietary
logos. Except as authorized pursuant to this Section 9.02, the provisions of
Section 9.01 shall govern.

ARTICLE 10
DISCLAIMERS AND LIMITATIONS OF LIABILITY

10.01    PATENT INDEMNITY BY ANAM. Anam shall defend any suit or proceeding
brought against TI insofar as such suit or proceeding is based upon a claim that
Products manufactured by Anam, or any process carried out by Products or any
process used in the manufacture of Products, constitutes direct infringement of
any duly issued patent, or any maskwork right, copyright or trade secret, and
Anam shall pay all damages and costs finally awarded therein against TI,
provided however, Anam will not be obligated to indemnify and hold TI harmless
if said infringement solely resulted from Anam's implementation or utilization
of Advanced Available Technology.

10.02    PRODUCT LIABILITY. For any Products other than TI Products TI shall 
bear no responsibility or liability with respect to any claims or suits against
Anam by third parties and shall be under no obligation to indemnify or hold
harmless Anam for any liabilities, losses, expenses or damages incurred or
suffered by Anam resulting from, or caused by, the defective or allegedly
defective manufacture, storage, use, sale or transportation by Anam or others of
any Products, in which the Trade and Industrial Secrets of TI or other Technical
Information of TI has been utilized or applied.

10.03    HOLD HARMLESS. Anam will hold TI harmless from and indemnify it against
all claims made by third parties arising out of the operations of or the
Products manufactured or sold by Anam, to any third party including all acts or
omissions by Anam's personnel (whether or not such personnel are direct
employees of Anam or have been obtained from TI on a seconding or contractual
basis).

11
10.04    NOTICE OF CLAIMS. Any provision herein to the contrary notwithstanding,
both Anam and TI shall promptly advise the other whenever it shall become
apprised of any claim which is of a nature comprehended by this Article 10.00.

12

[*]

ARTICLE 11
EXPORT CONTROLS

11.01    Anam understands and acknowledges that Products and technology
(regardless of the form in which they are provided), including software,
received from TI under this Agreement may be under validated export license
control of the United States or other countries. Anam agrees to comply with
applicable export control laws, and shall be responsible for obtaining all
export, import and other licenses related to export, re-export or import of
Products, software or information by it. Anam specifically assures TI that
without prior authorization from the U.S. Department of Commerce, it shall not
knowingly export or re-export, directly or indirectly, any technology (including
software) received from TI, or any direct product or such technology or any
product of Anam, to any recipient, destination or country to which such export
or re-export is restricted or prohibited by U.S. law, including, but not limited
to the Democratic People's Republic of North Korea. The granting of all required
import and export licenses shall be a condition precedent to TI's obligations
under this Agreement. TI shall have no liability to Anam if any licenses or
approvals are denied. This Article shall survive termination or expiration of
this Agreement.

*  Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

13
11.02     Anam further agrees to obtain any necessary export license or other
documentation prior to exportation of any product or technical data, including
software, acquired from TI or any product of such technical data. Accordingly,
Anam shall not sell, export, re-export, transfer, divert or otherwise dispose of
any such product or technical data directly or indirectly to any person, firm or
entity, or country or countries, prohibited by United States or non-U.S. laws or
regulations. Further, Anam shall give notice of the need to comply with such
laws and regulations to any person, firm or entity which it has reason to
believe is obtaining any such technical data or product from Anam with the
intention of exportation. Each Party shall secure, at its sole expense, such
licenses and export and import documents as are necessary for each of them to
fulfill its obligations under the Agreement

11.03    The terms of this Article 11.00 shall survive termination or 
expiration of this Agreement.

ARTICLE 12
CONFIDENTIALITY

12.01    GENERAL OBLIGATION OF CONFIDENTIALITY AND-NONDISCLOSURE. Anam hereby
recognizes that the value of the Technical Information, Technical Data, Advanced
Available Technology and Trade and Industrial Secrets (collectively the
"Confidential Information") is attributable substantially to the fact that the
said information, know-how and technologies of TI are maintained by TI, its
Affiliates and TI Joint Ventures in the strictest confidentiality and secrecy
and generally are unavailable to others in Korea and elsewhere without the
expenditure of substantial time, effort or money. Anam therefore covenants and
agrees to keep strictly secret and confidential the Confidential Information,
whether disclosed by TI, a TI Affiliate or TI Joint Venture, in accordance with
the following provisions of this Agreement. Anam agrees that the Confidential
Information which they receive pursuant to this Agreement is received only for
use by Anam and not by any Affiliate and only in the Facility and to the extent
provided in this Agreement. Except as provided in Section 12.06 of this
Agreement, Anam agrees to keep the Confidential Information confidential until
ten (10) years after the expiration or termination of this Agreement, provided
however that Confidential Information in the form of source code for any
software or microcode will be kept confidential for an indefinite period;
further provided that all Confidential Information is and shall remain
exclusively owned by TI, and the grant in this Agreement of rights therein or
access thereto does not transfer to Anam any present or future ownership rights
in the Confidential Information.

