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<DESCRIPTION>FORM 10-K FOR AMKOR TECHNOLOGY, INC.
<TEXT>
<PAGE>

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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------
                                   FORM 10-K
                             ---------------------

<Table>
<C>          <S>
    [X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934
</Table>

                  For the Fiscal Year Ended December 31, 2002

                        Commission File Number 000-29472
                             ---------------------
                             AMKOR TECHNOLOGY, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                   DELAWARE                                      23-1722724
           (State of incorporation)               (I.R.S. Employer Identification Number)
</Table>

                             1345 ENTERPRISE DRIVE
                             WEST CHESTER, PA 19380
                                 (610) 431-9600
             (Address of principal executive offices and zip code)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                         COMMON STOCK, $0.001 PAR VALUE
                 5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2006
                   5% CONVERTIBLE SUBORDINATED NOTES DUE 2007

     Indicate  by check  mark whether the  registrant (1) has  filed all reports
required to be filed by  Section 13 or 15(d) of  the Securities Exchange Act  of
1934  during  the preceding  12  months (or  for  such shorter  period  that the
registrant was required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.  Yes [X]     No [ ]

     Indicate  by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K  (sec. 229.405 of this  chapter) is not contained  herein,
and  will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements  incorporated by reference in  Part III of  this
Form 10-K or any amendment to this Form 10-K.  [X]

     Indicate  by check mark whether the  registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).  Yes [X]     No [ ]

     The aggregate market value of the voting and non-voting common equity  held
by  non-affiliates computed by reference to the price at which the common equity
was last sold  as of the  last business  day of the  registrant's most  recently
completed second fiscal quarter, June 30, 2002, was approximately $567,696,638.

     The  number of shares outstanding of each of the issuer's classes of common
equity, as of February  28, 2003, was as  follows: 165,155,936 shares of  Common
Stock, $0.001 par value.

     Documents Incorporated by Reference: None.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                              PAGE
                                                                              ----
<S>             <C>                                                           <C>
PART I......................................................................    3
     Item 1.    Business....................................................    3
     Item 2.    Properties..................................................   14
     Item 3.    Legal Proceedings...........................................   15
     Item 4.    Submission of Matters to a Vote of Security Holders.........   17
PART II.....................................................................   17
     Item 5.    Market for Registrant's Common Equity and Related
                Stockholder Matters.........................................   17
     Item 6.    Selected Financial Data.....................................   19
     Item 7.    Management's Discussion and Analysis of Financial Condition
                and Results of Operations...................................   21
     Item 7A.   Quantitative and Qualitative Disclosures About Market
                Risk........................................................   47
     Item 8.    Financial Statements and Supplementary Data.................   48
     Item 9.    Changes in and Disagreements with Accountants on Accounting
                and Financial Disclosure....................................   87
PART III....................................................................   87
     Item 10.   Directors, Executive Officers and Control Persons;
                Compliance with Section 16(a) of the Exchange Act...........   87
     Item 11.   Executive Compensation......................................   91
     Item 12.   Security Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters..................   95
     Item 13.   Certain Relationships and Related Transactions..............   97
PART IV.....................................................................   99
     Item 14.   Controls and Procedures.....................................   99
     Item 15.   Exhibits, Financial Statement Schedules and Reports on Form
                8-K.........................................................   99
</Table>

     All  references in this annual report to  "Amkor," "we," "us," "our" or the
"company" are to Amkor  Technology, Inc. and its  subsidiaries. We refer to  the
Republic  of Korea, which is also commonly known as South Korea, as "Korea." All
references in this annual  report to "ASI" are  to Anam Semiconductor, Inc.  and
its  subsidiaries, an  equity investment  of ours. As  of December  31, 2002, we
owned 21%  of  ASI's outstanding  voting  stock. PowerQuad,  SuperBGA,  FlexBGA,
ChipArray,   PowerSOP,  MicroLeadFrame,  Amkor   Technology  are  trademarks  or
registered trademarks of Amkor Technology,  Inc. Also, microBGA is a  registered
trademark  of Tessera,  Inc. All other  trademarks appearing herein  are held by
their respective owners.

                                        2
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

                DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

     This business section contains  forward-looking statements. In some  cases,
you  can  identify  forward-looking  statements by  terminology  such  as "may,"
"will," "should,"  "expects," "plans,"  "anticipates," "believes,"  "estimates,"
"predicts,"  "potential," "continue"  or the  negative of  these terms  or other
comparable terminology. These statements are only predictions. Actual events  or
results  may  differ  materially.  In evaluating  these  statements,  you should
specifically consider  various  factors,  including  the  risks  outlined  under
"Management's  Discussion  and Analysis  of Financial  Condition and  Results of
Operations -- Risk Factors that May Affect Future Operating Performance" in Item
7 of this annual report.  These factors may cause  our actual results to  differ
materially from any forward-looking statement.

OVERVIEW

     Amkor  is the world's largest  subcontractor of semiconductor packaging and
test services. Amkor was incorporated in Delaware in 1997. The company has built
a leading position by:

     - Providing a  broad  portfolio  of packaging  and  test  technologies  and
       services;

     - Maintaining  a leading role in the  design and development of new package
       and test technologies;

     - Cultivating long-standing relationships with customers, including many of
       the world's leading semiconductor companies;

     - Developing expertise in high-volume manufacturing; and

     - Diversifying   our   operational   scope   by   establishing   production
       capabilities  in China,  Japan and  Taiwan, in  addition to long-standing
       capabilities in Korea and the Philippines.

     The semiconductors that we  package and test  for our customers  ultimately
become  components  in  electric  systems  used  in  communications,  computing,
consumer,  industrial,  automotive  and  military  applications.  Our  customers
include,   among   others,  Agilent   Technologies,  Atmel   Corporation,  Intel
Corporation, LSI  Logic Corporation,  Mediatek Inc.,  Philips Electronics  N.V.,
R.F.  Microdevices, ST Microelectronics PTE,  Sony Semiconductor Corporation and
Toshiba Corporation. The outsourced semiconductor  packaging and test market  is
very  competitive. We also compete with the internal semiconductor packaging and
test capabilities of many of our customers.

     Packaging and test are an integral part of the semiconductor  manufacturing
process. Semiconductor manufacturing begins with silicon wafers and involves the
fabrication  of  electronic  circuitry  into  complex  patterns,  thus  creating
individual chips  on the  wafers. The  packaging process  creates an  electrical
interconnect  between the semiconductor chip and the system board. In packaging,
the fabricated semiconductor wafers are cut into individual chips which are then
attached to a substrate and encased in a protective material to provide  optimal
electrical  and thermal performance. Increasingly,  packages are custom designed
for specific chips and specific end-market applications. The packaged chips  are
then  tested using  sophisticated equipment  to ensure  that each  packaged chip
meets its design specifications.

     We historically  marketed the  output  of fabricated  semiconductor  wafers
provided   by  a   wafer  fabrication  foundry   owned  and   operated  by  Anam
Semiconductor, Inc. (ASI). On February 28,  2003, we sold our wafer  fabrication
services  business to  ASI. Beginning  with the first  quarter of  2003, we will
reflect our wafer fabrication services  segment as a discontinued operation  and
restate our historical results.

     A  web site featuring current  information regarding Amkor Technology, Inc.
can be found on the internet at www.amkor.com.

                                        3
<PAGE>

INDUSTRY BACKGROUND

     Semiconductor devices  are  the  essential building  blocks  used  in  most
electronic  products.  As semiconductor  devices have  evolved, there  have been
three important  consequences:  (1) an  increase  in demand  for  computers  and
consumer  electronics fostered  by declining prices  for such  products; (2) the
proliferation of  semiconductor  devices  into  diverse  end  products  such  as
consumer  electronics, communications equipment and  automotive systems; and (3)
an increase in the semiconductor content in electronic products.

TRENDS TOWARD OUTSOURCING

     Historically, semiconductor companies packaged semiconductors primarily  in
their  own  factories and  relied on  subcontract  providers to  handle overflow
volume. In recent  years, semiconductor companies  have increasingly  outsourced
their packaging and testing to subcontract providers for the following reasons:

  SUBCONTRACT PROVIDERS HAVE DEVELOPED EXPERTISE IN ADVANCED PACKAGING
  TECHNOLOGIES.

     Semiconductor    companies   are   facing   ever-increasing   demands   for
miniaturization,  higher  lead  counts  and  improved  thermal  and   electrical
performance  in  semiconductor  devices.  This  trend,  coupled  with increasing
complexity in the  design of  semiconductor devices has  led many  semiconductor
companies  to view packaging  as an enabling  technology requiring sophisticated
expertise and technological  innovation. Many semiconductor  companies have  had
difficulty  developing  the adequate  internal capabilities  and are  relying on
subcontract providers of  packaging and  test services as  a key  source of  new
package designs.

  SUBCONTRACT PROVIDERS CAN OFFER SHORTER TIME TO MARKET FOR NEW PRODUCTS
  BECAUSE THEIR RESOURCES ARE DEDICATED TO PACKAGING AND TEST SOLUTIONS.

     We  believe that semiconductor companies are seeking to shorten the time to
market for their new  products, and that having  the right packaging  technology
and  capacity  in  place is  a  critical  factor in  reducing  delays  for these
companies.

     Semiconductor companies frequently do not  have sufficient time to  develop
their  packaging  and  test  capabilities  or  the  equipment  and  expertise to
implement new packaging  technology in  volume. For  this reason,  semiconductor
companies are leveraging the resources and capabilities of subcontract packaging
and test companies to deliver their new products to market more quickly.

  MANY SEMICONDUCTOR MANUFACTURERS DO NOT HAVE THE ECONOMIES OF SCALE TO OFFSET
  THE SIGNIFICANT COSTS OF BUILDING PACKAGING AND TEST FACTORIES.

     Semiconductor   packaging  is  a   complex  process  requiring  substantial
investment in specialized  equipment and  factories. As  a result  of the  large
capital investment required, this manufacturing equipment must operate at a high
capacity  level for  an extended  period of time  to be  cost effective. Shorter
product life cycles, faster introductions of new products and the need to update
or replace packaging  equipment to accommodate  new products have  made it  more
difficult  for semiconductor companies to  maintain cost effective manufacturing
and capacity utilization. Subcontract providers of packaging and test  services,
on  the  other  hand,  can use  their  equipment  to support  a  broad  range of
customers, potentially generating greater manufacturing economies of scale.

  THE AVAILABILITY OF HIGH QUALITY PACKAGING AND TESTING FROM SUBCONTRACTORS
  ALLOWS SEMICONDUCTOR MANUFACTURERS TO FOCUS THEIR RESOURCES ON SEMICONDUCTOR
  DESIGN AND WAFER FABRICATION.

     With semiconductor  process technology  migrating to  larger  semiconductor
wafers   with  more  and  smaller  semiconductor  dies,  new  wafer  fabrication
facilities are requiring investments of $2 billion or more. Subcontractors  have
demonstrated their ability to deliver advanced packaging and test solutions at a
competitive  price. Accordingly,  semiconductor companies are  choosing to focus
their capital resources on core wafer fabrication activities rather than  invest
in advanced packaging and test technology.

                                        4
<PAGE>

  THERE ARE A GROWING NUMBER OF SEMICONDUCTOR COMPANIES WITHOUT FACTORIES, KNOWN
  AS "FABLESS" COMPANIES, THAT OUTSOURCE ALL OF THE MANUFACTURING OF THEIR
  SEMICONDUCTOR DESIGNS.

     Fabless  semiconductor  companies  focus exclusively  on  the semiconductor
design  process  and   outsource  virtually  every   significant  step  of   the
semiconductor  manufacturing  process.  We  believe  that  fabless semiconductor
companies will continue to be a significant driver of growth in the  subcontract
packaging and test industry.

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

COMPETITIVE STRENGTHS

     We believe our competitive strengths include the following:

  BROAD OFFERING OF PACKAGE DESIGN, PACKAGING AND TEST SERVICES

     Integrating  advanced semiconductor technology into electronic end products
often poses unique thermal and electrical challenges, and Amkor employs a  large
number   of  design  engineers  to  create  package  formats  that  solve  these
challenges. Amkor produces more  than 1,000 package  types, representing one  of
the  broadest  package  offerings  in  the  semiconductor  industry.  We provide
customers with  a wide  array of  packaging alternatives  including  traditional
leadframe,  advanced leadframe and laminate packages,  in both wirebond and flip
chip formats.  We are  also a  leading assembler  of complementary  metal  oxide
silicon  ("CMOS")  image sensor  devices used  in  digital cameras  and cellular
phones, and micro-electromechanical system ("MEMS") devices used in a variety of
end markets,  including automotive,  industrial and  personal entertainment.  We
also  offer an  extensive line  of services to  test digital,  logic, analog and
mixed signal semiconductor devices. We believe that the breadth of our packaging
and test services  is important  to customers seeking  to reduce  the number  of
their suppliers.

  LEADING TECHNOLOGY INNOVATOR

     We   believe  that  we  are  one  of  the  leading  providers  of  advanced
semiconductor packaging  and  test solutions.  We  have designed  and  developed
several  state-of-the-art leadframe  and laminate package  formats including our
MicroLeadFrame(TM), VisionPak(TM),  PowerQuad(R),  SuperBGA(R),  fleXBGA(R)  and
ChipArray(R)  BGA packages. To  maintain our leading  industry position, we have
more than 300  employees engaged  in research  and development  focusing on  the
design  and development of  new semiconductor packaging  and test technology. We
work  closely  with  customers  and  technology  partners  to  develop  new  and
innovative package designs.

  LONG-STANDING RELATIONSHIPS WITH PROMINENT SEMICONDUCTOR COMPANIES

     Our  customer base consists  of more than 400  companies, including most of
the world's largest semiconductor companies.  Over the last three decades  Amkor
has developed long-standing relationships with many of our customers.

  ADVANCED MANUFACTURING CAPABILITIES

     We  believe  that our  company's manufacturing  excellence  has been  a key
factor in our success in attracting and retaining customers. We have worked with
our customers and our suppliers  to develop proprietary process technologies  to
enhance  our existing  manufacturing capabilities.  These efforts  have directly
resulted in reduced time  to market, increased  quality and lower  manufacturing
costs.  We believe our manufacturing cycle times are among the fastest available
from any subcontractor of packaging and test services.

                                        5
<PAGE>

COMPETITIVE DISADVANTAGES

     You should be  aware that our  competitive strengths may  be diminished  or
eliminated  due  to  certain  challenges  faced by  our  company  and  which our
principal competitors may not face, including the following:

     - High Leverage and Restrictive  Covenants -- Our substantial  indebtedness
       and  the covenants  contained in  the agreements  with our  lenders could
       materially restrict  our operations  and adversely  affect our  financial
       condition.

     - Risks  Associated  With  International  Operations --  We  depend  on our
       factories in the Philippines, Korea, Japan, Taiwan and China. Many of our
       customers' operations are also located outside of the U.S. To the  extent
       political  or economic  instability or military  actions occur  in any of
       these regions, our operations could be harmed.

     - Difficulties  Integrating  Acquisitions  --  We  face  challenges  as  we
       integrate  new  and  diverse  operations  and  try  to  attract qualified
       employees to support our expansion plans.

     In addition,  we and  our competitors  face a  variety of  operational  and
industry  risks inherent  to the  industry in which  we operate.  For a complete
discussion of  risks associated  with our  business, please  read  "Management's
Discussion and Analysis of Financial Condition and Results of Operations -- Risk
Factors  that May Affect Future Operating Performance"  in Item 7 of this annual
report.

STRATEGY

     To build  upon our  leading industry  position and  to remain  a  preferred
subcontractor  of semiconductor packaging and test services, we are pursuing the
following strategies:

  CAPITALIZE ON OUTSOURCING TREND

     We believe that while  the outsourcing trend has  been impacted during  the
recent   industry  downturn,  there  remains  a  long-term  trend  towards  more
outsourcing on the  part of  semiconductor companies. During  this downturn,  we
believe  that many  vertically integrated semiconductor  companies increased the
use of their in-house packaging and  test capabilities in order to minimize  the
impact  of  significant  excess  internal capacity  that  resulted  from sharply
lowered demand. At  the same time,  however, a number  of vertically  integrated
semiconductor  companies accelerated their use  of outsourcing. In January 2001,
we commenced  a  60% Amkor-owned  venture  with Toshiba  Corporation,  in  which
Toshiba  outsourced an entire packaging and test factory to the venture. We also
reached agreement in 2002 with Agilent Technologies, whereby Agilent has  ceased
the packaging and testing of certain package types for its semiconductor devices
used  in printers, and is now using Amkor as the exclusive provider of packaging
and test services for these package  types. We intend to continue to  capitalize
on  the expected growth  in the outsourcing of  semiconductor packaging and test
services.  We  believe  semiconductor  companies  will  increasingly   outsource
packaging and test services to companies who can provide advanced technology and
high-quality, high-volume manufacturing expertise.

  LEVERAGE SCALE AND SCOPE OF PACKAGING AND TEST CAPABILITIES

     We  are committed  to expanding  both the scale  of our  operations and the
scope of our packaging and  test services. We believe  that our scale and  scope
allow  us to provide cost-effective solutions  to our customers in the following
ways:

     - We have  the  capacity  to  absorb large  orders  and  accommodate  quick
       turn-around times;

     - We  use our size and industry position to obtain low pricing on materials
       and manufacturing equipment; and

     - We offer an industry-leading breadth  of packaging and test services  and
       can serve as a single source for many of our customers.

                                        6
<PAGE>

 MAINTAIN OUR TECHNOLOGY LEADERSHIP

     We  intend to continue  to develop leading-edge  packaging technologies. We
believe that our  focus on research  and product development  will enable us  to
enter  new markets early, capture  market share and promote  the adoption of our
new package  designs as  industry standards.  We seek  to enhance  our  in-house
research and development capabilities through the following activities:

     - Collaborating  with customers to  gain access to  technology roadmaps for
       next generation semiconductor  designs and to  develop new packages  that
       satisfy the requirements of those technology roadmaps;

     - Collaborating with companies, such as Toshiba Corporation, Cisco Systems,
       Ericsson  Corporation  and  Nokia  Group,  to  design  new  packages that
       function with the next generation of electronic products; and

     - Implementing new package  designs by entering  into technology  alliances
       and  by licensing leading-edge designs from  others. For example, we have
       entered into a strategic alliance with Sharp Corporation to promote  chip
       scale  packaging with fleXBGA(R). We have licensed from Tessera, Inc. its
       microBGA(R) design. We  have also licensed  flip chip package  technology
       from  LSI Logic Corporation  and wafer bumping  technology from Flip Chip
       Technologies  and  Unitive  Technologies.   In  general,  these   license
       agreements  are  non-exclusive, royalty-bearing  arrangements  with terms
       extending to various dates between 2008 and 2011.

 BROADEN THE GEOGRAPHICAL SCOPE OF OUR MANUFACTURING BASE

     Prior to  2001, our  company's manufacturing  operations were  centered  in
Korea  and the Philippines. In order  to diversify our operational footprint and
better serve our customers, we adopted  a strategy of expanding our  operational
base  to  key  microelectronic  manufacturing areas  of  Asia.  During  2001, we
commenced a joint  venture with Toshiba  Corporation in Japan,  we acquired  two
businesses  in Taiwan, and we established a new factory in China. Our goal is to
build operational  scale in  these new  geographic locations  and capitalize  on
growth opportunities in their respective markets.

 PROVIDE AN INTEGRATED, TURNKEY SOLUTION

     We  are  able  to provide  a  turnkey solution  comprised  of semiconductor
package design, packaging, test and drop shipment services. We believe that this
will enable customers  to achieve  faster time to  market for  new products  and
improved cycle times.

 STRENGTHEN CUSTOMER RELATIONSHIPS

     We  intend to further develop  our long-standing customer relationships. We
believe that because  of today's  shortened technology  life cycles,  integrated
communications  are crucial  to speed time  to market. We  have customer support
personnel located near  the facilities  of major customers  and in  acknowledged
technology  centers. These support personnel work closely with customers to plan
production for existing packages as well as to develop requirements for the next
generation of  packaging technology.  In addition,  we are  implementing  direct
electronic  links with our customers to enhance communication and facilitate the
flow of real-time engineering data and order information.

 PURSUE STRATEGIC ACQUISITIONS

     We are evaluating candidates for strategic acquisitions and joint  ventures
to strengthen our core business and expand our geographic reach. We believe that
there are many opportunities to acquire the in-house packaging operations of our
customers and competitors. To the extent we acquire operations of our customers,
we  intend  to  structure  any  such  acquisition  to  include  long-term supply
contracts with those customers. In addition, we intend to enter new markets near
clusters of wafer foundries, which are large sources of demand for packaging and
test services.

