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Company Profile of Amkor Technology
Company Profile of Amkor Technology - April 30th, 2011
Amkor Technology, Inc. (NASDAQ: AMKR) is a high-tech semiconductor product manufacturer that includes Intel and IBM among its primary customers. Previously headquartered in West Chester, Pennsylvania, United States, Amkor announced on June 3, 2005, that it had moved to Chandler, Arizona. The company has 20,033 employees worldwide and had $1.9 billion in sales in 2004.
With the majority of its factories in China, Japan, Korea, Philippines, Singapore, Taiwan, and the United States, Amkor is a leading player in the semiconductor industry. It packages and tests integrated circuits (ICs) for chip manufacturers. One of Amkor's product developments is its MicroLeadFrame chip carrier (IC package) technology.
Amkor Technology, Inc. (Amkor) is subcontractor of semiconductor packaging and test services. The Company has designed and developed a number of package formats and technologies, including its Package-on-Package with Through Mold Via (TMV), FusionQuad, fcBGA (Flip Chip Ball Grid Array), conformal shielding and copper pillar bumping and packaging technologies. It is also engaged in developing integrated circuit packaging, which involves the elimination of lead and certain other materials. Amkor provides a range of test engineering services for radio frequency mixed signal, logic and memory devices, test program development, product characterization. Amkor is a provider of radio frequency test services and strip test, a test solution. The Company’s packages are designed for application specific body size and electrical connection requirements. October 30, 2009, Amkor acquired a 30% interest in an assembly and test services business in Japan, J-Devices Corporation.
The Company’s package services are divided into families, including chip scale package, ball grid array, leadframe and other packaging services. Amkor has designed a number of chip scale packages, including ChipArray, wafer level chip scale package and flip chip scale package. Some of its three dimensional (3D) packages include Stacked chip scale package (SCSP), which contains two or more chips placed on top of each other and package-on-package, which is a thin chip scale package that can be stacked on top of each other, enabling the integration of logic and memory in a single footprint, supporting smart phones, digital camera or other handheld applications. Its chip scale package family also includes system-in-package modules. System-in-package modules integrate various system elements into a single-function block. The Company’s system-in-package technology is used in a number of devices including, power amplifiers for mobile phones and other portable communication devices; wireless local area network modules for networking applications, and sensors, such as fingerprint recognition devices and micro-electromechanical system based microphones.
The Company’s Flip chip BGA (fcBGA) incorporates a face down chip onto a substrate using a ball grid array format and is used in silicon nodes. The fcBGA package is used for networking and storage, gaming and computer applications and Plastic ball grid array (PBGA) packages use wire bond technology in applications requiring higher electrical interconnect counts or higher thermal performance. The Company’s leadframe package offering includes the MicroLeadFrame family of QFN, or quad flat no lead packages. This package family is for radio frequency and wireless applications. FusionQuad integrates both bottom leads and peripheral leads. The package targets applications for mobile hard disk drives, notebook computers and consumer electronics, such as digital televisions and set top boxes. Its other category of packaging services includes wafer bumping services that support chip scale packaging and ball grid range of product offerings.
The Company is a subcontract provider of a range of semiconductor integrated circuit test services, including wafer probe, final test, strip test, system level test and other test-related services. Its test development centers provide test engineering services from test program development to product functionality. The Company has test facilities in China, Japan, Korea, the Philippines, Singapore, Taiwan and the United States. Its wafer probe testing services provide for the visual inspection and electrical testing of the wafer for defects prior to packaging. It offers thermal-controlled probe, bumped wafer probe, single and double pass probe and multi-site probe among others. Amkor assists its customers with the development of required testing for their products. Its engineering services include software and hardware conversion of single-site (one device at a time) to multi-site (multiple devices in parallel), test program development, test hardware development and test program conversion. It has test development centers in Korea, the Philippines and the United States. The Company offers test services for devices, including simple digital logic, complex application specific integrated circuits, high speed digital, memory, mixed signal and radio frequency and wireless devices.
The Company competes with Advanced Semiconductor Engineering, Inc., Siliconware Precision Industries Co., Ltd. and STATS ChipPAC Ltd.
In September 1997 Kim formed a holding company, Amkor Technology, Inc., incorporated in Delaware, then filed for an initial public offering (IPO) of stock to be conducted in November 1997. After a delay of several months, the IPO was back on track, and in preparation the various Amkor companies were merged with the new Amkor Technology entity. Then, in May 1998, the IPO was conducted, with Salomon Smith Barney acting as lead manager. Amkor netted about $300 million from the sale of stock and also raised another $180 million in convertible subordinated notes. The company earmarked $313 million to pay down debt, with the balance providing working capital. Later in 1998 bankrupt Anam underwent a restructuring of its debt with Korean financial institutions.
As part of the plan to rescue Anam, Amkor arranged to buy the largest and newest Anam manufacturing plant, located in Kwangju, Korea, for $600 million and the assumption of another $7 million in debt. Amkor also purchased Anam's interest in a Philippine facility, and two months after its IPO Amkor paid $9.5 million to acquire Anam affiliate Anam/Amkor Precision Machine Company Inc. In the second quarter of 1999 Amkor agreed to purchase a stake in Anam worth $150 million. Amkor acquired more Anam assets in early 2000, paying $1.4 billion to add Anam's three remaining packaging and test factories. Thus the once dominant partner in the Anam-Amkor relationship was now just a foundry services provider for Amkor, manufacturing 17,000 silicon wafers each month contracted to Texas Instruments Inc. Some of the money that Amkor poured into Anam, however, was intended to increase the foundry's production capacity to around 30,000 wafers each month, hopefully to allow the former giant to make inroads in the foundry business.