12.02   DISCLOSURE TO THIRD PARTIES. Except and only to the limited extent
necessary to market its foundry services to third parties, Anam hereby covenants
and agrees not to disclose all or any portion of the Confidential Information to
any third Party under any circumstances whatsoever. In implementation of the
foregoing covenant, Anam shall not disclose any of the Confidential Information
to any of such third party's respective employees or other personnel except to
those limited few persons for whom such disclosure is necessary for the
effective performance of evaluation of the manufacturing capability of Anam,
and, in each case, only to the extent required for such effective performance,
and only if such third party executes a nondisclosure agreement

14
("NDA") in the form and substance approved by TI and a copy of such agreement is
provided to TI. TI shall be named as a third party beneficiary of any such NDA.
Before delivering any Confidential Information to a third party pursuant hereto,
Anam shall identify for TI the Confidential Information Anam intends to so
deliver; Anam shall not deliver to any third party any Confidential Information
the delivery to such third party of which TI objects to.

12.03    EXECUTION OF CONFIDENTIALITY AND SECRECY AGREEMENTS. Anything to the
contrary in this Article 12.00 notwithstanding, Anam shall not disclose any
Confidential Information to any of its respective employees or other personnel
unless and until such employees or other personnel have, prior to such
disclosure, executed a written NDA in form and substance satisfactory to TI,
with respect to the use, disposition and disclosure of Confidential Information
to be disclosed to each such employee or other personnel of Anam pursuant to
Section 12.03 hereof.

12.04    MARKING OF TECHNICAL DATA EMBODYING TRADE AND INDUSTRIAL SECRETS. To
implement the covenants and obligations of Anam pursuant to this Article 12.00,
Anam shall cause all Technical Information and Technical Data relating to or
containing information concerning the Trade and Industrial Secrets, including,
but not limited to sketches, drawings, reports, memoranda, blueprints,
photographs, recording media and notes, and all copies, reproductions, reprints
and translations thereof, to be plainly marked to indicate the secret and
confidential nature thereof and to prevent unauthorized access thereto and
unauthorized use or reproduction thereof.

12.05    MEASURES TO COMPEL COMPLIANCE. To further implement the covenants and
obligations of Anam pursuant to this Article 12.00, Anam shall take all
commercially reasonable efforts, including, but not limited to court proceedings
at its own expense, to compel compliance by its respective employees, other
persons and any third Party.

12.06    LIMITATION AND SURVIVAL OF OBLIGATIONS. The covenants and obligations
undertaken by Anam pursuant to this Article 12.00 shall not apply to any Trade
and Industrial Secrets which shall hereafter become published by TI or otherwise
become generally available to the public, except in consequence of a willful or
negligent act or omission by Anam, in contravention of the obligation herein
above set forth in this Article 12.00, and such obligations shall, as so
limited, survive expiration or termination of this Agreement, for a period of
ten (10) years from the date of expiration or termination of this Agreement

12.07    ANAM PROCEDURES. As soon as practicable hereafter, Anam shall
establish and implement rules and procedures with the cooperation of TI which
are not inconsistent herewith and which are sufficient to comply with Anam's
obligations set forth in this Article 12.00 as well as for the protection of
TI's intellectual property, which such procedures shall require the prior
written approval of TI, which approval shall not be unreasonably withheld by TI.

15
12.08    TI RIGHT OF INSPECTION, AUDIT AND RECOMMENDATION. TI shall have the
right, at any time, to inspect the Facility, and to review and audit the rules
and procedures established by Anam as required by Article 12.00, for the
purposes of determining the sufficiency of such rules and procedures and their
implementation, to comply with Anam's obligations set forth in Articles 12.00.
Furthermore, TI shall have the right to make recommendations, not inconsistent
with TI practices in like TI facilities to Anam for complying with Anam's
obligations set forth in this Agreement. Anam, shall implement all such
reasonable recommendations within a reasonable time after written request by TI.

12.09    TI RIGHT TO SUSPEND DELIVERY OF TECHNICAL INFORMATION OF TI. If Anam
materially breaches this Agreement or unreasonably fails to implement any
recommendations made by TI pursuant to Article 12.00, then, TI shall have the
right to suspend its obligations under this Agreement with respect to delivery
of Technical Information and Technical Data without being in breach of this
Agreement. Nothing in this Article 12.00 shall limit TI's right to pursue other
available remedies for such failure to implement TI recommendations.

ARTICLE 13
TERMINATION, CURE OF BREACH, CONCILIATION, AND REMEDIES

13.01    TERMINATION OF AGREEMENT. This Agreement may terminate upon:

(i)     EXPIRATION OF THE TERM (such termination shall occur
automatically), or

(ii)    NO NEW TECHNICAL ASSISTANCE AGREEMENT. A Party may terminate
this Agreement if the Parties fail to negotiate a new technical
assistance agreement or an amendment to this Agreement for
Future Technology Nodes pursuant to Article 17.00, or

(iii)   MUTUAL AGREEMENT OF THE PARTIES. The Parties may mutually agree
to terminate this Agreement, in which event the future
relationship of the Parties shall be determined by the Parties;
or

(iv)    AN UNCURED MATERIAL BREACH. Subject to Sections 13.03 and 13.04
of this Agreement, a Party may terminate this Agreement in the
event of a material breach(es) of the other Party For purposes
of this Agreement, "Material Breach" shall mean:

(a) An event of Material Breach by Anam shall include, but not 
be limited to, a breach of Articles 6.00, 7,00, 12.00, and 
17.00, and Sections 5.02, 5.03, 8.01.01, 8,01.02, 16.04, 16.08, 
18.05 and 18.07.