                                        7
<PAGE>

PACKAGING AND TEST SERVICES

PACKAGING SERVICES

     We offer a broad range of package formats designed to provide our customers
with a full  array of  packaging solutions. Our  packages are  divided into  two
families:   traditional,  which   includes  principally   traditional  leadframe
products, and advanced packages, which includes principally advanced  leadframes
and laminate products.

     In   response  to  the  increasing   demands  of  today's  high-performance
electronic  products,  semiconductor  packages  have  evolved  from  traditional
leadframe packages and now include advanced leadframe, and laminate formats. The
differentiating characteristics of these package formats include (1) the size of
the  package, (2) the  number of electrical connections  the package can support
(3) the thermal and  electrical characteristics of the  package, and (4) in  the
case  of our System-in-Package  family of laminate  packages, the integration of
multiple active and passive components in a single package.

     As semiconductor  devices  increase in  complexity,  they often  require  a
larger number of electrical connections. Leadframe packages are so named because
they  connect the electronic circuitry on the semiconductor device to the system
board through leads  on the  perimeter of  the package.  Our laminate  products,
typically  called ball grid array or BGA, use balls on the bottom of the package
to create  the electrical  connections.  This array  format can  support  larger
numbers of electrical connections.

     Evolving  semiconductor technology  has allowed  designers to  increase the
level of  performance and  functionality in  portable and  handheld  electronics
products,  and this  has led  to the  development of  smaller package  sizes. In
leading-edge packages, the size of the  package is reduced to approximately  the
size of the individual chip itself in a process known as chip scale packaging.

     The  following table sets forth by product type, for the periods indicated,
the amount of our packaging and test net revenues in millions of dollars and the
percentage of such net revenues:

<Table>
<Caption>
                                                           YEAR ENDED DECEMBER 31,
                                               ------------------------------------------------
                                                    2002             2001             2000
                                               --------------   --------------   --------------
                                                            (DOLLARS IN MILLIONS)
<S>                                            <C>      <C>     <C>      <C>     <C>      <C>
Traditional packages.........................  $  391    27.8%  $  439    32.8%  $  606    30.1%
Advanced packages............................     915    65.1      790    59.1    1,286    64.0
Test.........................................     100     7.1      108     8.1      118     5.9
                                               ------   -----   ------   -----   ------   -----
  Total packaging and test net revenues......  $1,406   100.0%  $1,337   100.0%  $2,010   100.0%
                                               ======   =====   ======   =====   ======   =====
</Table>

     We historically  marketed the  output  of fabricated  semiconductor  wafers
provided   by  a   wafer  fabrication  foundry   owned  and   operated  by  Anam
Semiconductor, Inc. (ASI). Our net revenues from wafer fabrication services were
$234 million,  $181  million  and  $378  million of  in  2002,  2001  and  2000,
respectively.  On  February 28,  2003, we  sold  our wafer  fabrication services
business to ASI. Beginning with the first  quarter of 2003, we will reflect  our
wafer  fabrication services segment as a  discontinued operation and restate our
historical results.

 TRADITIONAL PACKAGES

     Traditional, leadframe-based  packages are  the  most widely  used  package
family  in the semiconductor industry and  are typically characterized by a chip
encapsulated in a plastic mold compound  with metal leads on the perimeter.  The
most  common  traditional  leadframe package  is  the SOIC,  which  accounts for
approximately one half of all integrated  circuit (IC) packages produced by  the
semiconductor  industry. The  traditional leadframe  package family  has evolved
from "through  hole design,"  where the  leads  are plugged  into holes  on  the
circuit  board to "surface  mount design," where  the leads are  soldered to the
surface of the  circuit board. We  offer a wide  range of lead  counts and  body
sizes to satisfy variations in the size of customers' semiconductor devices.

                                        8
<PAGE>

 ADVANCED PACKAGES

  Advanced Leadframe Packages

     Through  a  process of  continuous engineering  and customization,  we have
designed several advanced leadframe package  types that are thinner and  smaller
than  traditional leadframe packages, with the ability to accommodate more leads
on the perimeter  of the package.  These advanced leadframe  packages also  have
superior  thermal and electrical characteristics,  which allow them to dissipate
heat generated by  high-powered semiconductor devices  while providing  enhanced
electrical  connectivity. We  plan to  continue to  develop increasingly smaller
versions of these packages to keep pace with continually shrinking semiconductor
device sizes and demand for miniaturization of portable electronic products.

     One  of   our  newest   advanced  leadframe   package  offerings   is   the
MicroLeadFrame(TM),  a family of "leadless"  advanced leadframe packages that is
particularly well suited for radio  frequency ("RF") and wireless  applications.
Our  smallest MicroLeadFrame package is only 2mm  square and can fit on the head
of a pin.

 Laminate Packages

     The laminate family  employs the ball  grid array design  which utilizes  a
plastic  or tape laminate substrate rather than a leadframe substrate and places
the electrical connections on the bottom  of the package rather than around  the
perimeter.

     The  ball grid array  format was developed  to address the  need for higher
lead counts required by advanced semiconductor  devices. As the number of  leads
on  leadframe packages  increased, leads  were placed  closer to  one another in
order to maintain the size of  the package. The increased lead density  resulted
in  electrical shorting problems,  and required the  development of increasingly
sophisticated  and  expensive  techniques   for  producing  circuit  boards   to
accommodate the high number of leads.

     The  ball grid  array format  solved this  problem by  effectively creating
leads on the bottom of the package in the form of small bumps or balls that  can
be  evenly distributed across the entire bottom surface of the package, allowing
greater distance between the individual leads.

     Our first package  format in this  family was the  plastic ball grid  array
(PBGA).  We have  subsequently designed or  licensed additional  ball grid array
package formats that have superior performance characteristics and features that
enable low-cost, high-volume manufacturing. These new laminate products include:

     - SuperBGA(R), which  includes a  copper  layer to  dissipate heat  and  is
       designed for low-profile, high-power applications;

     - microBGA(R),  which is designed to be  approximately the same size as the
       chip and uses  a thinner tape  substrate rather than  a plastic  laminate
       substrate; and

     - ChipArray(R)  BGA, in which  the package is  only 1.5 mm  larger than the
       chip itself.

     - Tape SuperBGA(R),  TapeArray(TM)  BGA  and Wafer  Level  Package  further
       reduce package size and increase manufacturing efficiency.

 Other Advanced Packages

     To  capitalize on an increasing customer demand for higher levels of system
integration, we created our "System-in-Package" ("SiP") modules. SiP modules are
integrated solutions that  use both advanced  packaging and traditional  surface
mount   techniques  to   enable  the   combination  of   otherwise  incompatible
technologies in a single, highly reliable package. Most of our SiP packages  are
laminate  based. By integrating  various system elements  into a single-function
block, the SiP module delivers space and power efficiency, high performance, and
lower production costs. Our SiP technology is being used to produce a variety of
devices including  power  amplifiers  for  cellular  phones,  memory  cards  and
sensors.

                                        9
<PAGE>

     In order to accommodate the emerging use of digital imaging in a variety of
consumer   products,  we  developed  VisionPak(TM),   a  family  of  CMOS  image
sensor-based packages  that can  be incorporated  in such  products as  cellular
phones, PDAs, digital cameras and PCs.

     We are also a leading outsourced provider of micro-electromechanical system
("MEMS")  based  packages that  are  used in  a  broad range  of  industrial and
consumer applications, including automobiles and home entertainment.

 TEST SERVICES

     Amkor provides a complete  range of test  solutions including wafer  probe,
final  test, strip test, marking, bake, drypack,  and tape and reel. The devices
we test  encompass  nearly  all  technologies produced  in  the  industry  today
including digital, linear, mixed signal, RF and integrated combinations of these
technologies.  In 2002 Amkor tested  over 1.1 billion units  making Amkor one of
the highest  volume testing  companies  in the  subcontract packaging  and  test
business. We tested 21%, 16% and 17% of the units that we packaged in 2002, 2001
and  2000, respectively. Our test operations are geographically located with our
packaging operations  to  improve cycle  time  and facilitate  information  flow
between the various manufacturing operations and with our customers.

     We  are also an  industry leader in  providing innovative testing solutions
that help to lower  the total cost  of test for our  customers. Two examples  of
these  innovative approaches are strip test and low cost RF test. In strip test,
we integrate  the  testing  process  into  the  packaging  process.  This  is  a
significant  departure from the industry standard practice of treating packaging
and  test  as  separate  unlinked  operations.  Using  strip  test   technology,
semiconductor  devices are tested  while they are  still in the  format they are
naturally produced in during the packaging process. This process is superior  to
traditional  non-integrated  testing  because  it allows  for  large  numbers of
devices to be tested  at the same  time, increases the  number of good  devices,
improves the quality of the finished device and improves throughput.

     In  the area of low cost RF test,  we have developed one of the lowest cost
test solutions in the industry for testing simple RF devices that are  pervasive
in  today's cell phones  and wireless LAN products.  This test approach combines
inexpensive test hardware with integration  software to achieve test costs  that
are  significantly less costly than industry standard test practices. We believe
that our low cost RF test technology provides a competitive advantage for  Amkor
and  when it is combined with our System in Package packaging technology, offers
our customers one of the industry's lowest total cost solutions.

     Amkor also provides value added  engineering services in addition to  basic
device  testing. These services include  test program development, test hardware
development,  test  program  conversion  to  lower  cost  test  systems,  device
characterization  and  reliability qualification  testing.  In total,  Amkor can
provide all of  the test  engineering services needed  by our  customers to  get
their  products ready for  high volume production. We  believe that this service
will continue to  become more valuable  to our customers  as they face  resource
constraints  not  only  in their  production  testing,  but also  in  their test
engineering and development areas.

WAFER FABRICATION SERVICES

     In January 1998,  we entered  into a supply  agreement with  ASI to  market
wafer  fabrication services  provided by  ASI's semiconductor  wafer fabrication
facility using  0.35 micron,  0.25 micron  and 0.18  micron complementary  metal
oxide silicon ("CMOS") process technology provided by Texas Instruments pursuant
to  technology assistance agreements with ASI. On February 28, 2003, we sold our
wafer fabrication services business to ASI. Additionally, we obtained a  release
from  Texas Instruments  regarding our  contractual obligations  with respect to
wafer fabrication services  to be performed  subsequent to the  transfer of  the
business  to ASI. Beginning with the first  quarter of 2003, we will reflect our
wafer fabrication services segment as  a discontinued operation and restate  our
historical results.

                                        10
<PAGE>

RESEARCH AND DEVELOPMENT

     Our  research  and  development  efforts focus  on  developing  new package
products  and  improving  the  efficiency  and  capabilities  of  our   existing
production  processes. We believe that technology  development is one of the key
success factors in the semiconductor packaging and test market and believe  that
we  have a distinct advantage in this area. Our research and development efforts
support our customers'  needs for smaller  packages, increased performance,  and
lower  cost. We  continue to  invest our  research and  development resources to
further the  development  of flip  chip  interconnection solutions,  chip  scale
packages    that   are   nearly    the   size   of    the   semiconductor   die,
micro-electromechanical system ("MEMS") devices used in a variety of end markets
including automotive, industrial  and personal entertainment,  our stacked  chip
packages that stack as many as three semiconductor dies in a single package, and
System-in-Package  technology, that uses both advanced packaging and traditional
surface mount techniques to enable the  combination of technologies in a  single
chip.

     As  of December 31,  2002, we had  more than 300  employees in research and
development activities.  In  addition,  we  involve  management  and  operations
personnel  in research  and development activities.  In 2002, 2001  and 2000, we
spent $31.2 million, $38.8 million and $26.1 million, respectively, on  research
and  development. We expect to continue to invest in research and development at
similar levels in future periods.

     We believe  that our  focus on  research and  product development  and  the
launching  of leading-edge package technologies enables  us to enter new markets
early, capture  market  share  and  promote the  adoption  of  our  new  package
offerings  as industry standards. We license our leading-edge technology such as
MicroLeadFrame(TM) to customers and competitors. We seek to enhance our in-house
research and development capability through the following activities:

     - Collaborating with customers  to gain access  to technology roadmaps  for
       next  generation semiconductor designs  and to develop  new packages that
       satisfy the requirements of those technology roadmaps;

     - Collaborating with companies, such as Toshiba Corporation, Cisco Systems,
       Ericsson Corporation  and  Nokia  Group,  to  design  new  packages  that
       function with the next generation of electronic products; and

     - Implementing  new package  designs by entering  into technology alliances
       and by licensing leading-edge designs  from others. For example, we  have
       entered  into a strategic alliance with Sharp Corporation to promote chip
       scale packaging  with fleXBGA(R).  We have  licensed from  Tessera,  Inc.
       their  microBGA(R)  design.  We  have  also  licensed  flip  chip package
       technology from LSI Logic Corporation  and wafer bumping technology  from
       Flip  Chip  Technologies  and  Unitive  Technologies.  In  general, these
       license agreements are  non-exclusive, royalty-bearing arrangements  with
       terms extending to various dates between 2008 and 2011.

MARKETING AND SALES

     We  sell our packaging and test services  to our customers and support them
through a network of international offices.  To better serve our customers,  our
offices  are  located near  our  largest customers  or  areas where  there  is a
concentration of several of our customers. Our office locations include sites in
the U.S.  (Chandler, Arizona;  Irvine, Santa  Clara and  San Diego,  California;
Boston,  Massachusetts; Greensboro, North  Carolina; West Chester, Pennsylvania,
and Austin and  Dallas, Texas),  China, France, Japan,  Korea, the  Philippines,
Singapore and Taiwan.

     To  provide comprehensive sales and customer service, we assign each of our
customers a direct support  team consisting of an  account manager, a  technical
program  manager, a  test program  manager and  both field  and factory customer
support representatives.  We also  typically support  our largest  multinational
customers  from multiple office locations to make sure we are fully aligned with
their various operational and business entities.

     The direct support  teams are  closely supported  by an  extended staff  of
product  managers, process and reliability  engineers, marketing and advertising
specialists, information systems technicians and factory

                                        11
<PAGE>

personnel. Together, these direct and extended support teams deliver an array of
services to our customers. These services include:

     - managing and coordinating ongoing manufacturing activity;

     - 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 assisting in the  resolution of technical and logistical
       issues.

     We implement direct  electronic links  with our customers  to achieve  near
real time and automated communications of order fulfillment information, such as
inventory  control  and  production  schedules, and  engineering  data,  such as
production yields, device specifications and quality indices, and to connect our
customers to our sales and marketing  personnel worldwide and to our  factories.
Web-enabled  tools provide our customers real time access to the status of their
products, the performance of  our manufacturing lines,  and technical data  they
require to support their new product introductions.

CUSTOMERS

     As  of January 31, 2003, we had  more than 400 customers, and our customers
include many of  the largest  semiconductor companies  in the  world. The  table
below lists our top 50 customers in 2002 based on revenues:

AMI Semiconductor, Inc.
Adaptec, Inc.
Advanced Micro Devices, Inc.
Agere Technologies, Inc.
Agilent Technologies
Altera Corporation
American Micro Systems, Inc.
Analog Devices, Inc.
Atmel Corporation
Austria Mikro Systeme
Cirrus Logic
Conexant Systems Inc.
Cypress Semiconductor
ESS Technology Inc.
Fairchild Semiconductor Corporation
Fujitsu Limited
Infineon Technologies AG
Integrated Circuit Systems, Inc.
Integrated Device Technology, Inc.
Intel Corporation
International Business Machines Corporation
International Rectifier
Intersil Corporation
Lattice Semiconductor Corporation
LSI Logic Corporation
Macronix International Corporation
Maxim Integrated Circuits
Mediatek Inc.
Melexis N.V.
Microchip Technology Inc.
Motorola, Inc.
National Semiconductor Corporation
NEC Corporation Ltd.
Omachi Fuji Co., LTD
ON Semiconductor
PMC -- Sierra Inc.
Philips Electronics
R.F Micro Devices
Robert Bosch GmbH
Samsung Electronics Corporation, LTD
Sanyo Electric Co., LTD
Silicon Laboratories Inc.
Skyworks Solutions, Inc.
Sony Semiconductor Corporation
ST Microelectronics PTE
Standard Microsystems
Texas Instruments, Inc.
Toshiba Corporation
Xilinx, Inc.
Zilog Electronics

     With the commencement of operations of Amkor Iwate and the acquisition of a
packaging  and test  facility from Toshiba  in 2001, total  net revenues derived
from Toshiba accounted for 12.6% and 14.3% of our consolidated net revenues  for
2002 and 2001, respectively. Prior to the sale of our wafer fabrication services
business  to ASI  in February  2003, we derived  substantially all  of our wafer
fabrication revenues from Texas

                                        12
<PAGE>

Instruments ("TI").  Total net  revenues derived  from TI  accounted for  13.9%,
10.2%   and  14.1%  of  consolidated  net  revenues  in  2002,  2001  and  2000,
respectively.

MATERIALS AND EQUIPMENT

     Our  packaging  operations  depend  upon  obtaining  adequate  supplies  of
materials  and equipment on a timely basis.  The principal materials used in our
packaging process  are leadframes  or laminate  substrates, gold  wire and  mold
compound.  We purchase materials based on  customer forecasts, and our customers
are generally responsible  for any unused  materials in excess  of the  quantity
that they indicated that they would need.

     We  work  closely  with  our  primary  material  suppliers  to  insure that
materials are  available and  delivered  on time.  Moreover, we  also  negotiate
worldwide  pricing agreements with our major  suppliers to take advantage of the
scale of  our  operations. We  are  not dependent  on  any one  supplier  for  a
substantial portion of our material requirements.

     Our   packaging  operations  depend  on   obtaining  adequate  supplies  of
manufacturing equipment on a timely basis. We work closely with major  equipment
suppliers  to insure that equipment is delivered  on time and that the equipment
meets our stringent performance specifications.

     For a  discussion of  additional risks  associated with  our materials  and
equipment  suppliers,  see "Management's  Discussion  and Analysis  of Financial
Condition and  Results of  Operations --  Risk Factors  that May  Affect  Future
Operating Performance" in Item 7 of this annual report.

ENVIRONMENTAL MATTERS

     The  semiconductor packaging process uses chemicals and gases and generates
byproducts that are subject to extensive governmental regulations. For  example,
at  our foreign manufacturing  facilities, we produce  liquid waste when silicon
wafers are diced  into chips  with the  aid of  diamond saws,  then cooled  with
running  water. Federal,  state and local  regulations in the  United States, as
well as environmental  regulations internationally, impose  various controls  on
the  storage,  handling,  discharge  and  disposal  of  chemicals  used  in  our
manufacturing processes and on the factories we occupy.

     We have been  engaged in  a continuing  program to  assure compliance  with
federal,  state and local  environmental laws and regulations.  We do not expect
capital  expenditures   or  other   costs   attributable  to   compliance   with
environmental  laws and  regulations to  have a  material adverse  effect on our
business, results of operations or financial condition.

     For a  discussion of  additional risks  associated with  the  environmental
issues,  see "Management's  Discussion and  Analysis of  Financial Condition and
Results  of  Operations  --  Risk  Factors  that  May  Affect  Future  Operating
Performance -- Environmental Regulations" in Item 7 of this annual report.

COMPETITION

     The   subcontracted  semiconductor  packaging  and   test  market  is  very
competitive. We face substantial competition from established packaging and test
service  providers  primarily   located  in  Asia,   including  companies   with
significant   manufacturing   capacity,   financial   resources,   research  and
development  operations,  marketing  and  other  capabilities.  These  companies
include  Advanced Semiconductor Engineering, Inc.,  ASE Test Limited, ASAT Ltd.,
ChipPAC Incorporated,  Orient Semiconductor  Engineering, ST  Assembly and  Test
Services,  and Siliconware  Precision Industries  Co., Ltd.  Such companies have
also established relationships with many large semiconductor companies that  are
current or potential customers of our company. We also compete with the internal
semiconductor packaging and test capabilities of many of our customers.

     The  principal elements  of competition in  the subcontracted semiconductor
packaging market  include:  (1)  breadth  of  package  offering,  (2)  technical
competence, (3) new package design and implementation,

                                        13
<PAGE>

(4) manufacturing yields,  (5) manufacturing cycle  times, (6) customer  service
and  (7) price. We believe  that we generally compete  favorably with respect to
each of these factors.

INTELLECTUAL PROPERTY

     As of March 20, 2003, we held 224 U.S. patents and had 209 pending patents.
In addition to the U.S. patents,  we held 637 patents in foreign  jurisdictions.
We  expect to continue  to file patent applications  when appropriate to protect
our proprietary technologies,  but we  cannot assure  you that  we will  receive
patents  from pending or future applications. In addition, any patents we obtain
may be challenged, invalidated  or circumvented and  may not provide  meaningful
protection or other commercial advantage to us.