While Anam was fortunate to be saved, Amkor emerged as the leading semiconductor packaging-and-test services provider in the world. Revenues topped $1.5 billion in 1998, reached $1.9 billion in 1999, and approached $2.4 billion in 2000. Net income during this period grew from $75.6 million in 1998 to $154.2 million in 2000. Amkor took steps in 2000 to increase production capacity of its plants in Korea and the Philippines by more than 800,000 square feet. In 2001 the company also began to grow externally through acquisitions in an effort to expand its geographic presence to better serve its customers as well as to capitalize on the opportunities in new markets. In January 2001 an Amkor subsidiary launched operations in Japan after acquiring a Toshiba Corporation packaging and test facility as part of a joint venture with Toshiba formed in December 2000. Later in 2001 Amkor established a manufacturing presence in Taiwan through a pair of acquisitions at a total cost of $145 million in stock. It acquired a 69 percent interest in Taiwan Semiconductor Technology Corporation and a 98 percent stake in Sampo Semiconductor Corporation. Entering the Taiwan semiconductor market was important because it was home to the largest silicon foundries in the world, and it also allowed Amkor to serve the major chip manufacturers located there as well. Amkor further bolstered its Asian
But even as Amkor was expanding its production capacity, it had to contend with another rough patch in the volatile semiconductor industry, which had suffered down cycles in 1975, 1985, 1996, and 1998. Late in 2000 demand began to soften and the situation grew worse in 2001, as the industry lost about one-third of its worldwide market. To compensate for falling sales, Amkor cut its payroll by 10 percent. As a result of the recession, revenues dropped to $1.3 billion and the company took a net loss of more than $450 million in 2001. The following year brought only a slight improvement, with sales reaching $1.4 billion. Amkor completed a pair of acquisitions in 2002, part of a trend in which integrated device manufacturers outsourced their packaging and test operations to outside providers. Amkor added Agilent Technologies' assembly business for semiconductor packages used in printers, and also acquired the Japanese semiconductor packaging business of Citizen Watch Co., Ltd. A deal to add the Fujitsu Ltd. operations in Japan fell through, however.
In 2003 Amkor sold back the wafer fabrication services business to Anam for $62 million and obtained a release from Texas Instruments on the foundry's contractual obligations. The money helped to shore up Amkor's finances, as did the sale of a 21 percent stake in Anam to Korea's Dongbu Group for $93 million in cash and notes. Amkor still owned 21 percent of Anam, but Amkor was expected to eventually divest itself of that interest as well. The sale of the wafer foundry also marked the end of the idea that Amkor could grow into a full fabrication and packaging services provider. The company was too much in debt, and demand for semiconductors was too soft to support that concept. Moreover, no synergy had ever been created between chip fabrication and the assembly and testing sides of the business.
Sales showed some improvement in 2003, increasing by 14.1 percent, or $197.6 million, to $1.6 billion. Business continued to rebound in 2004, and the company's long-term prospects were buoyed by an agreement Amkor signed to acquire an IBM assembly plant in Shanghai and a testing facility in Singapore; in return IBM contracted for about $1.5 billion in assembly and testing revenues over the next several years. After a difficult period, Amkor appeared to be ready to resume its extended trend of growth.
Principal Subsidiaries: Amkor Technology Hong Kong, Ltd.; Amkor Technology Singapore Pte. Ltd.; Amkor Technology Japan, KK; Amkor Technology Philippines (60%); Amkor Technology Taiwan Ltd. (84%); Amkor Technology Greater China, Ltd.
Principal Competitors: ASE Test Limited; Siliconware Precision Industries Co. Ltd.; STATS ChipPAC Ltd.
Market Cap (Mil.): $1,326.23
Shares Outstanding (Mil.): 197.94
Annual Dividend: --
Yield (%): --
AMKR.O Industry Sector
P/E (TTM): 7.99 9.68 19.24
EPS (TTM): 2.28 -- --
ROI: 11.20 5.66 16.13
ROE: 35.82 5.98 17.78
1968: James Kim serves as marketing agent for Anam Industrial Co.
1970: Kim founds Amkor Electronics Inc.
1991: A semiconductor assembly plant is acquired.
1997: Amkor Technology, Inc. is formed as a holding company.
1998: Amkor is taken public.
2000: Amkor acquires most of Anam's assets.
Sales: $1.6 billion (2003)
Stock Exchanges: NASDAQ
NAIC: 334413 Semiconductor and Related Devices
Name Age Since Current Position
Kim, James 75 2009 Executive Chairman of the Board
Joyce, Kenneth 63 2009 President, Chief Executive Officer, Director
Solomon, Joanne 45 2009 Chief Financial Officer, Executive Vice President
Tily, Gil 57 2008 Executive Vice President, Chief Administrative Officer, General Counsel, Corporate Secretary
Lamble, Michael 55 2009 Executive Vice President, Worldwide Sales
Kim, JooHo 58 2009 President of Amkor Technology, Korea Inc., and EVP, Worldwide Manufacturing Operations
Fusaro, James 48 2009 Executive Vice President - Assembly and Test Product Management
Kim, John 41 2005 Director
Churchill, Winston 70 1998 Independent Director
Zug, James 70 2003 Independent Director
Carolin, Roger 55 2006 Independent Director
Osborne, John 66 2007 Independent Director
Newberry, Stephen 56 2009 Independent Director
1345 Enterprise Drive
West Chester, Pennsylvania 19380
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