16
(b) An event of Material Breach by TI, which shall include, but
not be limited to a breach of Articles 12.00 and 17.00 and
Sections 2.01.01, 2.03, 4.01, 8.01.01, 8.01.02, 16.04, and
18.05.

(v)     NON-RECEIPT OF NECESSARY GOVERNMENT APPROVALS.

(a) As further provided in this subsection (iv), a Party may
terminate this Agreement in the event any government agency: (a)
does not grant any requisite approvals; (b) rescinds any
approvals; (c) makes a contingent approval; (d) imposes new
obligations on a Party, or (e) modifies/amends this Agreement or
any term or condition hereof.

(b) The Parties' continuing obligations under this Agreement
shall be contingent on the grant of governmental license(s) and
other approvals, including but not limited to appropriate or
requisite foreign exchange approvals and export licenses, as may
be required by United States law and Korean Laws and other
applicable laws to effectuate the transactions contemplated by
this Agreement. Any such requisite approvals shall be obtained
on or before March 31, 1997; or

(c) ADVERSE GOVERNMENT INTERVENTION. At any time during the
Term, should any government or government agency take any action
adverse to any Party or make recommendations to the Parties or
any of them requiring directly or indirectly, formally or
informally, alteration or modification of any term or condition
of this Agreement, or the transactions contemplated thereby, or
of the performance of the Parties under this Agreement,
including refusal to grant any necessary government approval, in
a manner which is material and adverse to one Party, then, if
said Party makes written request to the other Party within sixty
(60) days from said action or recommendation of the government
or government agency, the Parties hereto shall enter into good
faith negotiations with the objective of restructuring the
relationship between the Parties hereto in a manner such that
the adverse effect of said alteration or modification of this
Agreement will be minimized. If the Parties cannot reach an
acceptable modification to this Agreement within three (3)
months from the date of dispatch of said written request, or
within such longer period of time as mutually agreed upon,
either Party shall have the right to terminate this Agreement by
giving written notice to that effect to the other Party, except
as set forth in Section 16.15 of this Agreement. In the event
this Agreement is terminated pursuant to this Section
13.01(v)(3), all rights under this Agreement granted by either
Party shall cease and terminate. It is expressly understood and
agreed by the Parties hereto that in the event of such
termination, neither Party will incur any liability to the other
Party for any alleged default

17

or breach in the performance of this Agreement arising from the
exercise of the right herein provided to terminate this
Agreement as the case may be unless it can be established by a
Party that the other Party acted in conjunction with said
government body or agency to bring about the intended result.
Except as provided in the previous sentence, compliance by
either Party with this section shall not be deemed a breach
under any provision of this Agreement.

(vi) FAILURE TO SATISFY DEFINED CONDITIONS PRECEDENT OR SUBSEQUENT. If
any event described in this Section 13.01(vi) fails to occur, with the
result that the purposes of this Agreement are substantially frustrated,
the Parties shall enter into good faith negotiations with the objective
of restructuring the relationship between them such that the effects of
such nonoccurrence shall be minimized. If the Parties cannot agree on a
mutually agreeable restructuring or modification of this Agreement
within six (6) months of any Party's request for such negotiations, any
Party shall have the right to terminate this Agreement forthwith in its
entirety under this Article 13.00 (except for the obligations under
Articles 10.00, 12.00, 13.00, Section 18.04 and any NDAs which shall
survive such termination) by giving written notice to that effect to the
other Parties. The conditions covered by this Section 13.01 (v) are:

(a)     Anam shall complete construction of the Facility, and
shall be fully operational on or before September 1,
1997;

(b)     Anam does not consummate a definitive agreement(s) or
arrangement(s) providing for financing facilities
sufficient to finance the proposed Facility and
transactions contemplated by this Agreement within 180
days of the signing of this Agreement;

(c)     Anam shall implement Future Technology Nodes in
accordance with a schedule(s) to be negotiated mutually
in good faith by the Parties within the scope of any
subsequent technical assistance agreement consummated by
the Parties and applicable to such Future Technology
Nodes.

(vii) FAILURE TO PROTECT TI INTELLECTUAL PROPERTY. TI may terminate this
Agreement if, in the judgment of TI, the protection of TI's intellectual
property either is not maintained sufficiently or TI has reason to
believe that the protection of such intellectual property will not be
maintained in accordance with TI requirements;

(viii) CHANGE IN CONTROL, LIQUIDATION, BANKRUPTCY, ETC.. (a) Upon the
change in control of Anam or its parent company, including but not
limited to: (v) material change in

18
Anam management or in the management of its parent company; (w) the sale
of all, substantially all, or a material part of Anam's assets, its
shares, or voting control to any third party including but not limited
to a holding company or financial institution; (x) the merger,
acquisition, or divestiture of Anam, directly or indirectly, with or to
any third party, (y) entering into a joint venture with any third party;
or (b) upon the liquidation, bankruptcy, receivership, custodianship or
dissolution of Anam (whether voluntarily or involuntarily).