     We may need to enforce our patents or other intellectual property rights or
to  defend  our company  against claimed  infringement of  the rights  of others
through litigation, which could result in substantial cost and diversion of  our
resources.  The  semiconductor  industry  is  characterized  by  frequent claims
regarding patent  and other  intellectual property  rights. If  any third  party
makes a valid claim against us, we could be required to:

     - discontinue the use of certain processes;

     - cease the manufacture, use, import and sale of infringing products;

     - pay substantial damages;

     - develop non-infringing technologies; or

     - acquire licenses to the technology we had allegedly infringed.

If  we fail to  obtain necessary licenses  or if we  face litigation relating to
patent infringement or other intellectual  property matters, our business  could
suffer.

EMPLOYEES

     As  of  December  31, 2002,  we  had 20,276  full-time  employees including
approximately 700  employees  seconded from  Toshiba  whose employment  will  be
transferred  to Amkor as of  January 1, 2004. Of  the total employee population,
13,021 were  engaged  in  manufacturing, 5,650  were  engaged  in  manufacturing
support,  326  were engaged  in research  and development,  233 were  engaged in
marketing and sales and 1,046 were  engaged in finance, business management  and
administration.  We believe that  our relations with our  employees are good. We
have never experienced a work stoppage in any of our factories. Our employees in
the U.S., the Philippines, Taiwan and China are not represented by a  collective
bargaining unit. Certain members of our factories in Korea and Japan are members
of  a union,  and all  employees at  these factories  are subject  to collective
bargaining agreements.

ITEM 2.  PROPERTIES

     We provide  packaging and  test services  through our  factories in  Korea,
Philippines,  Japan, Taiwan and China. We  believe that total quality management
is a  vital  component  of  our advanced  manufacturing  capabilities.  We  have
established  a comprehensive quality  operating system designed  to: (1) promote
continuous improvements in our products and (2) maximize manufacturing yields at
high volume production  without sacrificing the  highest quality standards.  The
majority of our factories are ISO9001, ISO9002, ISO14001, QS9000 and SAC Level I
certified.  Additionally, as  we acquire  or construct  additional factories, we
commence the quality certification process  to meet the certification  standards
of  our existing  facilities. We  believe that many  of our  customers prefer to
purchase from quality certified suppliers. In addition to providing  world-class
manufacturing  services,  our factories  in  the Philippines  and  Korea provide
purchasing, engineering and  customer service support.  The size, location,  and
manufacturing services provided by each of our company's factories are set forth
in the table below as of February 28, 2003.

                                        14
<PAGE>

<Table>
<Caption>
                                                      APPROXIMATE
                                                     FACTORY SIZE
LOCATION                                             (SQUARE FEET)                 SERVICES
--------                                             -------------                 --------
<S>                                                  <C>             <C>
Our Factories
Korea
Seoul, Korea (K1)..................................     670,000      Packaging services
                                                                     Package and process development
Bucheon, Korea (K2)(1).............................     271,000      Packaging services
Pupyong, Korea (K3)................................     428,000      Packaging and test services
Kwangju, Korea (K4)................................     885,000      Packaging and test services
Philippines
Muntinlupa, Philippines (P1)(2)....................     602,000      Packaging and test services
                                                                     Packaging and process development
Muntinlupa, Philippines (P2)(2)....................     112,000      Packaging services
Province of Laguna, Philippines (P3)(2)............     406,000      Packaging and test services
Province of Laguna, Philippines (P4)(2)............     200,000      Test services
Taiwan
Lung Tan, Taiwan...................................     246,000      Packaging and test services
China
Shanghai, China(3).................................     145,000      Packaging and test services
Japan
Kitakami, Japan(3).................................     147,000      Packaging and test services
</Table>

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

(1) The land associated with this facility is leased from ASI. The buildings are
    owned by Amkor.

(2) As  a result of foreign ownership  restrictions in the Philippines, the land
    associated with  our Philippine  factories is  leased from  subsidiaries  in
    which  Amkor controls a  minority interest, generally  a 40% interest. Amkor
    owns the buildings at our P1, P3 and P4 facilities and leases the  buildings
    at our P2 facility.

(3) Leased facility.

     We  expect to  complete the  closing of the  K2 facility  in Bucheon, South
Korea during the second quarter of 2003. We will transfer most of its  packaging
operations  into  our  K4  factory  in  Kwangju,  South  Korea.  Our operational
headquarters  is   located  in   Chandler,  Arizona,   and  our   administrative
headquarters,  which is  leased, 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 and  product management planning and
marketing. The West Chester location  houses finance and accounting, legal,  and
information  systems, and  serves as  a satellite  sales office  for our eastern
sales region. Our sales offices are located throughout the U.S. (Austin,  Texas;
Boston,  Massachusetts;  Chandler,  Arizona;  Dallas,  Texas;  Greensboro, North
Carolina; Irvine,  San Diego  and  Santa Clara,  California; and  West  Chester,
Pennsylvania) and internationally in France, Singapore, Taiwan, the Philippines,
Japan and Korea.

ITEM 3.  LEGAL PROCEEDINGS

     We  currently are  a party  to various  legal proceedings,  including those
noted below. While  management, including internal  counsel, currently  believes
that  the  ultimate  outcome  of  these  proceedings,  individually  and  in the
aggregate, will not have a material adverse effect on our financial position  or
overall  trends  in results  of operations,  litigation  is subject  to inherent
uncertainties. Were an unfavorable ruling to occur, there exists the possibility
of a material adverse impact on the net income of the period in which the ruling
occurs. The  estimate of  the  potential impact  on  our financial  position  or
overall  results of operations for the  following legal proceedings could change
in the future.

                                        15
<PAGE>

  Fujitsu Limited v. Cirrus Logic, Inc.

     On April 16,  2002, Amkor was  served with  a Third Party  Complaint in  an
action  entitled  Fujitsu Limited  v. Cirrus  Logic,  Inc., No.  02-CV-01627 JW,
pending in  the  United States  District  Court  for the  Northern  District  of
California,   San  Jose   Division.  In   this  action,   Fujitsu  alleges  that
semiconductor devices it  purchased from Cirrus  Logic are defective  in that  a
certain  epoxy mold compound used in the  manufacture of the chip causes a short
circuit which renders Fujitsu  disk drive products  inoperable. Fujitsu did  not
specify  the amount  of damages  sought. Cirrus  Logic, in  response, denied the
allegations  of  the  complaint,  counterclaimed  against  Fujitsu  for   unpaid
invoices,  and filed its  Third Party Complaint against  Amkor alleging that any
liability for chip defects should be  assigned to Amkor because Amkor  assembled
the  subject semiconductor devices.  Upon receipt of  the Third Party Complaint,
Amkor filed an Answer denying all  liability, and its own Third Party  Complaint
against  Sumitomo Bakelite Co., Ltd., the Japanese manufacturer of the allegedly
defective epoxy  mold compound.  Sumitomo Bakelite  Co., Ltd.,  filed an  Answer
denying  liability. The case is in discovery. Currently, the matter is scheduled
to proceed to trial in January 2004.

     Amkor believes it has  meritorious defenses to  Cirrus Logic's Third  Party
Complaint and intends to vigorously defend the case. Moreover, Amkor believes it
has  valid third  party claims against  Sumitomo Bakelite should  the epoxy mold
compound in question  be found  to be defective.  However, no  assurance can  be
given  that an adverse result cannot occur, or that any adverse result would not
have a material impact upon Amkor. In this regard, other customers of Amkor have
made inquiry about the epoxy  mold compound in issue,  which was widely used  in
the semiconductor industry, and no assurance can be given that claims similar to
that  of Cirrus Logic will  not be made against Amkor  by other customers in the
future.

  Amkor Technology, Inc. v. Motorola, Inc.

     On August 16, 2002,  Amkor filed a complaint  against Motorola, Inc. in  an
action  captioned Amkor Technology, Inc. v.  Motorola, Inc., C.A. No. 02C-08-160
CHT, pending in  the Superior  Court of  the State of  Delaware in  and for  New
Castle County. In this action, Amkor is seeking declaratory judgment relating to
a  controversy  between Amkor  and Motorola  concerning:  (i) the  assignment by
Citizen Watch Co., Ltd. ("Citizen") to Amkor of a Patent License Agreement dated
January 25,  1996 between  Motorola and  Citizen (the  "License Agreement")  and
concurrent  assignment by Citizen to Amkor of Citizen's interest in U.S. Patents
5,241,133 and  5,216,278  (the  "'133  and  '278  patents");  and  (ii)  Amkor's
obligation to make certain payments pursuant to an Immunity Agreement dated June
30, 1993 between Amkor and Motorola (the "Immunity Agreement").

     Amkor  and Motorola have recently resolved  the controversy with respect to
all issues relating to the Immunity Agreement, and all claims and  counterclaims
filed  by the  parties in the  case relating  to the Immunity  Agreement will be
dismissed or  otherwise  disposed  of without  further  litigation.  The  claims
relating  to the License Agreement and the '133 and '278 Patents remain pending,
with a trial date currently scheduled for Fall 2003.

     Amkor believes it will prevail on the merits in this case. Moreover, should
it be determined that  the License Agreement or  Citizen's interest in the  '133
and  '278 Patents were not successfully  transferred to Amkor, Amkor believes it
has recourse against Citizen. However, no assurance can be given that an adverse
outcome in the case cannot occur, or  that any adverse outcome would not have  a
material impact on Amkor.

  Alcatel Business Systems

     On  November 5, 1999,  Amkor agreed to sell  certain semiconductor parts to
Alcatel Microelectronics,  N.V.  ("AME"),  a  subsidiary  of  Alcatel  S.A.  The
components were manufactured by Anam Semiconductor, Inc. ("Anam") for Amkor. AME
transferred  the parts to  another Alcatel subsidiary,  Alcatel Business Systems
("ABS"), which incorporated  the parts  into cellular phone  products. In  early
2001,  a dispute arose as to whether the  parts sold by Amkor were defective. On
March 18, 2002, ABS  and its insurer  filed suit against Amkor  and Anam in  the
Paris  Commercial Court of France. That court has commenced a special proceeding
before a technical expert to report on  the facts of the dispute. The report  of
the  court  appointed expert  is not  expected before  December 2003.  Amkor has
denied all liability and intends to vigorously defend itself.
                                        16
<PAGE>

Additionally,  Amkor has entered into a written agreement with Anam whereby Anam
has agreed to indemnify Amkor against any and all loss related to the claims  of
AME, ABS and ABS' insurer.

     In  response to the Paris lawsuit, on  May 22, 2002, Amkor filed a petition
to compel  arbitration in  the  United States  District  Court for  the  Eastern
District  of Pennsylvania against ABS, AME,  and ABS' insurer, claiming that any
dispute regarding is subject to the  arbitration clause of the November 5,  1999
agreement between Amkor and AME. ABS and ABS' insurer have refused to arbitrate.
This action is currently in discovery.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There  were no matters submitted  to a vote of  security holders during the
fourth fiscal quarter of the fiscal year ended December 31, 2002.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock is traded on  the Nasdaq National Market under the  symbol
"AMKR."  Public trading of the common stock began on May 1, 1998. Prior to that,
there was no public market for our common stock. The following table sets forth,
for the periods indicated, the high and  low sale price per share of our  common
stock as quoted on the Nasdaq National Market.

<Table>
<Caption>
                                                               HIGH     LOW
                                                              ------   ------
<S>                                                           <C>      <C>
2002
     First Quarter..........................................  $22.31   $13.00
     Second Quarter.........................................   24.25     3.90
     Third Quarter..........................................    6.10     1.20
     Fourth Quarter.........................................    7.47     1.61
2001
     First Quarter..........................................  $23.63   $14.63
     Second Quarter.........................................   25.00    14.88
     Third Quarter..........................................   22.48    10.52
     Fourth Quarter.........................................   18.02     9.42
</Table>

     There  were approximately 391 holders  of record of our  common stock as of
February 28, 2003.

DIVIDEND POLICY

     Since our public offering  in 1998, we  have never paid  a dividend to  our
stockholders.  We currently expect to retain future earnings, if any, for use in
the operation and  expansion of our  business and do  not anticipate paying  any
cash  dividends in  the foreseeable future.  In addition, our  secured bank debt
agreements and  the indentures  governing our  senior, senior  subordinated  and
convertible subordinated notes restrict our ability to pay dividends.

                                        17
<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES

     None.

EQUITY COMPENSATION PLANS

     The following table summarizes our equity compensation plans as of December
31, 2002, all of which have been approved by our stockholders:

<Table>
<Caption>
                                                                                      (C)
                                           (A)                               NUMBER OF SECURITIES
                                        NUMBER OF                             REMAINING AVAILABLE
                                     SECURITIES TO BE          (B)            FOR FUTURE ISSUANCE
                                       ISSUED UPON      WEIGHTED-AVERAGE         UNDER EQUITY
                                       EXERCISE OF      EXERCISE PRICE OF      COMPENSATION PLAN
                                       OUTSTANDING         OUTSTANDING       (EXCLUDING SECURITIES
                                         OPTIONS             OPTIONS        REFLECTED IN COLUMN(A))
                                     ----------------   -----------------   -----------------------
<S>                                  <C>                <C>                 <C>
Equity compensation plans approved
  by stockholders..................     6,573,263            $14.15         10,614,998(1)-(4)
</Table>

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

(1) Includes  10,096,837 options were reserved for issuance under the 1998 Stock
    Plan, 343,161 were reserved  for issuance under the  1998 Stock Option  Plan
    for  French Employees and  175,000 options were  reserved for issuance under
    the 1998 Director Option Plan. On November 8, 2002, we initiated a voluntary
    stock option  replacement program  such that  employees and  members of  our
    board  of directors could  elect to surrender their  existing options and be
    granted new  options  no earlier  than  six months  and  one day  after  the
    tendered  options were cancelled.  We will issue new  option grants equal to
    the same number  of shares  surrendered by  the employees.  Pursuant to  the
    terms  and conditions of  the offer to  exchange, a total  of 1,633 eligible
    employees participated and our company has accepted for cancellation options
    to purchase an aggregate of 7,115,891  shares of our company's common  stock
    under  the 1998 Stock Plan,  an aggregate of 35,000  shares of our company's
    common stock under the 1998 Director Option Plan and an aggregate of 248,200
    shares of our company's  common stock under the  1998 Stock Plan for  French
    Employees. Subject to the terms and conditions of the offer to exchange, our
    company  will grant new  options to purchase 7,399,091  shares of our common
    stock no earlier than June 12, 2003 in exchange for the options tendered  by
    eligible employees and members of our board of directors and accepted by our
    company. The exercise price will equal the fair market value of common stock
    as of the new grant date.

(2) As  of December 31, 2002, no shares  of common stock were available for sale
    under the Stock Purchase Plan; however,  there is a provision for an  annual
    replenishment  to bring the  number of shares of  common stock available for
    sale under the plan up to 1,000,000 as of each January 1.

(3) As of December  31, 2002,  a total of  10,096,837 shares  were reserved  for
    issuance  under the 1998 Stock Plan, and  there is a provision for an annual
    replenishment to bring  the number of  shares of common  stock reserved  for
    issuance  under the plan up to 5,000,000 as of each January 1. As of January
    1, 2003,  since there  were  in excess  of  5,000,000 shares  available  for
    issuance  under the plan, no additional  shares were made available pursuant
    to the annual replenishment provision.

(4) As of December  31, 2002,  a total  of 343,161  shares of  common stock  are
    reserved for issuance under the French Plan, and there is a provision for an
    annual  replenishment to bring the number of shares of common stock reserved
    for issuance  under the  plan up  to 250,000  as of  each January  1. As  of
    January  1, 2003, since there were in excess of 250,000 shares available for
    issuance under the plan, no  additional shares were made available  pursuant
    to  the annual  replenishment provision. The  French Plan  will terminate in
    April 2003.  Amkor  intends to  implement  a  new French  Plan,  subject  to
    shareholder approval in 2003.

                                        18
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

                SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

     We  have  derived  the  selected  historical  consolidated  financial  data
presented below for, and as  of the end of, each  of the years in the  five-year
period  ended December 31, 2002 from  our consolidated financial statements. You
should read  the  selected  consolidated  financial  data  set  forth  below  in
conjunction  with "Management's  Discussion and Analysis  of Financial Condition
and Results of  Operations" and  our consolidated financial  statements and  the
related notes, included elsewhere in this annual report.

     The  summary  consolidated  financial  data  below  reflects  the following
transactions on a  historical basis  (i) our 1999  acquisition of  K4 from  Anam
Semiconductor,  Inc.  ("ASI")  for  $582.0  million  together  with  its related
financing, (ii) our  2000 acquisitions  of K1,  K2 and  K3 from  ASI for  $950.0
million and equity investment in ASI of $459.0 million together with the related
financing  for the acquisitions  and investment, (iii)  our 2001 acquisitions of
Amkor  Iwate   Corporation,   Sampo   Semiconductor   Corporation   and   Taiwan
Semiconductor  Technology Corporation (a  prior equity investment)  and (iv) our
2002 acquisitions of semiconductor packaging businesses from Citizen Watch  Co.,
Ltd.  and  Agilent Technologies,  Inc. We  historically  marketed the  output of
fabricated semiconductor wafers  provided by a  wafer fabrication foundry  owned
and  operated  by ASI.  On  February 28,  2003,  we sold  our  wafer fabrication
services business to  ASI. Beginning  with the first  quarter of  2003, we  will
reflect  our wafer fabrication services segment  as a discontinued operation and
restate our historical results.

<Table>
<Caption>
                                                                      YEAR ENDED DECEMBER 31,
                                                 -----------------------------------------------------------------
                                                    2002         2001          2000          1999          1998
                                                 ----------   -----------   -----------   -----------   ----------
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                              <C>          <C>           <C>           <C>           <C>
INCOME STATEMENT DATA:
  Net revenues:
    Packaging and test services................  $1,406,178   $1,336,674    $2,009,701    $1,617,235    $1,452,285
    Wafer fabrication services.................     233,529      181,188       377,593       292,737       115,698
                                                 ----------   ----------    ----------    ----------    ----------
         Total net revenues....................   1,639,707    1,517,862     2,387,294     1,909,972     1,567,983
                                                 ----------   ----------    ----------    ----------    ----------
  Cost of revenues -- including purchases from
    ASI........................................   1,521,887    1,448,064     1,782,158     1,560,816     1,307,150
                                                 ----------   ----------    ----------    ----------    ----------
  Gross profit.................................     117,820       69,798       605,136       349,156       260,833
                                                 ----------   ----------    ----------    ----------    ----------
  Operating expenses:
    Selling, general and administrative........     188,567      200,218       192,623       144,538       118,392
    Research and development...................      31,189       38,786        26,057        11,436         8,251
    Loss on disposal of fixed assets, net......       2,496       14,515         1,355         1,805         1,837
    Amortization of goodwill and other acquired
      intangibles(a)...........................       6,992       84,962        63,080        17,105         1,454
      Special charges(b).......................     291,970           --            --            --            --
                                                 ----------   ----------    ----------    ----------    ----------
         Total operating expenses..............     521,214      338,481       283,115       174,884       129,934
                                                 ----------   ----------    ----------    ----------    ----------
  Operating income (loss)......................    (403,394)    (268,683)      322,021       174,272       130,899
                                                 ----------   ----------    ----------    ----------    ----------
  Other (income) expense:
    Interest expense, net......................     147,497      164,064       119,840        45,364        18,005
    Foreign currency loss......................         917          872         4,812           308         4,493
    Other (income) expense, net(c).............        (961)      (3,669)          (60)       23,312         7,666
                                                 ----------   ----------    ----------    ----------    ----------
         Total other expense...................     147,453      161,267       124,592        68,984        30,164
                                                 ----------   ----------    ----------    ----------    ----------
</Table>

                                        19
<PAGE>

<Table>
<Caption>
                                                                      YEAR ENDED DECEMBER 31,
                                                 -----------------------------------------------------------------
                                                    2002         2001          2000          1999          1998
                                                 ----------   -----------   -----------   -----------   ----------
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                              <C>          <C>           <C>           <C>           <C>
  Income (loss) before income taxes, equity in
    loss of investees and minority interest....    (550,847)    (429,950)      197,429       105,288       100,735
  Provision (benefit) for income taxes(d)(e)...      65,815      (81,691)       22,285        26,600        24,716
  Equity in loss of investees(f)...............     (33,865)    (100,706)      (20,991)       (1,969)           --
  Loss on impairment of equity investment(g)...    (172,533)          --            --            --            --
  Loss on disposition of equity
    investment(g)..............................      (1,767)          --            --            --            --
  Minority interest(h).........................      (1,932)      (1,896)           --            --          (559)
                                                 ----------   ----------    ----------    ----------    ----------
  Net income (loss)(d).........................  $ (826,759)  $ (450,861)   $  154,153    $   76,719    $   75,460
                                                 ==========   ==========    ==========    ==========    ==========
  Basic net income (loss) per common share.....  $    (5.04)  $    (2.87)   $     1.06    $     0.64    $     0.71
                                                 ==========   ==========    ==========    ==========    ==========
  Diluted net income (loss) per common share...  $    (5.04)  $    (2.87)   $     1.02    $     0.63    $     0.70
                                                 ==========   ==========    ==========    ==========    ==========
  Shares used in computing basic net income per
    common share (pro forma for 1998)..........     164,124      157,111       145,806       119,341       106,221
  Shares used in computing diluted net income
    per common share (pro forma for 1998)......     164,124      157,111       153,223       135,067       116,596
OTHER FINANCIAL DATA:
  Depreciation and amortization including debt
    issue costs................................  $  333,596   $  465,083    $  332,909    $  180,332    $  119,239
  Capital expenditures.........................      95,104      158,700       480,074       242,390       107,889
</Table>