Where the foregoing grants to a Party the right to terminate this Agreement,
such Party may exercise such right by furnishing the other Party written notice
to that effect, and such termination shall take effect upon the other Party's
receipt thereof, subject to any cure period that may otherwise apply hereunder.

13.02.   RESOLUTION OF DISPUTES. It is the intent of the Parties that any breach
of this Agreement be resolved in an amicable manner, to the fullest extent
possible, and that any such resolution be reasonable in light of the rights and
obligations of the Parties. If any breach should arise which cannot be resolved
by the personnel of each Party directly involved, the following procedures of
Sections 13.03 through 13.05 inclusive shall apply in each of the circumstances
described below.

13.03.   CURE. If either Party shall at any time breach this Agreement, without
any material causative fault on the part of the other Party, by failing to
perform any material provision of this Agreement (or, cumulatively, where
non-material breaches would amount to a material breach), the non-breaching
Party may advise of its intention to terminate this Agreement by providing
written notice to the breaching Party specifying the breach. The Agreement will
not be terminated if (i) the material breach specified in the notice is remedied
within the fifty-five (55) day period following receipt of the notice by the
breaching Party or (ii) if the breach reasonably requires more than fifty-five
(55) days to correct, the breaching Party has, within thirty (30) days from
receipt of the notice of default, begun substantial corrective action to cure
the breach and submitted a written remediation plan to the non-breaching Party's
Program Coordinator providing a detailed explanation of the steps to be taken to
cure the breach as quickly as practicable, the defaulting Party diligently
pursues such corrective action, and such breach is actually cured within ninety
(90) days following receipt of the notice of default. If any default is not
cured within the time permitted, the non-defaulting Party shall have the right
to terminate this Agreement at any time thereafter by giving written notice of
termination to the other Party, and upon the giving of such notice of
termination this Agreement shall terminate immediately. The Party receiving
notice shall have the right to cure any such default up to the date of
termination. In the event of any default, the non-defaulting Party shall have
the right to suspend further implementation or effectuation of its obligations
under this Agreement, and shall not be obligated to resume such activities until
such default has been cured. This Section 13.03 shall run concurrently with the
Conciliation Process set forth in Section 13.04 below.

19
13.04    CONCILIATION PROCESS. At any time during the Term, upon the occurrence
of one or more breaches under this Agreement, the non-breaching Party shall
promptly deliver written notification to the alleged breaching Party setting out
in reasonable detail and in clear and concise language the good faith basis for
and the specifics of such breach. If the breaching Party has not cured such
breach within ten (10) business days after delivery of such written
notification, a coordinating committee consisting of the Project Coordinators
(hereinafter, the "Coordinating Committee") shall be established by the Parties
and shall convene a meeting of itself within ten (1 0) business days thereafter
for the purposes of, among other things:

-       assessing the good faith basis for the claimed breach,

-       defining, assessing and prioritizing the alternatives reasonably
available to cure such breach or to correct the circumstances or
situations that gave rise to such breach so as to make its
reoccurrence unlikely; and

-       adopting by unanimous vote, one or more curative or corrective
courses of action (the "Proposed Resolution").

Either the breaching Party or the non-breaching Party shall be entitled to (i)
make reasonable requests for information ("Information Requests") pertaining to
the breach (provided such requests are not unduly burdensome and can be
accomplished within two (2) business days) and (ii) present its views to the
Coordinating Committee with respect to the breach, through its appropriate
officer "Presentation". If within five (5) business days of its first meeting
the Coordinating Committee shall be unable to resolve the breach by unanimous
vote, then the matter shall immediately be referred to an advisory committee
consisting of the President of Anam and the TI Executive Vice President
responsible for the Semiconductor Group and two additional personnel of their
choice, one of each from TI and Anam (hereinafter the "Advisory Committee") for
further attempts at resolution. Within fourteen (14) business days of such
referral, the Advisory Committee shall convene a meeting for the purpose of
attempting to resolve the breach. The procedures described above concerning
Information Requests and Presentation shall also apply to the Advisory Committee
proceedings. If within five (5) business days of its first meeting the Advisory
Committee shall be unable to resolve the breach by unanimous vote, then the
matter shall immediately be referred to the respective Chairman of each of TI
and Anam, Group for the purpose of attempting to resolve the breach during the
period of ten (10) business days following the submission of such matter to them
for their consideration. The process described in this Section 13.04 is herein
referred to as the "Conciliation Process".

13.05    REMEDIES INJUNCTIVE AND OTHER EQUITABLE RELIEF.

13.05.01 REMEDIES. Upon the failure to cure a Material Breach by either
Party of any provision of this Agreement, the non-breaching Party shall have the
right to pursue all available remedies at law or in equity that it may elect,
including but not limited to specific performance or injunctive relief, in order
to obtain the benefits to have been provided pursuant to this Agreement, or to
obtain adequate recourse or compensation in the event the same are not so
provided.

20
13.05.02 INJUNCTIVE RELIEF FOR CONFIDENTIAL INFORMATION, TRADE
AND INDUSTRIAL SECRETS, ETC. Unauthorized use or disclosure of
Confidential Information or failure to protect TI's technologies or
intellectual property will diminish the value of Advanced Available
Technology, Technical Information, Technical Data, Trade and Industrial
Secrets, and TI intellectual property rights. Therefore, if Anam
breaches (or TI has reason to believe that Anam may be about to breach)
any of its related obligations hereunder, TI shall be entitled to
equitable relief to protect its technologies and intellectual property
rights, including but not limited to injunctive relief, as well as
monetary damages.

13.05.03 RIGHT TO USE ADVANCED AVAILABLE TECHNOLOGY.

(i) In the event of termination of this Agreement for a
reason other than an Anam Material Breach, Anam shall be
permitted to continue to use said Advanced Available Technology
in the Facility, and only in the Facility, with no right to use,
transfer assign or otherwise provide directly or indirectly any
Advanced Available Technology to any other facility, affiliate,
third party, person, etc.

(ii) In the event Section 13.05.03(i) is implemented,
Anam agrees to continue to pay to TI the ongoing technical
assistance fee set forth in Section II.B of Annex A.

(iii) Nothing in this Section 13.05.03 shall be deemed
to be a waiver or an abrogation of any other right or remedy of
any Party under Article 13.00 of this Agreement.

ARTICLE 14
FORCE MAJEURE

14.01    Should any Party be prevented from performing its contractual 
obligations under this Agreement due to the cause or causes of force majeure
such as new acts of war or aggression (declared or undeclared) by North Korea or
other third country or economy, fire, storm, flood, typhoon or other severe
weather conditions, earthquake, strike, student unrest, legal restraints,
government or like interference, judicial action, accidental damage to
equipment, as will as any other cause outside the control of that Party, that
Party shall not be liable to the other Party for any delay or failure of
performance caused by any of the above events. "Force majeure" shall include the
failure to obtain such license(s) and other approvals, including export
licenses, as are required by U.S. law or other applicable law for the equipment,
software, technology and Products to be provided pursuant to the terms of this
Agreement

14.02    The Party affected by Force Majeure shall notify the other Party of the
occurrence of any of the above events in writing by cable or telex within the
shortest possible time.

21
14.03    Should the delay caused by any of the above events continue for more
than ninety (90) days, the Parties shall settle the problem of further
performance of the Agreement through friendly negotiations as soon as possible
with the objective of restructuring the relationship among them such that the
effects of such delay are minimized. If the Parties cannot agree on a mutually
acceptable solution within six (6) months of any Party request for such
negotiations any Party (not including Anam in the event of action or
interference by the government of the U.S.) may terminate this Agreement by
prior written notice to the other Party.

ARTICLE I5
APPLICABLE LAWS

15.01    This Agreement shall be governed by, construed and enforced in 
accordance with the laws of Texas, U.S.A., as applicable to contracts made and
fully performed in Texas.

15.02    Anam shall comply with Korean Laws and all other applicable laws. Anam,
its officers, employees or agents will not participate in or provide any
information in furtherance of any boycott in violation of U.S. law or offer to
pay or receive any bribe to/from any individual or corporation. When other
individuals or organizations are required to participate in programs of Anam,
they shall be compensated fairly based on the task performed. In no
circumstances are public servants or other holders of public offices to be
offered or paid any bribe or other benefits, directly or indirectly. No
contribution in any way related to Anam will be made to candidates for public
offices or to political parties or other political organizations, regardless of
whether such contributions are permitted by local laws.

ARTICLE 16
MISCELLANEOUS

16.01    All Attachments, Annexes and Schedules to this Agreement are integral
parts thereof. Subject to Section 16.08, all amendments, supplements and
alterations to this Agreement shall be made in written form and signed by the
authorized representative of the Parties, and such shall thereafter form an
integral part of this Agreement, provided however, that TI may assign this
Agreement or any obligation hereunder to any subsidiary of TI upon written
notice to Anam. In such event, TI shall be the controlling Party of such
assignee and shall guarantee the obligations of such assignee for this Agreement

16.02    In the event the government of the Republic of Korea imposes on TI or
TI Affiliates offset requirements in other TI projects or investments in the
Republic of Korea, then Anam agrees to use its best efforts, upon TI request, to
convince the government that the transfer of Advanced Available Technology by TI
and sales of TI Products to TI hereunder should be credited for offset purposes.

22
16.03    In the event that any of the provisions of this Agreement, or portions
thereof, or documents referenced herein are held to be unenforceable or invalid
by any court of competent jurisdiction, the validity and enforceability of the
remaining provisions, or portions thereof, shall not be affected thereby. If the
purposes of this Agreement are substantially frustrated by any events
contemplated by this Section 16.03 any Party may terminate this Agreement in the
manner as if the conditions of Section 13.01 (iii) existed.