<Table>
<Caption>
                                                                                                    YEAR ENDED
                                                                                                   DECEMBER 31,
                                                                                                       1998
                                                                                                   ------------
<S>                                            <C>          <C>          <C>          <C>          <C>
PRO FORMA DATA (UNAUDITED)(D):
    Historical income before income taxes,
      equity in income (loss) of ASI and
      minority interest......................                                                       $  100,735
    Pro forma provision for income taxes.....                                                           29,216
                                                                                                    ----------
  Pro forma income before equity in income
    (loss) of investees and minority
    interest.................................                                                           71,519
  Historical equity in income (loss) of
    investees................................                                                               --
  Historical minority interest...............                                                             (559)
                                                                                                    ----------
  Pro forma net income.......................                                                       $   70,960
                                                                                                    ==========
  Basic pro forma net income per common
    share....................................                                                       $     0.67
                                                                                                    ==========
  Diluted pro forma net income per common
    share....................................                                                       $     0.66
                                                                                                    ==========
</Table>

<Table>
<Caption>
                                                                          DECEMBER 31,
                                                 --------------------------------------------------------------
                                                    2002         2001         2000         1999         1998
                                                 ----------   ----------   ----------   ----------   ----------
                                                                         (IN THOUSANDS)
<S>                                              <C>          <C>          <C>          <C>          <C>
BALANCE SHEET DATA:
  Cash and cash equivalents....................  $  311,249   $  200,057   $   93,517   $   98,045   $  227,587
  Short term investments.......................          --           --           --      136,595        1,000
  Working capital..............................     186,523      160,856      102,586      194,352      191,383
  Total assets.................................   2,557,984    3,223,318    3,393,284    1,755,089    1,003,597
  Total long-term debt.........................   1,737,690    1,771,453    1,585,536      687,456      221,846
  Total debt, including short-term borrowings
    and current portion of long-term debt......   1,808,713    1,826,268    1,659,122      693,921      260,503
  Stockholders' equity.........................     231,367    1,008,717    1,314,834      737,741      490,361
</Table>

                                        20
<PAGE>

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

(a)  As of  January  1,  2002,  we adopted  Statement  of  Financial  Accounting
     Standard  No. 142,  Goodwill and  Other Intangible  Assets. We reclassified
     $30.0 million of  intangible assets previously  identified as an  assembled
     workforce  intangible  to  goodwill.  Additionally,  we  stopped amortizing
     goodwill of $659.1 million.

(b)  During 2002,  we  recorded  $292.0  million  of  special  charges.  Special
     charges, in thousands, were comprised of:

<Table>
<S>                                                           <C>
Impairment of long-lived assets.............................  $190,266
Impairment of goodwill......................................    73,080
Lease termination and other exit costs......................    28,624
                                                              --------
                                                              $291,970
                                                              ========
</Table>

(c)  In  1999 we recognized a  pre-tax loss of $17.4 million  as a result of the
     early  conversion  of  $153.6  million  principal  amount  of  our  5  3/4%
     convertible subordinate notes due 2003.

(d)  Prior   to  our  reorganization  in  April  1998,  our  predecessor,  Amkor
     Electronics, Inc. ("AEI"), elected  to be taxed as  an S Corporation  under
     the  Internal Revenue  Code of  1986 and  comparable state  tax laws.  As a
     result AEI did not recognize any provision for federal income tax  expense.
     The  pro forma provision for income  taxes reflects the U.S. federal income
     taxes that would have been recorded if  AEI had been a C Corporation  prior
     to April 1998.

(e)  During  2002, we recorded a $138.2  million charge to establish a valuation
     allowance against our deferred tax assets consisting primarily of U.S.  and
     Taiwanese net operating loss carryforwards and tax credits.

(f)  As  of  January  1,  2002, we  adopted  Statement  of  Financial Accounting
     Standard  No.  142,  Goodwill  and  Other  Intangible  Assets.  We  stopped
     amortizing  equity method  goodwill of  $118.6 million  associated with our
     investment in ASI.

(g)  During 2002,  we recorded  impairment charges  totaling $172.5  million  to
     reduce  the carrying value of our investment  in ASI to ASI's market value.
     ASI is a publicly traded company on the Korean stock exchange. Additionally
     during 2002, we recorded  a loss of  $1.8 million on  the disposition of  a
     portion of our interest in ASI to Dongbu.

(h)  In  2001, minority  interest reflects  Toshiba's 40%  ownership interest in
     Amkor Iwate  in  Japan  as well  as  shares  that we  did  not  acquire  in
     connection  with our two acquisitions in Taiwan. In 1998, minority interest
     reflects ASI's 40% interest in  the earnings of Amkor/Anam Pilipinas,  Inc.
     ("AAP"), one of our subsidiaries in the Philippines.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

                      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 but not limited to  statements
regarding:  (1) the condition  and growth of  the industry in  which we operate,
including trends  toward  increased  outsourcing, reductions  in  inventory  and
demand  and  selling  prices  for  our  services,  (2)  our  anticipated capital
expenditures and  financing needs,  (3) our  belief as  to our  future  capacity
utilization  rates,  revenue,  gross  margins  and  operating  performance,  (4)
statements regarding the future of our relationship with ASI (5) our  statements
regarding  the anticipated financial impact of  the discontinuation of our wafer
fabrication services segment, and (6)  other statements that are not  historical
facts. In some cases, you can identify forward-looking statements by terminology
such  as "may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "continue," or the negative of these terms
or other  comparable  terminology. Because  such  statements include  risks  and
uncertainties,  actual results may  differ materially from  those anticipated in
such forward-looking statements as

                                        21
<PAGE>

a result  of  certain  factors,  including those  set  forth  in  the  following
discussion  as  well  as  in  "Risk Factors  that  May  Affect  Future Operating
Performance." The following discussion provides information and analysis of  our
results  of  operations for  the three  years  ended December  31, 2002  and our
liquidity and capital  resources. You  should read the  following discussion  in
conjunction  with our consolidated  financial statements and  the related notes,
included elsewhere in this annual report as  well as other reports we file  with
the Securities and Exchange Commission.

     Amkor  is the world's largest  subcontractor of semiconductor packaging and
test services. The company has built a leading position by:

     - Providing a  broad  portfolio  of packaging  and  test  technologies  and
       services;

     - Maintaining  a leading role in the  design and development of new package
       and test technologies;

     - Cultivating long-standing relationships with customers, including many of
       the world's leading semiconductor companies;

     - Developing expertise in high-volume manufacturing; and

     - Diversifying   our   operational   scope   by   establishing   production
       capabilities  in China,  Japan and  Taiwan, in  addition to long-standing
       capabilities in Korea and the Philippines.

     The semiconductors that we  package and test  for our customers  ultimately
become  components  in  electric  systems  used  in  communications,  computing,
consumer,  industrial,  automotive  and  military  applications.  Our  customers
include,   among   others,  Agilent   Technologies,  Atmel   Corporation,  Intel
Corporation, LSI  Logic Corporation,  Mediatek Inc.,  Philips Electronics  N.V.,
R.F.  Microdevices, ST Microelectronics PTE,  Sony Semiconductor Corporation and
Toshiba Corporation. The outsourced semiconductor  packaging and test market  is
very  competitive. We also compete with the internal semiconductor packaging and
test capabilities of many of our customers.

     Packaging and test are an integral part of the semiconductor  manufacturing
process. Semiconductor manufacturing begins with silicon wafers and involves the
fabrication  of  electronic  circuitry  into  complex  patterns,  thus  creating
individual chips  on the  wafers. The  packaging process  creates an  electrical
interconnect  between the semiconductor chip and the system board. In packaging,
the fabricated semiconductor wafers are cut into individual chips which are then
attached to a substrate and encased in a protective material to provide  optimal
electrical  and thermal performance. Increasingly,  packages are custom designed
for specific chips and specific end-market applications. The packaged chips  are
then  tested using  sophisticated equipment  to ensure  that each  packaged chip
meets its design specifications.

     We historically  marketed the  output  of fabricated  semiconductor  wafers
provided   by  a   wafer  fabrication  foundry   owned  and   operated  by  Anam
Semiconductor, Inc. ("ASI"). On February 28, 2003, we sold our wafer fabrication
services business to  ASI. Beginning  with the first  quarter of  2003, we  will
reflect  our wafer fabrication services segment  as a discontinued operation and
restate our historical results.

     Our business is tied  to market conditions  in the semiconductor  industry,
which  is highly cyclical. Based on  industry estimates, from 1981 through 2002,
there were  12 years  when semiconductor  industry growth,  measured by  revenue
dollars,  was 10%  or less and  10 years when  growth was 19%  or greater. Since
1981, the semiconductor  industry declined  in 1985,  1996, 1998  and 2001.  The
semiconductor  industry declined an unprecedented 32%  in 2001 and experienced a
1%  growth  in  2002  as  compared  to  2001.  The  historical  trends  in   the
semiconductor  industry are  not necessarily  indicative of  the results  of any
future period.  Semiconductor  industry  analysts  are  forecasting  significant
growth  in the semiconductor industry in each  of 2003 and 2004. The strength of
the semiconductor  industry is  dependent  primarily upon  the strength  of  the
computer  and  communications systems  markets as  well as  the strength  of the
worldwide economy. Although significant recovery was noted in our company's core
packaging services during the second quarter  of 2002, our test services  assets
and several non-core packaging services assets remained at low utilization rates
relative  to our  projections, and  are no  longer expected  to reach previously
anticipated utilization levels. We recognized total impairment charges of $263.4
million during the second quarter of 2002. The nature of the impairment  charges
was as follows: (1) $18.7 million impairment charge to reduce the carrying value
of the test and
                                        22
<PAGE>

packaging  assets to  be disposed  to their  fair value  less cost  to sell; (2)
$171.6 million impairment charge to reduce the carrying value of test assets and
certain non-core packaging assets that are held and used to fair value, and  (3)
$73.1  million  goodwill impairment  charge  associated with  our  test services
reporting unit.

     The first  calendar quarter  is  typically a  seasonally down  quarter  for
Amkor.  On the basis of customers'  forecasts, we currently expect packaging and
test revenue for the first quarter of 2003 to be around 10% lower than packaging
and test revenues for the fourth quarter  of 2002. We expect that first  quarter
of 2003 gross margin will be around 11%. Our profitability is dependent upon the
utilization  of our capacity, semiconductor package  mix and the average selling
price of  our  services. Because  a  substantial portion  of  our costs  at  our
factories  is fixed, relatively insignificant increases or decreases in capacity
utilization rates can have a significant effect on our profitability. Prices for
packaging and test services  and wafer fabrication  services have declined  over
time.  Historically, we have been  able to partially offset  the effect of price
declines by  successfully  developing and  marketing  new packages  with  higher
prices,  such as advanced leadframe and  laminate packages, by negotiating lower
prices with our material vendors,  and by driving engineering and  technological
changes   in  our  packaging  and  test  processes  which  resulted  in  reduced
manufacturing costs. We expect that average selling prices for our packaging and
test services  will continue  to decline  in the  future. If  our  semiconductor
package  mix does not shift to new  technologies with higher prices or we cannot
reduce the  cost of  our packaging  and test  services to  offset a  decline  in
average  selling  prices,  our  future operating  results  will  suffer. Average
selling prices for 2002  declined 16% as compared  to average selling prices  in
2001.  Average  selling prices  for  2001 declined  14%  as compared  to average
selling prices in 2000. These  declines in average selling prices  significantly
impacted our gross margins in 2002 and 2001.

OVERVIEW OF OUR HISTORICAL RESULTS

  OUR HISTORICAL RELATIONSHIP WITH ASI

     Historically  we performed packaging and test  services at our factories in
the Philippines  and  subcontracted  for additional  services  with  ASI,  which
operated  four packaging and  test facilities in Korea.  Beginning in the fourth
quarter of 1998 ASI's business was  severely affected by the economic crisis  in
Korea.  ASI was part of the Korean  financial restructuring program known as the
"Workout" program beginning in October 1998. The Workout program was the  result
of  an accord among Korean financial institutions to assist in the restructuring
of Korean business enterprises. The  process involved negotiation between  ASI's
banks  and ASI,  and did  not involve the  judicial system.  The Workout process
restructured the terms of ASI's significant bank debt. Although ASI's operations
continued  uninterrupted  during  the  process,  it  caused  concern  among  our
customers  that we could potentially lose access to ASI's services. As a result,
we decided to acquire  ASI's packaging and test  operations to ensure  continued
access  to the  manufacturing services  previously provided  by ASI.  During the
course of negotiations for  the purchase of the  packaging and test  operations,
both ASI management and the ASI bank group presented a counter-proposal whereby,
in  addition to the purchase of the packaging and test operations, we would also
make an equity  investment in ASI.  The bank group  and ASI management  proposed
this structure because they believed the equity investment would reflect a level
of  commitment from  us to continue  our ongoing business  relationship with ASI
after the sale of its packaging and test operations to Amkor.

     In May 1999, we  acquired K4, one of  ASI's packaging and test  facilities,
and  in May 2000 we acquired ASI's  remaining packaging and test facilities, K1,
K2 and K3. With the completion of our acquisition of K1, K2 and K3, we no longer
depend upon ASI for packaging or test services. In May 2000 we also committed to
a $459.0 million  equity investment  in ASI,  and fulfilled  this commitment  in
installments  taking place over the  course of 2000. In  connection with the May
2000 transactions with ASI,  we obtained independent  appraisals to support  the
value  and purchase  price of  each the  packaging and  test operations  and the
equity investment. We  invested a total  of $500.6 million  in ASI including  an
equity  investment  of $41.6  million  made in  October  1999 and,  as  a result
acquired a total of 47.7 million shares of ASI common stock.

                                        23
<PAGE>

     As part of our  strategy to sell  our investment in ASI  and to divest  our
wafer  fabrication services business,  we entered into  a series of transactions
beginning in the second half of 2002:

     - In September  2002, we  sold 20  million shares  of ASI  common stock  to
       Dongbu Group for $58.1 million in net cash proceeds and 42 billion Korean
       Won  (approximately $35.4 million at a  spot exchange rate as of December
       31, 2002) of interest  bearing notes from  Dongbu Corporation payable  in
       two  equal principal  payments in September  2003 and  February 2004. The
       Dongbu Group  comprises Dongbu  Corporation, Dongbu  Fire Insurance  Co.,
       Ltd.  and  Dongbu  Life Insurance  Co.,  Ltd.,  all of  which  are Korean
       corporations  and   are  collectively   referred  herein   as   "Dongbu."
       Additionally,  we  divested one  million shares  of  ASI common  stock in
       connection with  the payment  of certain  advisory fees  related to  this
       transaction.

     - As  of February 28, 2003, we sold our wafer fabrication services business
       to ASI for total consideration of $62 million.

     - In separate transactions designed to  facilitate a future merger  between
       ASI  and Dongbu, (i) we  acquired a 10% interest  in Acqutek from ASI for
       $1.9 million; (ii) we acquired the Precision Machine Division ("PMD")  of
       Anam  Instruments, a  related party to  Amkor, for $8  million; and (iii)
       Anam Instruments, which  had been  partially owned by  ASI, utilized  the
       proceeds  from  the  sale of  PMD  to us  to  buy  back all  of  the Anam
       Instruments shares  owned  by  ASI. Acqutek  supplies  materials  to  the
       semiconductor  industry  and  is  publicly  traded  in  Korea.  An entity
       controlled by the family of James  Kim, our Chairman and Chief  Executive
       Officer,  held a  25% ownership  interest in Acqutek  at the  time of our
       acquisition of our  interest in Acqutek.  We have historically  purchased
       and   continue  to   purchase  leadframes  from   Acqutek.  PMD  supplies
       sophisticated die mold systems and tooling to the semiconductor  industry
       and  historically over 90% of its sales were to Amkor. At the time of our
       acquisition of PMD, Anam Instruments  was owned 20% by  ASI and 20% by  a
       family member of James Kim.

     Each  of  the  transactions  with  Dongbu,  ASI  and  Anam  Instruments are
interrelated and it is possible that if each of the transactions were viewed  on
a  stand-alone basis without regard to the other transactions, we could have had
different conclusions as to fair value.

     As of February 28, 2003, we sold our wafer fabrication services business to
ASI. Additionally, we obtained  a release from  Texas Instruments regarding  our
contractual  obligations  with  respect  to  wafer  fabrication  services  to be
performed subsequent to the transfer of the business to ASI. Beginning with  the
first quarter of 2003, we will reflect our wafer fabrication services segment as
a  discontinued  operation  and restate  our  historical results.  We  no longer
benefit from the income from operations and cash flows of our wafer  fabrication
services  segment.  The historical  results  of our  wafer  fabrication services
segment are as follows:

<Table>
<Caption>
                                                         2002       2001       2000
                                                       --------   --------   --------
                                                               (IN THOUSANDS)
<S>                                                    <C>        <C>        <C>
Net revenues.........................................  $233,529   $181,188   $377,593
Gross profit.........................................    22,205     17,547     37,755
Operating income.....................................    13,526      8,465     24,275
Depreciation expense.................................     2,080      2,171      2,085
Capital expenditures.................................        --        105      1,124
Total assets.........................................   164,048     87,953     46,231
</Table>

     In connection with the  disposition of our  wafer fabrication business,  we
expect  to incur an  estimated $1 million  in severance and  other exit costs to
close our  wafer  fabrication services  operations  in Boise,  Idaho  and  Lyon,
France.  We  estimate that  in the  first quarter  of 2003  we will  recognize a
pre-tax net gain on the disposition  of our wafer fabrication services  business
approximately  $58  million.  The  carrying value  of  the  disposed  net assets
associated with  the  business  as of  February  28,  2003 was  $3  million.  In
addition,  pursuant to the definitive agreements, (1) Amkor and Dongbu agreed to
use reasonable best  efforts to cause  Dongbu Electronics and  ASI to be  merged
together as soon as practicable, (2) Amkor and Dongbu agreed to cause ASI to use
the proceeds ASI received from its sale of stock to Dongbu to purchase shares in
Dongbu

                                        24
<PAGE>

Electronics and (3) Amkor and Dongbu agreed to use their best efforts to provide
releases  and indemnifications to  the chairman, directors  and officers of ASI,
either past  or incumbent,  from any  and  all liabilities  arising out  of  the
performance  of their  duties at  ASI between January  1, 1995  and December 31,
2001. The last provision would provide  a release and indemnification for  James
Kim,  our CEO and Chairman, and  members of his family. We  are not aware of any
claims or other liabilities  which these individuals would  be released from  or
for which they would receive indemnification.

     At  January 1, 2002 Amkor owned 47.7  million shares or 42% of ASI's voting
stock. During 2002, we divested 21 million  shares of ASI stock and at  December
31,  2002 Amkor owned 26.7  million shares of ASI or  21%. The carrying value of
our remaining investment in ASI at December 31, 2002 was $77.5 million, or $2.90
per share. On  March 24, 2003,  we sold an  additional 7 million  shares of  ASI
common  stock to an investment  bank for 24.4 billion  Korean won ($19.5 million
based on the spot exchange rate  as of the transaction date) which  approximates
the  carrying  value of  those  shares. As  part of  that  sale, we  purchased a
nondeliverable call option for  $6.7 million that expires  December 2003 and  is
indexed  to ASI's share  price with a strike  price of $1.97  per share. The net
proceeds from the exercise of the option could be less than the current carrying
value and could expire unexercised losing  our entire investment in the  option.
As  of March  24, 2003, we  owned 19.7  million shares of  ASI, or  16% of ASI's
voting stock. Beginning March 24, 2003, we ceased accounting for our  investment
in  ASI under the equity  method of accounting and  commenced accounting for our
investment as a marketable security that is available for sale.