16.04.    No Party, without the prior written consent of the other, shall either
issue or cause the issuance of a press release or public announcement or
disclose to any third party, either the existence or contents of this Agreement
or the transactions contemplated thereby. Provided, however, that Anam may
disclose to its potential customers that no patent license exists between TI and
Anam. Under this requirement a Party shall be permitted to disclose, under
confidentiality and use restrictions, such terms of this Agreement as are
reasonably required to be disclosed in response to reasonable requests made by
governmental authorities or potential investors or lenders not affiliated with
any semiconductor developer or manufacturer in the ordinary course of seeking
governmental approvals or for obtaining debt or equity financing, bank credit or
the like; provided however that in such event the Party making such a request
for approval must seek the review and approval of the other Party, in which
case, the requesting Party shall use its best efforts to comply with the
recommendations of the other Party as concerns disclosure and confidentiality.

16.05    The headings of the Articles and Sections of this Agreement are for
reference purposes only and shall not be deemed to affect in way the meaning or
interpretation of the Articles to which they refer.

16.06 The failure on the part of any Party to exercise or enforce any rights
conferred on it hereunder shall not be deemed to constitute a waiver of any
rights nor operate to bar the exercise or enforcement of any rights at any time
or at times thereafter.

16.07    The Parties agree to execute and deliver to each other all additional
instruments, to provide all information, and to do or refrain from doing all
further acts and things as may be necessary or as may be reasonably requested by
any Party hereto, more fully to vest in, and to assure each Party of, all
rights, powers, privileges, and remedies herein intended to be granted to or
conferred upon such Party.

16.08    Anam shall not sell, assign, delegate, transfer, or otherwise dispose
of this Agreement or any right or duty under this Agreement or portion thereof
(including an assignment or delegation by operation of law), without the prior
written consent of TI. Any such attempted sale, assignment, transfer,
delegation, disposition, etc. shall be null and void and shall constitute a
Material Breach under Section 13.01(iv) of this Agreement.

16.09    Except as specifically set forth or referred to herein, nothing express
or implied in this Agreement is intended to or shall be construed to confer upon
or to give any person other than

23
the Parties hereto and their successors or assigns, any rights or remedies under
or by reason of this Agreement.

16.10    All notices and formal communications pursuant to this Agreement shall
be served on each Party in writing via facsimile transmission (confirmed by
registered letter), registered letter, telex or prepaid cable to the following
persons at the following addresses and fax numbers:

if to TI:
Mr. Joseph Brennan
8505 Forest Lane M/S 8641
Dallas, Texas 75243
Fax: 972/480-2088

with a copy to:

General Counsel
13510 North Central Expressway, M/S 241 
Dallas, Texas 75243
Fax: 972/995-3511

if to Anam:
Mr. K.O. Park
3d Floor Taeyang Building
59, Nae-Dong, Ojung-ku, Buchon
Kyunggi-do, Korea 421-160
Fax: 032-683-8104

Either Party may change the above addresses by furnishing notice to that effect
in the manner provided above.

16.11    All correspondence of which TI is a recipient or sender shall be in
English. All documents which are issued in Korea pursuant to the Agreement shall
be provided to TI in English translation.

16.12    This Agreement may be executed in one or more counterparts, in English,
each of which shall be enforceable by or against the Parties executing such
counterparts, and all of which together shall constitute one instrument.

16.13    Anam shall obtain and maintain throughout the Term such kinds and 
amounts of insurance as are reasonable and customary in the trade, including but
not limited to insurance covering product liability, theft, fire, worker's
compensation, etc.

24
16.14    During the Term, neither Party nor an Affiliate shall solicit whether
directly or indirectly for employment; or hire, employ or other wise retain any
employee of the other Party with whom they have come into direct contact in
connection with the transactions contemplated by this Agreement without the
prior written consent of the other Party.

16.15    Articles, 9.00, 10.0, 11.00, 12.00, 15.00, and Sections 2.09, 8.01.04,
and 13.05.03 shall survive the cancellation termination or expiration, of this
Agreement.

16.16    This Agreement contains the entire understanding and agreement among
the Parties with respect to the subject matter hereof and supersedes all prior
oral and written understandings and agreements relating thereto, and may not be
modified, discharged or terminated except by the written consent of the Parties.

ARTICLE 17
TERM

17.01    Initial Term. The Term shall commence on the Effective Date and shall
continue through July 15, 2006, unless (i) terminated under Article 13.00 of
this Agreement, or (ii) the Parties fail to negotiate in good faith either a new
technical assistance agreement or an amendment to this Agreement for Future
Technology Nodes on or before December 31, 1998.

17.02    In the event the Parties are unable successfully to negotiate such new
technical assistance agreement, or an amendment to this Agreement, then either
Party may give the other Party a two-year notice of termination, whereupon the
Parties shall agree on a transition schedule; provided, however, to the extent
that the Parties cannot agree on a reasonable transition schedule, TI's minimum
loading commitment during said remainder two-year period shall be lowered to
twenty percent (20%).