  OUR 2002 ACQUISITIONS

     In April 2002, we acquired the semiconductor packaging business of  Citizen
Watch  Co., Ltd. located in the Iwate prefecture in Japan. The business acquired
includes a manufacturing facility, over 80 employees and intellectual  property.
The  purchase price  included a  $7.8 million  cash payment  at closing.  We are
required to make additional payments one year from closing for the amount of the
deferred purchase price as well as contingent payments. Based on the  resolution
of  the contingency as of January 2003,  the total amount of additional payments
due in April 2003 is 1.7 billion  Japanese yen ($14.3 million based on the  spot
exchange  rate at  December 31, 2002).  We recorded $19.6  million of intangible
assets for patent rights that are amortizable over 7 years.

     In  January  2002,  we  acquired  Agilent  Technologies,  Inc.'s  packaging
business related to semiconductor packages utilized in printers for $2.8 million
in  cash.  The  acquired  tangible  assets  were  integrated  into  our existing
manufacturing facilities. The  purchase price was  principally allocated to  the
tangible  assets. Our results  of operations were  not significantly impacted by
this acquisition.

     In October 2002, we terminated negotiations with Fujitsu Limited to acquire
Fujitsu's packaging and test operation in Kagoshima, Japan pursuant to the April
2002 memorandum of understanding between our company and Fujitsu.

  OUR VENTURE WITH TOSHIBA CORPORATION

     As of January 1,  2001, Amkor Iwate  Corporation commenced operations  with
the acquisition of a packaging and test facility at a Toshiba factory located in
the  Iwate prefecture in Japan. We currently  own 60% of Amkor Iwate and Toshiba
owns the balance of the outstanding shares.  By January 2004 we are required  to
purchase  the  remaining  40% of  the  outstanding  shares of  Amkor  Iwate from
Toshiba. The share purchase price will be determined based on the performance of
the venture  during the  three-year period  but cannot  be less  than 1  billion
Japanese  yen and cannot  exceed 4 billion  Japanese yen ($8.4  million to $33.7
million based  on the  spot exchange  rate at  December 31,  2002). Amkor  Iwate
provides  packaging  and test  services principally  to Toshiba's  Iwate factory
under a long-term supply agreement that provides for services to be performed on
a cost plus  basis during  the term  of the  joint venture  and subsequently  at
market based rates. The supply agreement with Toshiba's Iwate factory terminates
two years subsequent to our acquisition of Toshiba's ownership interest in Amkor
Iwate.

                                        25
<PAGE>

  OUR ACQUISITIONS OF TAIWAN SEMICONDUCTOR TECHNOLOGY CORPORATION AND SAMPO
  SEMICONDUCTOR CORPORATION

     In July 2001, we acquired,  in separate transactions, Taiwan  Semiconductor
Technology  Corporation ("TSTC") and Sampo  Semiconductor Corporation ("SSC") in
Taiwan. The  results of  TSTC and  SSC have  been included  in the  accompanying
consolidated  financial statements since  the acquisition dates.  Our results of
operations were not significantly impacted by these acquisitions. In  connection
with  earn-out provisions that  provided for additional  purchase price based in
part on the  results of the  acquisitions, we issued  an additional 1.8  million
shares in January 2002 and recorded an additional $35.2 million in goodwill.

RESULTS OF OPERATIONS

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

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2002     2001     2000
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Net revenues................................................  100.0%   100.0%   100.0%
Gross profit................................................    7.2      4.6     25.3
Operating income (loss).....................................  (24.6)   (17.7)    13.5
Income (loss) before income taxes, equity in income (loss)
  of investees and minority interest........................  (33.6)   (28.3)     8.3
Net income (loss)...........................................  (50.4)   (29.7)     6.5
</Table>

  YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

     Net Revenues.  Net revenues increased $121.8 million, or 8.0%, to  $1,639.7
million  in 2002 from $1,517.9 million in  2001. Packaging and test net revenues
increased 5.2% to $1,406.2 million in 2002 from $1,336.7 million in 2001.  Wafer
fabrication  net revenues increased 28.9% to  $233.5 million in 2002 from $181.2
million in 2001.

     The increase in  packaging and test  net revenues for  2002, excluding  the
impact  of  our  acquisitions and  expansion  in  Japan, Taiwan  and  China, was
principally attributed to an  overall unit volumes increase  of 19.7% which  was
driven  by a  42.0% increase for  advanced packages  and a 1.2%  increase in our
traditional packages. Partially offsetting the volume increases, average selling
prices for 2002 declined 16% as compared to average selling prices in 2001.  The
revenues  of our  Japanese acquisition, Amkor  Iwate, declined  $12.4 million in
2002 compared  to 2001.  Our acquisitions  in Taiwan  and expansion  into  China
contributed $54.6 million to the increase in net revenues for 2002.

     Prices  for packaging and test services and wafer fabrication services have
declined over time.  Historically, we  have been  able to  partially offset  the
effect  of price declines by successfully  developing and marketing new packages
with higher  prices,  such  as  advanced leadframe  and  laminate  packages,  by
negotiating  lower prices with our material  vendors, and by driving engineering
and technological changes in our packaging and test processes which resulted  in
reduced  manufacturing costs. During 2002, the decline in average selling prices
significantly impacted our gross margins as compared to the comparable period  a
year ago.

     The  increase in wafer fabrication net revenues was primarily attributed to
a 50.7% increase in  sales to Texas  Instruments in 2002  as compared with  2001
partially  offset by a 55.1% decrease in demand from our other wafer fabrication
services customers. We derived 92.8% and 79.4% of our wafer fabrication revenues
from Texas Instruments for 2002 and 2001, respectively. On February 28, 2003, we
sold our wafer fabrication services business to ASI. Additionally, we obtained a
release from  Texas  Instruments  regarding  our  contractual  obligations  with
respect to wafer fabrication services to be performed subsequent to the transfer
of  the  business to  ASI. Beginning  with the  first quarter  of 2003,  we will
reflect our wafer fabrication services  segment as a discontinued operation  and
restate our historical results.

                                        26
<PAGE>

     Gross  Profit (Loss).   Gross profit increased $48.0  million, or 68.8%, to
$117.8 million in 2002 from $69.8 million in 2001. Our cost of revenues consists
principally of costs of materials, labor and depreciation. Because a substantial
portion of  our  costs  at  our factories  is  fixed,  relatively  insignificant
increases  or decreases  in capacity  utilization rates  can have  a significant
effect on our gross margin. As a  result of acquisitions in Japan and Taiwan  in
2001  as well  as other  geographic expansions,  we substantially  increased our
fixed costs.

     Gross margins  as a  percentage of  net revenues  increased 2.6  percentage
points  to 7.2% in 2002 as  compared to 4.6% in 2001  principally as a result of
the following:

     - Increased capacity utilization as a  result of increased unit volumes  at
       our  factories in Korea  and the Philippines together  with the impact of
       our cost savings initiatives at  those factories caused an approximate  7
       percentage point increase in gross margins.

     - Material  cost savings  contributed approximately 4  percentage points to
       the increase in gross margins.

     - Reduced depreciation expense of approximately $42 million as a result  of
       the  impact of the fixed asset impairment  charge recorded as of June 30,
       2002 caused  an  approximate  2%  percentage  points  increase  in  gross
       margins.  A  discussion  of  the  second  quarter  impairment  charge  is
       presented within the discussion of special charges below.

     - Reduced depreciation expense of approximately $17 million as a result  of
       the  impact of the change in  estimated useful lives of certain packaging
       equipment beginning with the fourth quarter of 2002 caused an approximate
       1% percentage point increase in gross margins. A discussion of the change
       in estimated useful lives is set forth below.

     The positive impacts on gross margins were partially offset by:

     - Average  selling  price  erosion  across  our  product  lines  caused  an
       estimated 10 percentage points decline in gross margins.

     - Our   acquisitions  in  Taiwan  and   expansion  into  China  contributed
       approximately 1.4 percentage points to the  decline in gross margin as  a
       result  of the costs associated with ramping and reconfiguring operations
       at these facilities.

     Depreciation accounting  requires estimation  of the  useful lives  of  the
assets  to be depreciated  as well as  adoption of a  method of depreciation. We
calculate depreciation using the straight-line method over the estimated  useful
lives of the depreciable assets. We have historically estimated the useful lives
of  our machinery and equipment to be  three to five years, with the substantial
majority of our packaging  assets having estimated useful  lives of four  years.
Effective with the fourth quarter of 2002, we changed the estimated useful lives
of  certain  of our  packaging  equipment from  four  years to  seven  years for
depreciation purposes, which is in line with our historical usage and consistent
with other companies in our industry. We did not extend the useful lives of  the
packaging  equipment associated with the  second quarter impairment charge based
on our expected use of that equipment and the associated cash flows. This change
decreased our net loss by approximately $16.7 million, or $0.10 per share. There
was no offsetting impact to  our tax provision related  to the change in  useful
lives  because of our consolidated net losses  for 2002 and our recognition of a
valuation allowance against the associated net operating loss carryforwards.

     Selling,  General  and  Administrative  Expenses.    Selling,  general  and
administrative  expenses decreased $11.6 million, or 5.8%, to $188.6 million, or
11.5% of net revenues, in 2002 from $200.2 million, or 13.2% of net revenues, in
2001. The decrease  in these costs  was largely attributed  to $12.6 million  in
cost  reductions principally related  to our U.S.  based administrative overhead
cost reduction  initiatives;  partially offset  by  $0.9 million  for  increased
administrative  costs  related  to  our  factories.  Our  factory administrative
expenses increased overall as a result of our 2002 and 2001 acquisitions  offset
by factory cost reduction initiatives.

     Research and Development.  Research and development expenses decreased $7.6
million  to $31.2 million, or 1.9% of  net revenues, in 2002 from $38.8 million,
or 2.6% of net revenues, in  2001. Our research and development efforts  support
our  customers'  needs  for  smaller packages  and  increased  functionality. We
continue to  invest  our  research  and development  resources  to  further  the
development of flip chip

                                        27
<PAGE>

interconnection  solutions, chip scale packages that  are nearly the size of the
semiconductor die,  micro-electromechanical system  ("MEMS") devices  used in  a
variety   of  end   markets  including   automotive,  industrial   and  personal
entertainment,  our  stacked  chip  packages   that  stack  as  many  as   three
semiconductor  dies in a single  package, and System-in-Package technology, that
uses both advanced packaging and traditional surface mount techniques to  enable
the combination of technologies in a single chip.

     Amortization  of Goodwill and Other Acquired Intangibles.  As of January 1,
2002, we adopted Statement  of Financial Accounting  Standard No. 142,  Goodwill
and  Other Intangible Assets. We reclassified $30.0 million of intangible assets
previously  identified  as  an  assembled  workforce  intangible  to   goodwill.
Additionally, we stopped amortizing goodwill of $659.1 million. The cessation of
amortization  reduced amortization expense by $80.2 million for 2002 as compared
with 2001.

     Special Charges.    During 2002,  we  recorded $292.0  million  of  special
charges. Special charges, in thousands, were comprised of:

<Table>
<S>                                                           <C>
Impairment of long-lived assets.............................  $190,266
Impairment of goodwill......................................    73,080
Lease termination and other exit costs......................    28,624
                                                              --------
                                                              $291,970
                                                              ========
</Table>

     Although  significant recovery  was noted  in our  company's core packaging
services during the second quarter of 2002, our test services assets and several
non-core packaging services assets remained at low utilization rates relative to
our projections,  and are  no longer  expected to  reach previously  anticipated
utilization  levels.  In  addition,  during  the  second  quarter  of  2002,  we
experienced a significant  decline in  our market  capitalization. These  events
triggered  an impairment  review in  accordance with  SFAS No.  144. This review
included a company-wide evaluation  of underutilized assets  that could be  sold
and a detailed update of our operating and cash flow projections. As a result of
this analysis, we identified $19.8 million of test and packaging fixed assets to
be  disposed. We  recognized an  $18.7 million  impairment charge  to reduce the
carrying value of the test  and packaging fixed assets  to be disposed to  their
fair  value less  cost to  sell. Fair  value of  the assets  to be  disposed was
determined with the assistance of an appraisal firm and available information on
the resale value of  the equipment. Additionally, we  tested for impairment  our
long-lived  test assets that are held and used, including intangible assets that
we are amortizing, and certain non-core packaging fixed assets that are held and
used. For the test and packaging assets that are held and used, we recognized  a
$171.6 million impairment charge to reduce the carrying value of those assets to
fair  value. An appraisal firm was engaged to assist in the determination of the
fair value of the assets held for use. The determination of fair value was based
on projected  cash  flows using  a  discount  rate commensurate  with  the  risk
involved.

     SFAS  No. 142  provides that  goodwill of  a reporting  unit be  tested for
impairment on an annual basis and between annual tests in certain  circumstances
including  a significant adverse change in  the business climate and testing for
recoverability of  long-lived  assets.  Accordingly, we  retested  goodwill  for
impairment  as of June  30, 2002, and  concluded that the  carrying value of the
assets and liabilities associated with the test services reporting unit exceeded
its fair value.  As of June  30, 2002,  we recognized a  $73.1 million  goodwill
impairment  charge. Such impairment charge was measured by comparing the implied
fair value of the goodwill associated  with the test services reporting unit  to
its carrying value. An appraisal firm was engaged to assist in the determination
of  the fair value of  our reporting units. The  determination of fair value was
based on projected cash flows using  a discount rate commensurate with the  risk
involved.

     During   2002,  we  recorded  $28.6  million  of  charges  related  to  the
consolidation of our worldwide facilities to increase operational efficiency and
reduce costs. The charges were comprised of $20.8 million to write-off leasehold
improvements and other long-lived assets and $7.8 million for lease  termination
and other exit costs. Our consolidation efforts included:

     - Transferring  the packaging operations  at our K2  site in Bucheon, South
       Korea into our  K4 factory  in Kwangju, South  Korea and  closing the  K2
       facility;

                                        28
<PAGE>

     - Merging our factory operations in Taiwan into a single location; and

     - Consolidating  select U.S. office locations and closing our San Jose test
       facility.

     The charges associated with the consolidation initiatives in Korea,  Taiwan
and  the U.S. were $10.0 million,  $13.8 million and $4.8 million, respectively.
We expect to complete the closing of  the K2 facility during the second  quarter
of  2003 and the  other activities were substantially  completed during 2002. We
have undertaken, and may continue to undertake, a variety of measures to  reduce
our  operating  costs  including  consolidating  packaging  lines,  reducing our
worldwide headcount, reducing  compensation levels,  shortening work  schedules,
improving factory efficiencies, negotiating cost reductions with our vendors and
closing non-critical manufacturing facilities.

     Other  (Income) Expense.   Other expenses, net  decreased $13.9 million, to
$147.4 million, or 9.0% of net revenues,  in 2002 from $161.3 million, or  10.6%
of  net revenues, in  2001. The net  decrease in other  expenses was primarily a
result of a decrease in interest expense of $16.6 million. Net interest  expense
in  2001  included $13.4  million of  unamortized  deferred debt  issuance costs
expensed in connection with the repayment in February, May and November 2001  of
term  loans outstanding under our secured bank facility and the reduction of the
revolving line of credit commitment.

     Provision (Benefit) for Income  Taxes.  During 2002,  we recorded a  $138.2
million  charge  to establish  a valuation  allowance  against our  deferred tax
assets  consisting  primarily   of  U.S.  and   Taiwanese  net  operating   loss
carryforwards  and tax credits. In connection with our divestiture in 2002 of 21
million shares of ASI common stock, we realized a capital loss of  approximately
$117.0  million and recognized a U.S. tax  benefit of $44.5 million for which we
provided a  full valuation  allowance because  we did  not have  any  offsetting
capital  gains. The total change in the valuation allowance against our deferred
tax assets was $182.7 million in 2002. Generally accepted accounting  principles
require  companies to weigh  both positive and  negative evidence in determining
the need for a valuation  allowance. In light of  our three years of  cumulative
losses,  an  unprecedented industry  downturn and  continued poor  visibility of
customer demand, we determined in the fourth quarter that a valuation  allowance
representing substantially all of our deferred tax assets was appropriate. These
negative  factors outweighed our forecasted future profitability and expectation
that we will be able  to utilize our net  operating loss carryforwards. We  will
resume  the recognition of deferred tax  assets when we return to profitability.
Additionally, until we utilize our net operating loss carryforwards, the  income
tax  provision will reflect modest levels of foreign taxation. In December 2002,
we utilized $33.3  million of U.S.  net operating losses  by carrying back  such
amounts  to offset U.S. reported taxable income  in prior years. At December 31,
2002, our  company has  remaining  U.S. net  operating  losses available  to  be
carried  forward  totaling  $375.5  million  expiring  between  2021  and  2022.
Additionally, at  December 31,  2002,  our company  had non-U.S.  net  operating
losses  available to be carried forward  totaling $61.2 million expiring between
2003 and 2012.

     Equity in Loss of Investees.  Our earnings included our share of losses  in
our  equity affiliates,  principally ASI, in  2002 of $33.9  million compared to
$100.7 million  ($65.2  million  excluding the  amortization  of  equity  method
goodwill)  in 2001.  As of  January 1, 2002,  we adopted  Statement of Financial
Accounting Standard No. 142,  Goodwill and Other  Intangible Assets. We  stopped
amortizing  equity  method  goodwill  of  $118.6  million  associated  with  our
investment in  ASI. The  cessation of  amortization reduced  equity in  loss  of
investees by $35.5 million for 2002 as compared with the corresponding period.

     During  2002,  we recorded  impairment charges  totaling $172.5  million to
reduce the  carrying value  of our  investment  in ASI  to ASI's  market  value.
Additionally  during 2002, we recorded a loss of $1.8 million on the disposition
of a portion of our  interest in ASI to Dongbu.  With Dongbu's purchase of  12.0
million  newly issued  shares of  ASI together with  its purchase  of 20 million
shares from our company and our disposition of an additional 1 million shares of
ASI stock  as  payment  of  transaction  costs  to  our  financial  advisors  in
connection  with the transaction with Dongbu,  our ownership interest in ASI was
reduced to approximately 21%.

                                        29
<PAGE>

  YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

     Net Revenues.  Net revenues decreased $869.4 million, or 36.4%, to $1,517.9
million in 2001 from $2,387.3 million  in 2000. Packaging and test net  revenues
decreased 33.5% to $1,336.7 million in 2001 from $2,009.7 million in 2000. Wafer
fabrication  net revenues decreased 52.0% to  $181.2 million in 2001 from $377.6
million in 2000.

     The decrease in packaging  and test net revenues,  excluding the impact  of
acquisitions,  was primarily  attributable to a  37.3% decrease  in overall unit
volumes in 2001 compared to 2000.  This overall unit volume decrease was  driven
by a 34.6% unit volume decrease for advanced leadframe and laminate packages and
a  39.4% decrease in our  traditional leadframe business as  a result of a broad
based decrease in demand for  semiconductors. Average selling prices across  all
product  lines  eroded by  approximately  13.9% for  2001  as compared  to 2000.
Partially offsetting the decrease  in overall unit  volumes and average  selling
price  erosion was  the benefit  of $231.0  million in  net revenues  related to
acquisitions which were completed since January 1, 2001.

     The decrease in wafer fabrication net revenues was primarily attributed  to
a  52.8% decrease in sales  to Texas Instruments in  2001 as compared with 2000.
Texas Instruments'  demand  for  our  services  declined  as  a  result  of  the
utilization  of excess inventory supply  and a decline in  end market demand for
cellular phones.

     Gross Profit.  Gross  profit decreased $535.3 million,  or 88.5%, to  $69.8
million  in 2001 from $605.1 in 2000.  Our cost of revenues consists principally
of costs of materials, labor and depreciation. Because a substantial portion  of
our  costs  at our  factories is  fixed, significant  increases or  decreases in
capacity utilization rates have a significant  effect on our gross profit. As  a
result of our May 2000 acquisition of K1, K2 and K3 and our 2001 acquisitions in
Japan and Taiwan, we substantially increased our fixed costs.

     Gross  margins as a percentage  of net revenues decreased  81.8% to 4.6% of
net revenues in 2001 as compared to 25.3% of net revenues in 2000 principally as
a result the following:

     - Decreasing unit  volumes  in 2001  at  our  factories in  Korea  and  the
       Philippines  that caused an approximate 41% decline in gross margins as a
       result of  the  factories'  substantial  fixed  and  labor  costs  to  be
       distributed over a smaller revenue base. This decline in gross margins is
       net of the benefit of our 2001 cost reduction initiatives to reduce labor
       and other factory overhead costs.

     - Average  selling  price  erosion  across  our  product  lines  caused  an
       estimated 39% decline in gross margins.

     - Our acquisitions in 2001 contributed approximately 10% to the decline  in
       gross  margin.  This is  principally attributed  to the  long-term supply
       agreement between Amkor Iwate and  Toshiba, which provides for  packaging
       and  test services to be performed on  a cost plus basis which produces a
       resulting gross margin less than our historical margins in 2000.

     - The negative  impacts  on gross  margins  were partially  offset  by  the
       benefit  of stable  gross margins with  respect to  our wafer fabrication
       services as compared to 2000.

     As a result of the decline in the semiconductor industry and the reductions
of our  customers' forecasted  demand,  our provision  for excess  and  obsolete
inventory  increased $7.9 million to a total  provision of $17.9 million in 2001
as  compared  to  $10.0  million  in   2000.  During  2001,  we  wrote-off   and
contemporaneously  disposed of $10.6  million of inventory.  In general we order
raw materials based on the customers'  forecasted demand and we do not  maintain
any   finished  goods  inventory.  If  our  customers  change  their  forecasted
requirements and we  are unable  to cancel  our raw  materials order  or if  our
vendors  require  that we  order  a minimum  quantity  that exceeds  the current
forecasted demand, we will experience a  build-up in raw material inventory.  We
will  either seek  to recover the  cost of  the materials from  our customers or
utilize the  inventory in  production.  However, we  may  not be  successful  in
recovering  the cost from  our customers or  being able to  use the inventory in
production, which we would consider as part of our reserve estimate. Our reserve
for excess and obsolete inventory is based on forecasted demand we receive  from
our  customers. When  a determination  is made  that the  inventory will  not be
utilized in production it is written-off and disposed.

                                        30
<PAGE>

     Selling,  General  and  Administrative  Expenses.    Selling,  general  and
administrative  expenses increased $7.6 million, or  3.9%, to $200.2 million, or
13.2% of net revenues, in 2001 from $192.6 million, or 8.1% of net revenues,  in
2000. The increase in these costs was due to:

     - Increased costs of $16.0 million related to the acquisitions in Japan and
       Taiwan,  the  commencement  of  operations  in  China  and  the increased
       staffing of our Japanese sales force;

     - An overall decrease  of $6.6 million  in our factories  in Korea and  the
       Philippines  as a result  of our cost reduction  initiatives in the first
       and second quarters of 2001 that  were partially offset by the  increased
       selling,  general and administrative costs  assumed in connection our May
       2000 acquisition of K1, K2 and K3; and

     - Decreased costs  of  $1.8  million principally  related  our  U.S.  based
       administrative  overhead  cost  reduction initiatives  in  the  first and
       second quarters of 2001.

     Research and  Development.   Research  and development  expenses  increased
$12.7  million to  $38.8 million, or  2.6% of  net revenues, in  2001 from $26.1
million, or 1.1% of  net revenues, in 2000.  Increased research and  development
expenses  resulted from the  acquisition of the packaging  and test research and
development group  within ASI  related to  the K1,  K2 and  K3 transaction.  Our
research  and  development  efforts  support our  customers'  needs  for smaller
packages and increased  functionality. We  continue to invest  our research  and
development   resources   to  continue   the  development   of  our   Flip  Chip
interconnection solutions,  our  System-in-Package technology,  that  uses  both
advanced  packaging  and  traditional  surface mount  techniques  to  enable the
combination of technologies  in a single  package, and our  Chip Scale  packages
that are nearly the size of the semiconductor die.

     Amortization  of Goodwill and Other  Acquired Intangibles.  Amortization of
goodwill and other acquired intangibles increased $21.9 million to $85.0 million
from $63.1 million in 2000 principally as  a result of our May 2000  acquisition
of  K1, K2 and K3 and  to a lesser extent our  January 2001 acquisition of Amkor
Iwate.

     Loss on  Disposal  of Fixed  Assets.   Loss  on  disposal of  fixed  assets
increased  $13.1 million to $14.5 million  from $1.4 million in 2000 principally
as a  result  of  the  disposition  of  production  equipment  and  construction
materials in Korea.

     Other  (Income) Expense.   Other expenses, net  increased $36.8 million, to
$161.3 million, or 10.6% of net revenues,  in 2001 from $124.5 million, or  5.2%
of  net revenues, in  2000. The net  increase in other  expenses was primarily a
result of a  net increase in  interest expense of  $44.3 million. The  increased
interest expense resulted from the financing related to our May 2000 acquisition
of  K1, K2 and K3  and our investment in ASI  and our 2001 financing activities.
Net interest  expense  for  2001  also included  $13.4  million  of  unamortized
deferred  debt  issuance  costs expensed  in  connection with  the  repayment in
February, May and November 2001 of term loans outstanding under our secured bank
facility and the  reduction of the  revolving line of  credit commitment.  Other
expenses  were  favorably impacted  by a  change in  foreign currency  gains and
losses of $3.9 million for 2001 as compared with the corresponding period in the
prior year.

     Provision (Benefit) for Income Taxes.   Our effective tax rate in 2001  and
2000  was (19.0%) and 11.3%, respectively. The  change in the effective tax rate
in 2001 was  due to  operating losses  in jurisdictions  for which  there is  no
offsetting  tax  benefit  from  tax  holidays as  well  as  operating  losses in
jurisdictions with higher corporate income tax  rates. The tax returns for  open
years  are subject  to changes  upon final  examination. Changes  in the  mix of
income from our foreign subsidiaries, expiration of tax holidays and changes  in
tax laws and regulations could result in increased effective tax rates for us in
the future.

     Equity  in Loss of Investees.  Our earnings included our share of losses in
our equity affiliates, principally ASI, in 2001 of $65.2 million compared to our
share of their income in  2000 of $3.9 million.  Our earnings also included  the
amortization  of the excess of the cost of  our investment above of our share of
the underlying net assets of $35.5 million  and $24.9 million in 2001 and  2000,
respectively. Our investment in ASI increased to 42% as of October 2000 from 40%
as of September 2000, 38% as of May 2000 and 18% as of October 1999.

                                        31
<PAGE>

QUARTERLY RESULTS

     The  following table sets forth  our unaudited consolidated financial data,
including as  a  percentage of  our  net revenues,  for  the last  eight  fiscal
quarters  ended December 31, 2002. Our results of operations have varied and may
continue to vary from quarter to  quarter and are not necessarily indicative  of
the  results of  any future period.  The results of  the semiconductor packaging
businesses acquired  from  Citizen Watch  Co.,  Ltd. and  Agilent  Technologies,
Inc.'s  in 2002 are included in the consolidated financial data from the date of
the  acquisitions.  The  results  of  the  2001  acquisitions  of  Amkor   Iwate
Corporation,  Sampo Semiconductor  Corporation and  the consolidated  results of
Taiwan Semiconductor  Technology Corporation  (a  prior equity  investment)  are
included in the consolidated financial data from the date of the acquisitions.

     We  believe that we have included in the amounts stated below all necessary
adjustments, consisting  only  of  normal  recurring  adjustments,  for  a  fair
presentation  of  our  selected quarterly  data.  You should  read  our selected
quarterly data in conjunction with our consolidated financial statements and the
related notes, included elsewhere in this annual report.

     Our net revenues, gross profit and operating income 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  U.S. and Asia.
Semiconductor companies in the U.S. generally reduce their production during the
holidays at  the end  of December  which results  in a  significant decrease  in
orders for packaging and test services during the first two weeks of January. In
addition,  we typically close  our factories in the  Philippines for holidays in
January, and we close our factories in Korea for holidays in February.

     The calculation of basic and diluted  net income (loss) per share for  each
quarter   is  based  on   the  average  shares   outstanding  for  that  period;
consequently, the sum of the quarters may  not necessarily be equal to the  full
year basic and diluted net income (loss) per share.

<Table>
<Caption>
                                                                 QUARTER ENDED
                         ---------------------------------------------------------------------------------------------
                         DEC. 31,    SEPT. 30,   JUNE 30,    MARCH 31,   DEC. 31,    SEPT. 30,   JUNE 30,    MARCH 31,
                           2002        2002        2002        2002        2001        2001        2001        2001
                         ---------   ---------   ---------   ---------   ---------   ---------   ---------   ---------
                                                     (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                      <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Net revenues...........  $ 426,254   $453,928    $ 409,884   $ 349,641   $ 352,354   $ 334,716   $ 350,169   $480,623
Cost of revenues --
  including purchases
  from ASI.............    359,717    401,555      397,503     363,112     360,713     346,355     342,158    398,838
                         ---------   --------    ---------   ---------   ---------   ---------   ---------   --------
    Gross profit
      (loss)...........     66,537     52,373       12,381     (13,471)     (8,359)    (11,639)      8,011     81,785
                         ---------   --------    ---------   ---------   ---------   ---------   ---------   --------
Operating expenses:
  Selling, general and
    administrative.....     44,170     47,103       49,607      47,687      47,012      47,847      51,365     53,994
  Research and
    development........      6,654      7,622        8,769       8,144      10,365       9,784       8,135     10,502
  Loss (gain) on
    disposal of assets,
    net................       (416)      (200)       1,438       1,674       9,861       3,132         398      1,124
  Amortization of
    goodwill and other
    acquired
    intangibles........      1,997      2,000        1,743       1,252      21,263      21,214      20,573     21,912
  Special charges......      9,985     13,819      268,166          --          --          --          --         --
                         ---------   --------    ---------   ---------   ---------   ---------   ---------   --------
    Total operating
      expenses.........     62,390     70,344      329,723      58,757      88,501      81,977      80,471     87,532
                         ---------   --------    ---------   ---------   ---------   ---------   ---------   --------
Operating income
  (loss)...............      4,147    (17,971)    (317,342)    (72,228)    (96,860)    (93,616)    (72,460)    (5,747)
Other expense, net.....     34,547     37,569       37,647      37,690      41,087      35,320      42,331     42,529
                         ---------   --------    ---------   ---------   ---------   ---------   ---------   --------
</Table>

                                        32
<PAGE>

<Table>
<Caption>
                                                                 QUARTER ENDED
                         ---------------------------------------------------------------------------------------------
                         DEC. 31,    SEPT. 30,   JUNE 30,    MARCH 31,   DEC. 31,    SEPT. 30,   JUNE 30,    MARCH 31,
                           2002        2002        2002        2002        2001        2001        2001        2001
                         ---------   ---------   ---------   ---------   ---------   ---------   ---------   ---------
                                                     (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                      <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Loss before income
  taxes, equity in loss
  of investees and
  minority interest....    (30,400)   (55,540)    (354,989)   (109,918)   (137,947)   (128,936)   (114,791)   (48,276)
Provision (benefit) for
  income taxes.........    123,897    (10,109)     (25,440)    (22,533)    (26,210)    (24,498)    (25,673)    (5,310)
Equity in loss of
  investees............     (9,128)   (12,532)     (10,111)     (2,094)    (24,452)    (23,661)    (26,345)   (26,248)
Loss on impairment of
  equity investment....    (32,997)        --      (42,960)    (96,576)         --          --          --         --
Loss on disposition of
  equity investment....         --     (1,767)          --          --          --          --          --         --
Minority interest......        306        423         (908)     (1,753)       (423)       (645)       (828)        --
                         ---------   --------    ---------   ---------   ---------   ---------   ---------   --------
Net loss...............  $(196,116)  $(59,307)   $(383,528)  $(187,808)  $(136,612)  $(128,744)  $(116,291)  $(69,214)
                         =========   ========    =========   =========   =========   =========   =========   ========
Basic net loss per
  common share.........  $   (1.19)  $  (0.36)   $   (2.33)  $   (1.15)  $   (0.85)  $   (0.80)  $   (0.76)  $  (0.45)
                         =========   ========    =========   =========   =========   =========   =========   ========
Diluted net loss per
  common share.........  $   (1.19)  $  (0.36)   $   (2.33)  $   (1.15)  $   (0.85)  $   (0.80)  $   (0.76)  $  (0.45)
                         =========   ========    =========   =========   =========   =========   =========   ========
</Table>

<Table>
<Caption>
                                                                           QUARTER ENDED
                                     -----------------------------------------------------------------------------------------
                                     DEC. 31,   SEPT. 30,   JUNE 30,   MARCH 31,   DEC. 31,   SEPT. 30,   JUNE 30,   MARCH 31,
                                       2002       2002        2002       2002        2001       2001        2001       2001
                                     --------   ---------   --------   ---------   --------   ---------   --------   ---------
<S>                                  <C>        <C>         <C>        <C>         <C>        <C>         <C>        <C>
Net revenues.......................  100.0%      100.0%     100.0%      100.0%     100.0%      100.0%     100.0%      100.0%
Cost of revenues -- including
  purchases from ASI...............    84.4        88.5       97.0       103.9      102.4       103.5       97.7        83.0
                                      -----       -----      -----       -----      -----       -----      -----       -----
    Gross profit (loss)............    15.6        11.5        3.0        (3.9)      (2.4)       (3.5)       2.3        17.0
                                      -----       -----      -----       -----      -----       -----      -----       -----
Operating expenses:
  Selling, general and
    administrative.................    10.4        10.4       12.1        13.6       13.3        14.3       14.7        11.2
  Research and development.........     1.6         1.7        2.1         2.3        2.9         2.9        2.3         2.2
  Loss (gain) on disposal of
    assets, net....................    (0.1)         --        0.4         0.5        2.8         0.9        0.1         0.2
  Amortization of goodwill and
    other acquired intangibles.....     0.5         0.4        0.4         0.4        6.1         6.4        5.9         4.6
  Special charges..................     2.2         3.0       65.4          --         --          --         --          --
                                      -----       -----      -----       -----      -----       -----      -----       -----
      Total operating expenses.....    14.6        15.5       80.4        16.8       25.1        24.5       23.0        18.2
                                      -----       -----      -----       -----      -----       -----      -----       -----
Operating income (loss)............     1.0        (4.0)     (77.4)      (20.7)     (27.5)      (28.0)     (20.7)       (1.2)
Other expense, net.................     8.1         8.2        9.2        10.7       11.6        10.5       12.1         8.8
                                      -----       -----      -----       -----      -----       -----      -----       -----
Loss before income taxes, equity in
  loss of investees and minority
  interest.........................    (7.1)      (12.2)     (86.6)      (31.4)     (39.1)      (38.5)     (32.8)      (10.0)
Provision (benefit) for income
  taxes............................    29.1        (2.2)      (6.2)       (6.5)      (7.5)       (7.3)      (7.4)       (1.1)
Equity in loss of investees........    (2.2)       (2.8)      (2.5)       (0.6)      (7.0)       (7.1)      (7.5)       (5.5)
Loss on impairment of equity
  investment.......................    (7.7)         --         --          --         --          --         --          --
Loss on disposition of equity
  investment.......................      --        (0.4)     (10.5)      (27.7)        --          --         --          --
Minority interest..................     0.1         0.1       (0.2)       (0.5)      (0.2)       (0.2)      (0.3)         --
                                      -----       -----      -----       -----      -----       -----      -----       -----
Net loss...........................   (46.0)%     (13.1)%    (93.6)%     (53.7)%    (38.8)%     (38.5)%    (33.2)%     (14.4)%
                                      =====       =====      =====       =====      =====       =====      =====       =====
</Table>

                                        33
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     Semiconductor industry analysts have  forecasted significant growth in  the
semiconductor industry in 2003 and 2004. The first calendar quarter is typically
a  seasonally down quarter for  Amkor. On the basis  of customers' forecasts, we
currently expect packaging and test revenue for the first quarter of 2003 to  be
around  10% lower  than packaging  and test revenues  for the  fourth quarter of
2002. We expect that first quarter of 2003 gross margin be around 11%.

     Net  cash  provided  by  (used  in)  operating,  investing  and   financing
activities  for the last eight  fiscal quarters ended December  31, 2002 were as
follows:

<Table>
<Caption>
                                                             QUARTER ENDED
                       ------------------------------------------------------------------------------------------
                       DEC. 31,   SEPT. 30,   JUNE 30,   MARCH 31,   DEC. 31,    SEPT. 30,   JUNE 30,   MARCH 31,
                         2002       2002        2002       2002        2001        2001        2001       2001
                       --------   ---------   --------   ---------   ---------   ---------   --------   ---------
                                                             (IN THOUSANDS)
<S>                    <C>        <C>         <C>        <C>         <C>         <C>         <C>        <C>
Operating
  activities.........  $ 93,165   $ 65,389    $ 26,714   $ (8,791)   $  10,051   $ 16,207    $ 61,031   $ 73,177
Investing
  activities.........   (19,798)    26,242     (38,672)   (22,337)     (23,059)   (25,786)    (40,782)   (78,588)
Financing
  activities.........     2,416    (16,977)     (2,061)     4,569     (115,036)    (1,467)    111,284    119,905
</Table>

     The significant improvement in our operating cash flows during 2002 was  as
a  result of increase in demand for our services, the effect of our cost savings
initiatives and favorable impact to working capital of $45.4 million principally
related to processing fees payable to  ASI under the foundry agreement which  we
retained in anticipation of completing the sale of our wafer foundry business to
ASI.  Our cash and cash  equivalents balance as of  December 31, 2002 was $311.2
million, and  we  have  up to  $89  million  available under  our  $100  million
revolving  line  of  credit which  is  subject  to borrowing  base  of qualified
receivables. Our ongoing primary  cash needs are  for debt service,  principally
interest, equipment purchases, and working capital. Additionally, we may require
cash  to consummate business combinations to diversify our geographic operations
and expand our customer base.

     In June 2002 and September 2002 we amended our existing bank debt covenants
to provide further flexibility with respect to capital expenditures,  investment
restrictions and other financial covenants measured in part by our liquidity and
earnings. As part of the September 2002 amendment, lenders under our bank credit
facility  agreed  to extend  the existing  financial covenant  framework through
December 31, 2003. Our  secured debt encompasses a  $97.1 million term loan  and
the  unused revolving  line of  credit. The  term loan  maintained its scheduled
amortization of approximately $0.25 million  per quarter through September  2003
and  then $12 million  per quarter beginning in  December 2003 through September
2005. The bank credit facility will revert to its original covenant structure in
January 2004. Additionally,  the reduced levels  of our operating  cash flow  in
2001 required us to renegotiate our bank debt covenants in March 2001, June 2001
and  September  2001.  In  connection with  the  September  2001  amendment, our
revolving line of  credit was  reduced from a  $200 million  commitment to  $100
million,  the interest rate on the Term B loans was increased from LIBOR plus 3%
to LIBOR plus 4%, and  we prepaid $125 million of  the Term B loans in  November
2001  from cash on hand.  In general, covenants in  the agreements governing our
existing debt, and debt we may incur in the future, may materially restrict  our
operations,  including our  ability to incur  debt, pay  dividends, make certain
investments and  payments  and  encumber  or dispose  of  assets.  In  addition,
financial  covenants contained in agreements relating to our existing and future
debt could lead to a default in the event our results of operations do not  meet
our  plans and we are unable to amend such financial covenants prior to default.
A default under one  debt instrument may also  trigger cross-defaults under  our
other  debt  instruments. An  event of  default under  one or  more of  our debt
instruments, if not cured or waived, could have a material adverse effect on us.
Our credit and debt ratings were lowered in August 2002, and accordingly, it may
be difficult  for  us  to  secure  additional  financing,  if  we  need  it,  on
satisfactory terms or at all.

     During  this industry downturn,  our business strategy has  been in part to
enhance our financial  flexibility. In  February 2001  and May  2001, we  raised
$500.0  million  through the  sale of  9.25%  senior notes  due 2008  and $250.0
million through  the sale  of  5.75% convertible  subordinated notes  due  2006,
respectively.  Of the  combined net proceeds  of $733.0 million,  we used $509.5
million to repay amortizing  term loans under our  secured credit facility.  The
balance of the net proceeds supports our expansion efforts and general corporate

                                        34
<PAGE>

and  working  capital purposes.  In May  2001 holders  of the  5.75% convertible
subordinated notes due May  2003, following our announced  plan to redeem  these
notes,  converted $50.2 million  of their notes  into 3.7 million  shares of our
common stock. We now have, and for the foreseeable future will continue to have,
a significant amount of indebtedness. As of December 31, 2002, we had total debt
of $1,808.7 million debt and had available to us a $100.0 million revolving line
of credit, which is  subject to borrowing base  of qualified receivables,  under
which  no  amounts  were  drawn.  Our indebtedness  requires  us  to  dedicate a
substantial portion of our cash flow from operations to service payments on  our
debt,  with such payments  principally for interest.  For 2002, interest expense
payable in cash was $143.4 million.

     We expect to spend  up to $125.0 million  in capital expenditures in  2003.
During  2002,  2001 and  2000, we  made capital  expenditures of  $95.1 million,
$158.7 million and  $480.1 million,  respectively. Our  capital expenditures  in
2002  were focused on increasing capacity  for MicroLeadFrame(TM), flip chip and
digital micro-mirror devices.