ARTICLE 18
ADDITIONAL REPRESENTATIONS, WARRANTIES, AND COVENANTS

Anam additionally represents and warrants to TI as follows:

18.01    ENFORCEABLE OBLIGATIONS. Anam will be at the time of execution a
corporate citizen of the Republic of Korea in good standing and not subject to
any criminal penalty, criminal charges, disciplinary proceedings or criminal
proceedings under the Korean Laws or any other country. With respect to this
Agreement Anam will have the authority and legal right to execute and deliver
such Agreements and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. This Agreement will
constitute, when executed and delivered, the valid, legal and binding
obligations of Anam, enforceable against Anam, in accordance with their
respective terms, except (a) as such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or thereafter
in

25
effect relating to creditors' rights, and (b) as the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.

18.02    VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution, delivery and
performance of this Agreement by Anam does not and will not (i) violate,
conflict with or result in the breach (collectively, "Breach") of any term,
condition or provision of, or result in the creation of any encumbrance under,
(a) any existing law, ordinance, or governmental rule or regulation to which
Anam is subject, (b) any judgment, order, writ, injunction, decree or award of
any governmental entity which is applicable to Anam, (c) the charter documents
of companies affiliated with Anam in carrying out this Agreement or any
securities issued by such companies, or (d) any mortgage, indenture, agreement,
contract, commitment, lease, plan, authorization, or other instrument, document
or understanding, oral or written, to which Anam is a party or by which Anam may
have rights, except, as to such performance, such Breaches and encumbrances as
would, if occurred or created, not have a material adverse effect on the
ability of Anam to perform his obligations hereunder and thereunder, or (ii)
give any party with rights thereunder the right to terminate, modify, accelerate
or otherwise change the existing rights or obligations of Anam.

18.03    RESTRICTIONS. Anam neither is nor will be a party to any indenture,
agreement, contract, commitment, lease, license, permit, authorization or other
instrument, document or understanding, oral or written, nor subject to any
restriction in any charter document or other corporate restriction or any
judgment, order, writ, injunction, decree or award which materially adversely
affects or materially restricts or, to the knowledge of Anam, may in the future
materially adversely affect or materially restrict, the business of Anam after
consummation of the transactions contemplated hereby.

18.04    CONSENT. No consent or approval by, or notification of, or filing with,
any person is required which has not been obtained in connection with the
execution, delivery and performance by Anam of this Agreement, or the
consummation of the transactions contemplated hereby, other than such consents
or approvals as would, if not obtained, not have a material adverse effect on
the ability of Anam to perform its obligations hereunder.

18.05    FUTURE TECHNOLOGY NODES. 

***

[PURSUANT TO SECTION 16.04 HEREOF THE PARTIES TO THIS AGREEMENT HAVE NOT
CONSENTED TO DISCLOSURE OF THE OMITTED MATERIAL.]

***

18.06    ARM'S LENGTH PRICING. In all transactions with Affiliates concerning
assembly and test services for third party customers, Anam shall maintain
separate, independent and arm's length

26
pricing structures so that the "back log" wafer price is separate and
distinguishable from any assembly and test or "turnkey" price to third parties.

18.07    FACILITY EXPANSION.

18.07.01 Anam agrees that it will not expand the Facility or the
Capacity without advanced, prior written notification to TI, which
notification shall provide in detail plans for any such expansion,
including anticipated additional Capacity.

18.07.02 Anam shall provide TI with the right of first refusal
to any such additional Capacity in accordance with TI's loading rights
pursuant to Article 8.00 of this Agreement, provided however, TI shall
have the right not to load such additional Capacity, in part or in
whole, in accordance with Section 8.01.01, in which such case, Anam
shall be responsible solely for filling any such additional Capacity;
and further provided, all other terms and conditions of this Agreement
shall apply to such additional Capacity.

27
IN WITNESS WHEREOF, and intending to be legally bound hereby, TI and Anam have
caused their duly authorized representatives to execute this Agreement.

ANAM INDUSTRIAL CO., LTD.         TEXAS INSTRUMENTS INCORPORATED

By:___________________________    By:___________________________
Name:_________________________    Name:_________________________

Title:________________________    Title:________________________

Date:_________________________    Date:__________________________

28
ANNEX A

I.   PRODUCTS: The Products shall be as defined in Section 1.06 of this
Agreement.

II.  TECHNICAL ASSISTANCE FEE:

[*]

*  Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

29
[*]

III. PRICING FORMULA. The Pricing Formula shall be established on the following
model: (All monetary numbers are in U.S. dollars).

[*]

*  Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

30
IV.        TI PRODUCT FORECAST

A. Annual Quantity Projections.

(i) Beginning 30 days after the Effective Date of this Agreement
and in [*] of each year thereafter, TI shall provide to Anam the annual
quantities of Products (wafers) estimated to be purchased from Anam by
TI for the upcoming [*] year time period (the "Annual Quantity
Projections").

(ii) The Annual Quantity Projections shall be communicated by TI
technology. Anam shall acknowledge, in writing to TI, Annual Quantity
Projections within one (1) month of receipt thereof. Such Annual
Quantity Projections shall not constitute a binding purchase obligation
for TI and shall be the responsibility of the Program Coordinator.