     We continue to diversify our operations geographically. In January 2002, we
acquired  Agilent   Technologies,   Inc.'s   packaging   business   related   to
semiconductor  packages  utilized  in printers  for  $2.8 million  in  cash. The
purchase price was principally allocated to the tangible assets. In April  2002,
we  acquired the  semiconductor packaging  business of  Citizen Watch  Co., Ltd.
located in  the Iwate  prefecture in  Japan. The  business acquired  includes  a
manufacturing  facility,  over  80  employees  and  intellectual  property.  The
purchase price  included a  $7.8 million  cash  payment at  closing and  we  are
required to make additional payments one year from closing for the amount of the
deferred  purchase price as well as contingent payments. Based on the resolution
of the contingency as of January  2003, the total amount of additional  payments
due  in April 2003 is 1.7 billion Japanese  yen ($14.3 million based on the spot
exchange rate at December 31, 2002). In October 2002, we terminated negotiations
with Fujitsu  Limited  to acquire  Fujitsu's  packaging and  test  operation  in
Kagoshima,  Japan pursuant to the April 2002 memorandum of understanding between
our company and Fujitsu.  In July 2001, we  acquired, in separate  transactions,
Taiwan  Semiconductor  Technology Corporation  ("TSTC") and  Sampo Semiconductor
Corporation ("SSC")  in  Taiwan.  The combined  purchase  price,  including  the
settlement  of a January 2002 earn-out provision,  was paid with the issuance of
6.7 million shares of our common stock valued at $123.1 million, the  assumption
of $34.8 million of debt and $3.7 million of cash consideration, net of acquired
cash. In January 2001, Amkor Iwate Corporation commenced operations and acquired
from  Toshiba a packaging and  test facility located in  the Iwate prefecture in
Japan financed by  a short-term  note payable to  Toshiba of  $21.1 million  and
$47.0  million in other financing from a Toshiba affiliate. We currently own 60%
of Amkor Iwate and Toshiba owns 40%  of the outstanding shares, which shares  we
are  required to  purchase by  January 2004.  The share  purchase price  will be
determined based on the historical performance of the joint venture, but  cannot
be  less than 1  billion Japanese yen  and cannot exceed  4 billion Japanese yen
($8.4 million to $33.7 million based on  the spot exchange rate at December  31,
2002).

     As  part of our  strategy to sell our  investment in ASI  and to divest our
wafer fabrication services business,  we entered into  a series of  transactions
beginning in the second half of 2002:

     - In  September 2002,  we sold  20 million  shares of  ASI common  stock to
       Dongbu Group for $58.1 million in net cash proceeds and 42 billion Korean
       Won (approximately $35.4 million at a  spot exchange rate as of  December
       31,  2002) of interest  bearing notes from  Dongbu Corporation payable in
       two equal principal  payments in  September 2003 and  February 2004.  The
       Dongbu  Group comprises  Dongbu Corporation,  Dongbu Fire  Insurance Co.,
       Ltd. and  Dongbu  Life Insurance  Co.,  Ltd.,  all of  which  are  Korean
       corporations   and   are  collectively   referred  herein   as  "Dongbu."
       Additionally, we  divested one  million  shares of  ASI common  stock  in
       connection  with the  payment of  certain advisory  fees related  to this
       transaction.

     - As of February 28, 2003, we sold our wafer fabrication services  business
       to ASI for total consideration of $62 million.

     - In  separate transactions designed to  facilitate a future merger between
       ASI and Dongbu, (i) we  acquired a 10% interest  in Acqutek from ASI  for
       $1.9  million; (ii) we acquired the Precision Machine Division ("PMD") of
       Anam Instruments, a  related party to  Amkor, for $8  million; and  (iii)
       Anam  Instruments, which  had been partially  owned by  ASI, utilized the
       proceeds from the sale of PMD to us
                                        35
<PAGE>

       to buy back  all of  the Anam Instruments  shares owned  by ASI.  Acqutek
       supplies  materials to the semiconductor  industry and is publicly traded
       in Korea. An entity controlled by  the family of James Kim, our  Chairman
       and  Chief Executive Officer, held a 25% ownership interest in Acqutek at
       the time  of  our  acquisition  of  our  interest  in  Acqutek.  We  have
       historically  purchased and continue to purchase leadframes from Acqutek.
       PMD  supplies  sophisticated  die  mold   systems  and  tooling  to   the
       semiconductor  industry and  historically over 90%  of its  sales were to
       Amkor. At the time of our acquisition of PMD, Anam Instruments was  owned
       20% by ASI and 20% by a family member of James Kim.

     As of February 28, 2003, we sold our wafer fabrication services business to
ASI.  Additionally, we obtained  a release from  Texas Instruments regarding our
contractual obligations  with  respect  to  wafer  fabrication  services  to  be
performed subsequent to the transfer of the business to ASI. We will reflect our
wafer  fabrication services segment as a  discontinued operation as of the first
quarter of 2003.  In connection with  the disposition of  our wafer  fabrication
business, we expect to incur an estimated $1 million in severance and other exit
costs  to close  our wafer fabrication  services operations in  Boise, Idaho and
Lyon, France. The net proceeds from our sale  of ASI stock to Dongbu as well  as
from  the sale of our wafer foundry services will be reinvested into our company
pursuant to the requirements of our senior note indentures.

     At January 1, 2002 Amkor owned 47.7  million shares or 42% of ASI's  voting
stock.  During 2002, we divested 21 million  shares of ASI stock and at December
31, 2002 Amkor owned 26.7  million shares of ASI or  21%. On March 24, 2003,  we
sold  an additional 7 million  shares of ASI common  stock to an investment bank
for 24.4 billion Korean won ($19.5 million based on the spot exchange rate as of
the transaction date) which approximates the carrying value of those shares.  As
part  of that sale, we  purchased a nondeliverable call  option for $6.8 million
that expires December 2003  and is indexed  to ASI's share  price with a  strike
price of $1.97 per share. The net proceeds from the exercise of the option could
be  less than the current carrying value and could expire unexercised losing our
entire investment in the  option. As of  March 24, 2003,  we owned 19.7  million
shares of ASI, or 16% of ASI's voting stock. Beginning March 24, 2003, we ceased
accounting  for our investment in ASI under  the equity method of accounting and
commenced accounting  for  our  investment  as a  marketable  security  that  is
available  for sale.  We intend  to sell  our remaining  investment in  ASI. The
ultimate level of  proceeds from  the sale of  our remaining  investment in  ASI
could be less than the current carrying value.

     We  believe that our  existing cash balances,  available credit lines, cash
flow from operations and available equipment lease financing will be  sufficient
to  meet our projected  capital expenditures, debt  service, working capital and
other cash requirements  for at  least the next  twelve months.  We may  require
capital  sooner than  currently expected. We  cannot assure  you that additional
financing will be available when  we need it or, if  available, that it will  be
available  on satisfactory  terms. In  addition, the  terms of  the secured bank
facility, senior notes  and senior subordinated  notes significantly reduce  our
ability to incur additional debt. Failure to obtain any such required additional
financing could have a material adverse effect on our company.

     A  summary of our  contractual commitments as  of December 31,  2002 are as
follows:

<Table>
<Caption>
                                                        YEAR ENDING DECEMBER 31,
                                         -------------------------------------------------------
                                                                 2004-      2006-
                                           TOTAL       2003       2005       2007     AFTER 2008
                                         ----------   -------   --------   --------   ----------
                                                             (IN THOUSANDS)
<S>                                      <C>          <C>       <C>        <C>        <C>
Total debt, including capital lease
  obligations..........................  $1,808,713   $71,023   $ 98,863   $937,426   $ 701,401
Operating lease obligations............     101,477    10,026     14,048     14,062      63,341
                                         ----------   -------   --------   --------   ---------
Total contractual obligations..........  $1,910,190   $81,049   $112,911   $951,488   $764,7421
                                         ==========   =======   ========   ========   =========
</Table>

     We have a  $100.0 million revolving  line of credit  through March 2005  of
which  the entire balance was available as of December 31, 2002. We are required
to purchased Toshiba's ownership interest in Amkor Iwate by January 1, 2004 at a
purchase price that will  be determined based on  the historical performance  of
the  joint venture  but cannot be  less than  1 billion Japanese  yen and cannot
exceed 4 billion Japanese yen ($8.4 million  to $33.7 million based on the  spot
exchange rate at December 31, 2002). Additionally, in

                                        36
<PAGE>

connection  with  our acquisition  of  a semiconductor  packaging  business from
Citizen Watch Co.,  Ltd. we are  required to make  additional payments one  year
from closing for the amount of the deferred purchase price as well as contingent
payments.  Based on the  resolution of the  contingency as of  January 2003, the
total amount of additional  payments due in April  2003 is 1.7 billion  Japanese
yen  ($14.3 million based on the spot  exchange rate at December 31, 2002). Such
amount was accrued as of the acquisition date and is reflected as a liability on
our balance sheet as of December 31, 2002. We have committed by January 2004  to
purchase  for 559.7  million Japanese yen,  or $4.7 million  at current exchange
rates, a tract of land  adjacent to the Amkor  Iwate facility that is  currently
being leased. This commitment can be terminated for approximately $1.8 million.

CRITICAL ACCOUNTING POLICIES

     Financial Reporting Release No. 60, released by the Securities and Exchange
Commission,   requires  all  companies  to  include  a  discussion  of  critical
accounting policies or methods used in the preparation of financial  statements.
We have identified the policies below as critical to our business operations and
the  understanding of  our results of  operations. A summary  of our significant
accounting policies  used  in  the preparation  of  our  consolidated  financial
statements  appears  in  Note  1  of the  notes  to  the  consolidated financial
statements. Our preparation of  this annual report on  Form 10-K requires us  to
make  estimates and  assumptions that affect  the reported amount  of assets and
liabilities, disclosure of contingent assets and liabilities at the date of  our
financial statements and the reported amounts of revenue and expenses during the
reporting  period. There can be no assurance that actual results will not differ
from those estimates.

     Revenue  Recognition  and   Risk  of   Loss.     Revenues  from   packaging
semiconductors  and  performing test  services are  recognized upon  shipment or
completion  of  the   services.  Our   company  does  not   take  ownership   of
customer-supplied  semiconductor wafers. Title and risk of loss remains with the
customer for  these  materials  at  all times.  Accordingly,  the  cost  of  the
customer-supplied  materials  is  not  included  in  the  consolidated financial
statements. Prior to  the sales of  our wafer fabrication  services business  on
February 28, 2003, we recorded wafer fabrication services revenues upon shipment
of  completed  wafers.  Such  policies are  consistent  with  provisions  in the
Securities and Exchange Commission's Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements."

     Provision for Income Taxes.  We operate  in and file income tax returns  in
various  U.S. and non-U.S. jurisdictions which are subject to examination by tax
authorities. Our tax returns have been examined through 1998 in the  Philippines
and  the U.S., through 1999 in Japan, through 2000 in Taiwan and through 2001 in
China. The  tax returns  for open  years in  all jurisdictions  in which  we  do
business  are  subject to  changes  upon examination.  We  believe that  we have
estimated and provided adequate accruals  for the probable additional taxes  and
related interest expense that may ultimately result from examinations related to
our  transfer pricing and local attribution of income resulting from significant
intercompany transactions, including ownership and use of intellectual property,
in various  U.S. and  non-U.S.  jurisdictions. Our  estimated tax  liability  is
subject  to change as  examinations of specific  tax years are  completed in the
respective jurisdictions.  We  believe  that any  additional  taxes  or  related
interest  over  the amounts  accrued  will not  have  a material  effect  on our
financial condition or results of operations, nor do we expect that examinations
to be completed in the  near term would have a  material effect. As of  December
31,  2002 and 2001, the accrual for current taxes and estimated additional taxes
was $48.8 million and $53.4 million,  respectively. In addition, changes in  the
mix  of income  from our  foreign subsidiaries,  expiration of  tax holidays and
changes in tax laws or regulations could result in increased effective tax rates
in the future.

     Additionally, we  record  the estimated  future  tax effects  of  temporary
differences between the tax bases of assets and liabilities and amounts reported
in  the accompanying consolidated balance sheets,  as well as operating loss and
tax credit carryforwards. During  2002, we recorded a  $138.2 million charge  to
establish  a  valuation allowance  against  our deferred  tax  assets consisting
primarily of  U.S.  and  Taiwanese  net operating  loss  carryforwards  and  tax
credits.  In connection with our divestiture in 2002 of 21 million shares of ASI
common stock, we  realized a capital  loss of approximately  $117.0 million  and
recognized  a U.S.  tax benefit of  $44.5 million  for which we  provided a full
valuation allowance because we  did not have any  offsetting capital gains.  The
total  change in  the valuation  allowance against  our deferred  tax assets was
$182.7 million in 2002.
                                        37
<PAGE>

Generally  accepted  accounting  principles  require  companies  to  weigh  both
positive  and  negative  evidence  in  determining  the  need  for  a  valuation
allowance.  In light of  our three years of  cumulative losses, an unprecedented
industry  downturn  and  continued  poor  visibility  of  customer  demand,   we
determined  in  the  fourth  quarter  that  a  valuation  allowance representing
substantially all of  our deferred  tax assets was  appropriate. These  negative
factors  outweighed our forecasted future  profitability and expectation that we
will be able to utilize our net operating loss carryforwards. We will resume the
recognition  of  deferred   tax  assets   when  we   return  to   profitability.
Additionally,  until we utilize our net operating loss carryforwards, the income
tax provision will reflect modest levels of foreign taxation. In December  2002,
we  utilized $33.3 million  of U.S. net  operating losses by  carrying back such
amounts to offset U.S. reported taxable  income in prior years. At December  31,
2002,  our  company has  remaining  U.S. net  operating  losses available  to be
carried  forward  totaling  $375.5  million  expiring  between  2021  and  2022.
Additionally,  at  December 31,  2002, our  company  had non-U.S.  net operating
losses available to be carried  forward totaling $61.2 million expiring  between
2003 and 2012.

     Valuation of Long-Lived Assets.  We assess the carrying value of long-lived
assets  which  includes property,  plant  and equipment,  intangible  assets and
goodwill whenever events or changes in circumstances indicate that the  carrying
value  may not be recoverable. Factors we consider important which could trigger
an impairment review include the following:

     - significant under-performance relative to expected historical or
       projected future operating results;

     - significant changes in the manner of our use of the asset;

     - significant negative industry or economic trends; and

     - our market capitalization relative to net book value.

     Upon the existence of one or more of the above indicators of impairment, we
would test  such assets  for a  potential impairment.  The carrying  value of  a
long-lived asset is considered impaired when the anticipated cash flows are less
than  the asset's carrying value.  In that event, a  loss is recognized based on
the amount by  which the carrying  value exceeds  the fair market  value of  the
long-lived   asset.  Fair  market  value   is  determined  primarily  using  the
anticipated cash flows discounted at a rate commensurate with the risk involved.

     Although significant recovery  was noted  in our  company's core  packaging
services during the second quarter of 2002, our test services assets and several
non-core packaging services assets remained at low utilization rates relative to
our  projections, and  are no  longer expected  to reach  previously anticipated
utilization  levels.  In  addition,  during  the  second  quarter  of  2002,  we
experienced  a significant  decline in  our market  capitalization. These events
triggered an impairment  review in  accordance with  SFAS No.  144. This  review
included  a company-wide evaluation  of underutilized assets  that could be sold
and a detailed update of our operating and cash flow projections. As a result of
this analysis, we identified $19.8 million of test and packaging fixed assets to
be disposed. We  recognized an  $18.7 million  impairment charge  to reduce  the
carrying  value of the test  and packaging fixed assets  to be disposed to their
fair value  less cost  to sell.  Fair value  of the  assets to  be disposed  was
determined with the assistance of an appraisal firm and available information on
the  resale value of  the equipment. Additionally, we  tested for impairment our
long-lived test assets that are held and used, including intangible assets  that
we are amortizing, and certain non-core packaging fixed assets that are held and
used.  For the test and packaging assets that are held and used, we recognized a
$171.6 million impairment charge to reduce the carrying value of those assets to
fair value. An appraisal firm was engaged to assist in the determination of  the
fair value of the assets held for use. The determination of fair value was based
on  projected  cash  flows  discounted  at a  rate  commensurate  with  the risk
involved.

     In 2002,  Statement of  Financial Accounting  Standards ("SFAS")  No.  142,
"Goodwill  and Other  Intangible Assets"  became effective  and as  a result, we
ceased amortization of goodwill.  In lieu of amortization,  we were required  to
perform  an initial impairment review of our  goodwill as of January 1, 2002 and
then on  an  annual basis  or  between  annual tests  in  certain  circumstances
including  a significant adverse change in  the business climate and testing for
recoverability of long-lived assets. Based on  the comparison of the fair  value
of  the reporting units with their respective carrying values each as of January
1, 2002, we
                                        38
<PAGE>

concluded  that  goodwill  associated  with  our  packaging  and  test  services
reporting units was not impaired as of adoption. Since we tested our  long-lived
assets  for  recoverability  as  of  June 30,  2002,  we  retested  goodwill for
impairment as of June  30, 2002, and  concluded that the  carrying value of  the
assets and liabilities associated with the test services reporting unit exceeded
its  fair value.  As of June  30, 2002,  we recognized a  $73.1 million goodwill
impairment charge. Such impairment charge was measured by comparing the  implied
fair  value of the goodwill associated with  the test services reporting unit to
its carrying value. An appraisal firm was engaged to assist in the determination
of the fair value of  our reporting units. The  determination of fair value  was
based  on projected cash flows  discounted at a rate  commensurate with the risk
involved.

     Depreciation accounting  requires estimation  of the  useful lives  of  the
assets  to be depreciated  as well as  adoption of a  method of depreciation. We
have historically calculated  depreciation using the  straight-line method  over
the  estimated  useful lives  of the  depreciable  assets. We  have historically
estimated the useful lives of  our machinery and equipment  to be three to  five
years,  with the substantial  majority of our  packaging assets having estimated
useful lives  of four  years. Effective  with  the fourth  quarter of  2002,  we
changed  the estimated useful  lives of certain of  our packaging equipment from
four years to seven years for depreciation  purposes, which is in line with  our
historical usage and consistent with other companies in our industry. We did not
extend  the useful lives  of the packaging equipment  associated with the second
quarter impairment charge based  on our expected use  of that equipment and  the
associated cash flows. This change reduced depreciation expense by approximately
$17  million per quarter. Our  decision to change the  estimated useful lives of
such packaging equipment was based on the following:

     - historical experience;

     - expected future cash flows;

     - prevailing industry practice;

     - consultations with an independent appraisal firm; and

     - consultations with equipment manufacturers.

     We believe that our principal competitors depreciate their packaging assets
over periods of six to eight years. The change of the estimated useful lives  is
considered  a change in  estimate and was  accounted for prospectively beginning
with the fourth quarter of 2002.

     Evaluation  of  Equity  Investments.    We  evaluate  our  investments  for
impairment  due  to declines  in  market value  that  are considered  other than
temporary. In the event  of a determination  that a decline  in market value  is
other  than temporary, a charge to earnings is recorded for the unrealized loss,
and a new  cost basis  in the  investment is  established. The  stock prices  of
semiconductor  companies'  stocks,  including  ASI  and  its  competitors,  have
experienced significant volatility during the  past several years. The  weakness
in  the semiconductor industry has affected the demand for the wafer output from
ASI's foundry and the market value of  ASI's stock as traded on the Korea  Stock
Exchange. During 2002, we recorded impairment charges totaling $172.5 million to
reduce  the  carrying value  of our  investment  in ASI  to ASI's  market value.
Additionally during 2002, we recorded a loss of $1.8 million on the  disposition
of  a portion of our interest  in ASI to Dongbu. At  January 1, 2002 Amkor owned
47.7 million shares or 42%  of ASI's voting stock.  During 2002, we divested  21
million  shares of ASI stock  and at December 31,  2002 Amkor owned 26.7 million
shares of ASI or 21%. On March 24, 2003, we sold an additional 7 million  shares
of  ASI common stock  to an investment  bank for 24.4  billion Korean won ($19.5
million based  on the  spot exchange  rate  as of  the transaction  date)  which
approximates  the  carrying value  of those  shares.  As part  of that  sale, we
purchased a nondeliverable call  option for $6.8  million that expires  December
2003 and is indexed to ASI's share price with a strike price of $1.97 per share.
The  net proceeds from the exercise of the option could be less than the current
carrying value and could expire unexercised losing our entire investment in  the
option.  As of March  24, 2003, we owned  19.7 million shares of  ASI, or 16% of
ASI's voting  stock. Beginning  March 24,  2003, we  ceased accounting  for  our
investment in ASI under the equity method of accounting and commenced accounting
for  our investment  as a  marketable security  that is  available for  sale. We
intend to sell our remaining investment  in ASI. The ultimate level of  proceeds
from  the sale of our remaining investment in ASI could be less than the current
carrying value.
                                        39
<PAGE>

     Valuation of  Inventory.   In  general  we  order raw  materials  based  on
customers'  forecasted  demand  and  we  do  not  maintain  any  finished  goods
inventory. If  our customers  change their  forecasted requirements  and we  are
unable to cancel our raw materials order or if our vendors require that we order
a  minimum  quantity  that  exceeds  the  current  forecasted  demand,  we  will
experience a build-up in raw material inventory. We will either seek to  recover
the  cost  of the  materials  from our  customers  or utilize  the  inventory in
production. However, we may  not be successful in  recovering the cost from  our
customers  or be able to  use the inventory in  production and accordingly if we
believe that it is probable  that we will not be  able to recover such costs  we
adjust  our reserve estimate. Additionally, our  reserve for excess and obsolete
inventory is based on  forecasted demand we receive  from our customers. When  a
determination  is made that the inventory will  not be utilized in production it
is written-off and disposed.