B Rolling Quarterly Forecasts

(i) Beginning 30 days after the Effective Date of this Agreement
and each quarter thereafter, TI shall provide to Anam the quantity of
Products estimated to be purchased by TI from Anam for the upcoming [*]
(the "Rolling Quarterly Forecasts"). Each such forecast shall indicate
TI's estimated purchases of Products on a monthly basis for the next
succeeding quarter.

(ii) The Rolling Quarterly Forecasts shall be made available to
Anam within 10 days after the end of the preceding quarter. The Rolling
Quarterly Forecast shall not constitute a binding purchase obligation
for TI and shall be the responsibility of the Program Coordinator.

(iii) The Program Coordinators will work in good faith to
finalize loadings forecasts to meet the requirements of both TI and
Anam. However, if TI requests the TI loadings to go from the minimum 40%
of Capacity to the maximum of 70% of capacity, Anam shall have a [*] to
meet the 70% request. The Program Coordinators shall work the interim
loading plan.

*  Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

31
C       Purchase Order Process.

(i) Purchase Orders. Simultaneously with delivery of the Rolling
Quarterly Forecasts, TI shall supply to Anam a written purchase order
hereto for the first month of the upcoming quarter. The types of TI
Product, quantities, and delivery dates and locations indicated on such
purchase order shall be consistent with the first month of the
corresponding Rolling Quarterly Forecast and shall be agreed to and
approved by the Program Coordinators.

(ii) Purchase Order Acknowledgment. Anam shall acknowledge, in
writing to TI, each purchase order which has been provided by TI and
approved by the Program Coordinators within five (5) business days of
receipt thereof. Such acknowledgment shall be made by product and
specification.

(iii) Modifications/Additions. TI reserves the right to modify
or add purchase orders, subject to the acceptance thereof by Anam. Such
changes shall be communicated in writing to the Anam Program
Coordinator. Anam agrees to exercise reasonable efforts to accept any
such TI modified or additional purchase order, provided that any such
purchase order reasonably reflects TI's most recent Rolling Quarterly
Forecast, and does not require delivery with a lead time which is
commercially unreasonable.

D       Unnecessary Variations. TI and Anam shall each use commercially
reasonable efforts to minimize unnecessary variations in order to achieve as
nearly as possible linear weekly shipments.

E       Time Period Revisions. ANNEX A, Section V is intended to permit TI
wafer fabs to follow procedures substantially similar to those then currently
existing in Anam to facilitate the transition to Anam operation. The Parties may
agree in writing to revise the periods covered by the rolling forecasts or the
forecasting and ordering process from time-to-time.

32
SCHEDULE 1

TECHNOLOGY TO BE TRANSFERRED

***

PURSUANT TO SECTION 16.04 HEREOF, THE PARTIES TO THIS AGREEMENT HAVE NOT
CONSENTED TO DISCLOSURE OF THE OMITTED MATERIAL.
***

33
SCHEDULE 2

***

PURSUANT TO SECTION 16.04 HEREOF, THE PARTIES TO THIS AGREEMENT HAVE NOT
CONSENTED TO DISCLOSURE OF THE OMITTED MATERIAL.

***

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
Amendment No. 2 to the Registration Statement (no. 333-37235) on Form S-1.

ARTHUR ANDERSEN LLP

Philadelphia, Pa.
December 29, 1997

<ARTICLE> 5
<MULTIPLIER> 1,000

<PERIOD-TYPE>                   YEAR                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1996             DEC-31-1997
<PERIOD-START>                             JAN-01-1996             JAN-01-1997
<PERIOD-END>                               DEC-31-1996             SEP-30-1997
<CASH>                                          49,664                  80,760
<SECURITIES>                                       881                   2,978
<RECEIVABLES>                                  172,071                 122,557
<ALLOWANCES>                                     1,179                   2,489
<INVENTORY>                                    101,920                 111,942
<CURRENT-ASSETS>                               365,287                 373,488
<PP                                         451,360                 628,104
<DEPRECIATION>                                 126,465                 210,881
<TOTAL-ASSETS>                                 797,613                 882,867
<CURRENT-LIABILITIES>                          328,502                 549,000
<BONDS>                                              0                       0
<PREFERRED-MANDATORY>                                0                       0
<PREFERRED>                                          0                       0
<COMMON>                                            46                      46
<OTHER-SE>                                      38,514                  78,674
<TOTAL-LIABILITY-AND-EQUITY>                   797,613                 882,867
<SALES>                                      1,171,001               1,043,620
<TOTAL-REVENUES>                             1,171,001               1,043,620
<CGS>                                        1,022,078                 900,788
<TOTAL-COSTS>                                1,099,633                 980,633
<OTHER-EXPENSES>                                28,356                  28,984
<LOSS-PROVISION>                                     0                       0
<INTEREST-EXPENSE>                              22,245                  27,400
<INCOME-PRETAX>                                 43,012                  34,003
<INCOME-TAX>                                     7,876                   3,531
<INCOME-CONTINUING>                             34,188                  22,903
<DISCONTINUED>                                       0                       0
<EXTRAORDINARY>                                      0                       0
<CHANGES>                                            0                       0
<NET-INCOME>                                    34,188                  22,903
<EPS-PRIMARY>                                     0.38                     .23
<EPS-DILUTED>                                     0.38                     .23