MARKET RISK SENSITIVITY

     Our company  is  exposed to  market  risks, primarily  related  to  foreign
currency  and interest rate  fluctuations. In the normal  course of business, we
employ  established  policies   and  procedures  to   manage  the  exposure   to
fluctuations in foreign currency values and changes in interest rates.

  FOREIGN CURRENCY RISKS

     Our  company's  primary  exposures  to  foreign  currency  fluctuations are
associated with transactions and related  assets and liabilities denominated  in
Philippine  pesos, Korean won, Japanese yen,  Taiwanese dollar and Chinese yuan.
The objective in managing  these foreign currency exposures  is to minimize  the
risk  through  minimizing  the  level  of  activity  and  financial  instruments
denominated in those  currencies. Our  use of  derivative instruments  including
forward  exchange contracts has been insignificant  throughout 2002 and 2001 and
it is expected our use of derivative instruments will continue to be minimal.

     The peso-based financial instruments  primarily consist of cash,  non-trade
receivables,  deferred tax  assets and liabilities,  non-trade payables, accrued
payroll, taxes and other expenses. Based  on the portfolio of peso-based  assets
and  liabilities at December 31, 2002 and 2001, a 20% increase in the Philippine
peso to U.S.  dollar spot  exchange rate  as of  the balance  sheet dates  would
result   in  a  decrease  of  approximately   $0.5  million  and  $3.9  million,
respectively, in peso-based net assets.

     The won-based financial  instruments primarily consist  of cash,  non-trade
receivables,  non-trade  payables, accrued  payroll,  taxes and  other expenses.
Based on the portfolio of won-based assets and liabilities at December 31,  2002
and  2001, a 20% increase in the Korean won to U.S. dollar spot exchange rate as
of the balance  sheet dates would  result in a  decrease of approximately  $10.3
million and $3.8 million, respectively, in won-based net assets.

     The Taiwanese dollar-based financial instruments primarily consist of cash,
non-trade  receivables, deferred tax assets and liabilities, non-trade payables,
accrued payroll,  taxes, debt  and other  expenses. Based  on the  portfolio  of
Taiwanese  dollar-based assets and liabilities at  December 31, 2002 and 2001, a
20% increase in the Taiwanese dollar to U.S. dollar spot exchange rate as of the
balance sheet dates would result in a decrease of approximately $1.8 million and
$1.9 million, respectively, in Taiwanese dollar-based net assets.

     The yuan-based financial instruments  primarily consist of cash,  non-trade
receivables,  deferred tax  assets and liabilities,  non-trade payables, accrued
payroll, taxes and other expenses. Based  on the portfolio of yuan-based  assets
and  liabilities at December  31, 2002 and  2001, a 20%  increase in the Chinese
yuan to U.S.  dollar spot  exchange rate  as of  the balance  sheet dates  would
result   in  a  decrease  of  approximately   $1.0  million  and  $0.7  million,
respectively, in yuan-based net assets.

     The yen-based financial  instruments primarily consist  of cash,  non-trade
receivables,  deferred tax  assets and liabilities,  non-trade payables, accrued
payroll, taxes, debt and other expenses. Our exposure to the yen is  principally
as  a result  of our 2001  acquisition of  Amkor Iwate Corporation  and our 2002
acquisition of a  semiconductor packaging  business of Citizen  Watch Co.,  Ltd.
Based  on the portfolio of yen-based assets and liabilities at December 31, 2002
and 2001,  a 20%  decrease in  the Japanese  yen to  U.S. dollar  spot  exchange

                                        40
<PAGE>

rate as of the balance sheet date  would result in an increase of  approximately
$15.5 million and $15.6 million, respectively, in yen-based net liabilities.

  INTEREST RATE RISKS

     Our  company has interest rate risk with  respect to our long-term debt. As
of December 31, 2002, we  had a total of $1,808.7  million of debt of which  91%
was  fixed  rate debt  and 9%  was variable  rate debt.  Our variable  rate debt
principally consisted of short-term borrowings and amounts outstanding under our
secured bank facilities that included term loans and a $100.0 million  revolving
line of credit of which no amounts were drawn as of December 31, 2002. The fixed
rate  debt  consisted of  senior notes,  senior subordinated  notes, convertible
subordinated notes and foreign debt. As of December 31, 2001, we had a total  of
$1,826.3  million of debt of  which 91% was fixed rate  debt and 9% was variable
rate debt. Changes  in interest rates  have different impacts  on our fixed  and
variable  rate portions of our debt portfolio. A change in interest rates on the
fixed portion of the debt portfolio impacts the fair value of the instrument but
has no impact on interest incurred or cash flows. A change in interest rates  on
the  variable portion  of the debt  portfolio impacts the  interest incurred and
cash flows but does not impact the fair value of the instrument. The fair  value
of  the convertible subordinated notes  is also impacted by  the market price of
our common stock.

     The table below presents the interest  rates, maturities and fair value  of
our fixed and variable rate debt as of December 31, 2002.

<Table>
<Caption>
                                        YEAR ENDING DECEMBER 31,
                            -------------------------------------------------
                             2003      2004      2005       2006       2007     THEREAFTER     TOTAL      FAIR VALUE
                            -------   -------   -------   --------   --------   ----------   ----------   ----------
<S>                         <C>       <C>       <C>       <C>        <C>        <C>          <C>          <C>
Long-term debt:
  Fixed rate debt.........  $15,426   $ 1,072   $   310   $675,000   $258,750    $700,000    $1,650,558   $1,234,146
  Average interest rate...      4.0%      4.0%      4.0%       8.0%       5.0%        9.6%          8.2%
  Variable rate debt......  $55,597   $55,367   $42,114   $  2,877   $    799    $  1,401    $  158,155   $  158,155
  Average interest rate...      2.6%      5.4%      5.4%       4.1%       3.2%        3.2%          4.4%
</Table>

  EQUITY PRICE RISKS

     Our  outstanding  5.75%  convertible  subordinated notes  due  2006  and 5%
convertible subordinated notes  due 2007  are convertible into  common stock  at
$35.00  per share  and $57.34  per share, respectively.  We intend  to repay our
convertible subordinated  notes upon  maturity, unless  converted. If  investors
were to decide to convert their notes to common stock, our future earnings would
benefit  from a reduction  in interest expense and  our common stock outstanding
would be increased. If we paid a premium to induce such conversion, our earnings
could include an additional charge.

RISK FACTORS THAT MAY AFFECT FUTURE OPERATING PERFORMANCE

     The following  section  discloses  the  known  material  risks  facing  our
company.  Additional risks and uncertainties that are presently unknown to us or
that we currently deem  immaterial may also impair  our business operations.  We
cannot  assure you that  any of the  events discussed in  the risk factors below
will not occur.  If they  do, our business,  financial condition  or results  of
operations could be materially adversely affected.

DEPENDENCE ON THE HIGHLY CYCLICAL SEMICONDUCTOR AND ELECTRONIC PRODUCTS
INDUSTRIES -- WE OPERATE IN VOLATILE INDUSTRIES, AND INDUSTRY DOWNTURNS HARM OUR
PERFORMANCE.

     Our  business is tied  to market conditions  in the semiconductor industry,
which is highly  cyclical. Because  our business is,  and will  continue to  be,
dependent  on  the  requirements of  semiconductor  companies  for subcontracted
packaging and test services, any downturn  in the semiconductor industry or  any
other  industry that uses a significant number of semiconductor devices, such as
the personal computer  and telecommunication  devices industries,  could have  a
material  adverse effect  on our  business. Although  we experienced significant
recovery in our company's core  packaging services during 2002, there  continues
to be significant

                                        41
<PAGE>

uncertainty  throughout the industry related to market demand which is hindering
visibility throughout  the  supply  chain.  That lack  of  visibility  makes  it
difficult  to  forecast  whether  the  recovery  we  are  experiencing  will  be
sustained. If industry conditions do not continue to improve, we could  continue
to  sustain  significant  losses  which  could  materially  impact  our business
including our liquidity.

FLUCTUATIONS IN OPERATING RESULTS -- OUR OPERATING RESULTS MAY VARY
SIGNIFICANTLY AS A RESULT OF FACTORS THAT WE CANNOT CONTROL.

     Our operating results have varied significantly from period to period. Many
factors could materially  and adversely  affect our revenues,  gross profit  and
operating  income, or  lead to  significant variability  of quarterly  or annual
operating results.

     These factors include, among others:

     - evolutions in the life cycles of our customers' products,

     - changes in our capacity utilization,

     - the cyclical nature of  both the semiconductor  industry and the  markets
       addressed by end-users of semiconductors,

     - the short-term nature of our customers' commitments, timing and volume of
       orders relative to our production capacity,

     - rescheduling and cancellation of large orders,

     - erosion of packaging selling prices,

     - changes  in costs, availability  and delivery times  of raw materials and
       components and changes in costs and availability of labor,

     - fluctuations in manufacturing yields,

     - changes in semiconductor package mix,

     - timing of expenditures in anticipation of future orders,

     - availability and cost of financing for expansion,

     - ability to develop and implement new technologies on a timely basis,

     - competitive factors,

     - changes in effective tax rates,

     - loss of key personnel or the shortage of available skilled workers,

     - international political, economic or terrorist events,

     - currency and interest rate fluctuations,

     - environmental events, and

     - intellectual property transactions and disputes.

DECLINING AVERAGE SELLING PRICES -- THE SEMICONDUCTOR INDUSTRY PLACES DOWNWARD
PRESSURE ON THE PRICES OF OUR PRODUCTS.

     Prices for packaging and test services and wafer fabrication services  have
declined  over time.  Historically, we  have been  able to  partially offset the
effect of price declines by  successfully developing and marketing new  packages
with  higher  prices,  such  as advanced  leadframe  and  laminate  packages, by
negotiating lower prices with our  material vendors, and by driving  engineering
and  technological changes in our packaging and test processes which resulted in
reduced manufacturing costs.  Average selling  prices for 2002  declined 16%  as
compared  to average  selling prices  in 2001.  Average selling  prices for 2001
declined 14% as compared to
                                        42
<PAGE>

average selling  prices  in  2000.  These declines  in  average  selling  prices
significantly  impacted  our gross  margins  in 2002  and  2001. We  expect that
average selling prices  for our  packaging and  test services  will continue  to
decline  in the future. If  our semiconductor package mix  does not shift to new
technologies with higher prices  or we cannot reduce  the cost of our  packaging
and  test services  to offset  a decline in  average selling  prices, our future
operating results will suffer.

HIGH LEVERAGE AND RESTRICTIVE COVENANTS -- OUR SUBSTANTIAL INDEBTEDNESS COULD
MATERIALLY RESTRICT OUR OPERATIONS AND ADVERSELY AFFECT OUR FINANCIAL CONDITION.

     We now have, and for the foreseeable future will have, a significant amount
of indebtedness. As of  December 31, 2002, total  debt was $1,808.7 million.  We
have a $100.0 million revolving line of credit of which no amounts were drawn as
of December 31, 2002. In addition, despite current debt levels, the terms of the
indentures  governing our  indebtedness may  limit our  ability to  increase our
indebtedness, but they  do not prohibit  us or our  subsidiaries from  incurring
substantially  more debt. If new  debt is added to  our consolidated debt level,
the related risks that we now face could intensify.

     In June 2002 and September 2002 we amended our existing bank debt covenants
to provide further flexibility with respect to capital expenditures,  investment
restrictions and other financial covenants measured in part by our liquidity and
earnings.  As part  of the  September 2002  amendment, lenders  under our senior
secured credit  facility  agreed  to  extend  the  existing  financial  covenant
framework through December 31, 2003. Our senior secured debt encompasses a $97.1
million  term  loan and  the  unused revolving  line  of credit.  The  term loan
maintained its  scheduled  amortization of  $0.25  million per  quarter  through
September  2003  and then  approximately $12  million  per quarter  beginning in
December 2003 through September 2005. The bank debt facility will revert to  its
original  covenant  structure  in January  2004.  In general,  covenants  in the
agreements governing our existing debt, and debt we may incur in the future, may
materially restrict our  operations, including  our ability to  incur debt,  pay
dividends,  make certain  investments and  payments and  encumber or  dispose of
assets. In addition, financial covenants contained in agreements relating to our
existing and future debt  could lead to  a default in the  event our results  of
operations  do not  meet our  plans and  we are  unable to  amend such financial
covenants prior to default. A default under one debt instrument may also trigger
cross-defaults under our other debt instruments.  An event of default under  one
or  more of our debt instruments, if not  cured or waived, could have a material
adverse effect on us. Our credit and  debt ratings were lowered in August  2002,
and  accordingly, it may be difficult for  us to secure additional financing, if
we need it, on satisfactory terms or at all. Our substantial indebtedness could:

     - increase our  vulnerability  to  general adverse  economic  and  industry
       conditions;

     - limit  our ability to fund  future working capital, capital expenditures,
       research and development and other general corporate requirements;

     - require us  to dedicate  a  substantial portion  of  our cash  flow  from
       operations to service interest and principal payments on our debt;

     - limit  our  flexibility  to react  to  changes  in our  business  and the
       industry in which we operate;

     - place us at  a competitive disadvantage  to any of  our competitors  that
       have less debt; and

     - limit,  along with the  financial and other  restrictive covenants in our
       indebtedness, among other things, our ability to borrow additional funds.

RELATIONSHIP WITH ASI -- OUR FINANCIAL PERFORMANCE CAN BE ADVERSELY AFFECTED BY
ASI'S FINANCIAL PERFORMANCE

     We historically  marketed the  output  of fabricated  semiconductor  wafers
provided   by  a   wafer  fabrication  foundry   owned  and   operated  by  Anam
Semiconductor, Inc. ("ASI").  We derived  92.8%, 79.4%  and 80.7%  of our  wafer
fabrication services revenues for 2002, 2001, and 2000, respectively, from Texas
Instruments  pursuant  to a  manufacturing  and purchase  agreement  between our
company, ASI and  Texas Instruments.  On February 28,  2003, we  sold our  wafer
fabrication  services  business  to  ASI. Additionally,  we  obtained  a release

                                        43
<PAGE>

from  Texas Instruments  regarding our  contractual obligations  with respect to
wafer fabrication services  to be performed  subsequent to the  transfer of  the
business  to ASI. Beginning with the first  quarter of 2003, we will reflect our
wafer fabrication services segment as  a discontinued operation and restate  our
historical  results. In connection with the disposition of our wafer fabrication
business, we expect to incur an estimated $1 million in severance and other exit
costs to close  our wafer fabrication  services operations in  Boise, Idaho  and
Lyon,  France. We estimate that in the first quarter of 2003 we will recognize a
pre-tax net gain on the disposition  of our wafer fabrication services  business
approximately  $58  million.  The  carrying value  of  the  disposed  net assets
associated with  the  business  as of  February  28,  2003 was  $3  million.  In
addition,  pursuant to  the agreements between  Amkor and Dongbu,  (1) Amkor and
Dongbu agreed to use reasonable best efforts to cause Dongbu Electronics and ASI
to be merged together  as soon as  practicable, (2) Amkor  and Dongbu agreed  to
cause  ASI to use the proceeds ASI received  from its sale of stock to Dongbu to
purchase shares in  Dongbu Electronics and  (3) Amkor and  Dongbu agreed to  use
their  best efforts  to provide releases  and indemnifications  to the chairman,
directors and  officers of  ASI, either  past  or incumbent,  from any  and  all
liabilities  arising  out of  the  performance of  their  duties at  ASI between
January 1,  1995 and  December 31,  2001.  The last  provision would  provide  a
release  and indemnification for James Kim, our CEO and Chairman, and members of
his family. We  are not aware  of any  claims or other  liabilities which  these
individuals   would  be   released  from  or   for  which   they  would  receive
indemnification.

     At January 1, 2002 Amkor owned 47.7  million shares or 42% of ASI's  voting
stock.  During 2002, we divested 21 million  shares of ASI stock and at December
31, 2002 Amkor owned 26.7  million shares of ASI or  21%. On March 24, 2003,  we
sold  an additional 7 million  shares of ASI common  stock to an investment bank
for 24.4 billion Korean won ($19.5 million based on the spot exchange rate as of
the transaction date) which approximates the carrying value of those shares.  As
part  of that sale, we  purchased a nondeliverable call  option for $6.8 million
that expires December 2003  and is indexed  to ASI's share  price with a  strike
price of $1.97 per share. The net proceeds from the exercise of the option could
be  less than the current carrying value and could expire unexercised losing our
entire investment in the  option. As of  March 24, 2003,  we owned 19.7  million
shares of ASI, or 16% of ASI's voting stock. Beginning March 24, 2003, we ceased
accounting  for our investment in ASI under  the equity method of accounting and
commenced accounting  for  our  investment  as a  marketable  security  that  is
available  for sale.  We intend  to sell  our remaining  investment in  ASI. The
ultimate level of  proceeds from  the sale of  our remaining  investment in  ASI
could be less than the current carrying value.

ABSENCE OF BACKLOG -- WE MAY NOT BE ABLE TO ADJUST COSTS QUICKLY IF OUR
CUSTOMERS' DEMAND FALLS SUDDENLY.

     Our  packaging  and  test  business does  not  typically  operate  with any
material backlog. We expect that in  the future our quarterly net revenues  from
packaging  and  test  will  continue  to  be  substantially  dependent  upon our
customers' demand  in that  quarter. None  of our  customers have  committed  to
purchase  any significant amount of packaging or  test services or to provide us
with binding forecasts of demand for packaging and test services for any  future
period. In addition, our customers could reduce, cancel or delay their purchases
of  packaging and test services.  Because a large portion  of our costs is fixed
and our expense levels are based in part on our expectations of future revenues,
we may  be unable  to adjust  costs in  a timely  manner to  compensate for  any
revenue shortfall.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS -- WE DEPEND ON OUR FACTORIES IN
THE PHILIPPINES, KOREA, JAPAN, TAIWAN AND CHINA. MANY OF OUR CUSTOMERS' AND
VENDORS' OPERATIONS ARE ALSO LOCATED OUTSIDE OF THE U.S.

     We provide packaging and test services through our factories located in the
Philippines,  Korea, Japan, Taiwan  and China. Moreover,  many of our customers'
and vendors' operations are located outside  the U.S. The following are some  of
the risks inherent in doing business internationally:

     - regulatory limitations imposed by foreign governments;

     - fluctuations in currency exchange rates;

                                        44
<PAGE>

     - political, military and terrorist risks;

     - disruptions  or  delays  in  shipments  caused  by  customs  brokers   or
       government agencies;

     - unexpected  changes in regulatory  requirements, tariffs, customs, duties
       and other trade barriers;

     - difficulties in staffing and managing foreign operations; and

     - potentially adverse tax consequences resulting from changes in tax laws.

DIFFICULTIES INTEGRATING ACQUISITIONS -- WE FACE CHALLENGES AS WE INTEGRATE NEW
AND DIVERSE OPERATIONS AND TRY TO ATTRACT QUALIFIED EMPLOYEES TO SUPPORT OUR
GEOGRAPHIC EXPANSION.

     As a  result of  our  geographic expansion  we  have experienced,  and  may
continue  to experience, growth  in the scope and  complexity of our operations.
This growth  has strained  our managerial,  financial, manufacturing  and  other
resources. Future acquisitions and expansions may result in inefficiencies as we
integrate new operations and manage geographically diverse operations.

     Our  success depends to a significant  extent upon the continued service of
our key  senior  management  and  technical personnel,  any  of  whom  would  be
difficult  to replace. Competition  for qualified employees  is intense, and our
business could be adversely affected by the  loss of the services of any of  our
existing  key  personnel. We  cannot  assure you  that  we will  continue  to be
successful in  hiring  and properly  training  sufficient numbers  of  qualified
personnel  and in  effectively managing  our growth.  Our inability  to attract,
retain, motivate and train qualified new personnel could have a material adverse
effect on our business.

DEPENDENCE ON MATERIALS AND EQUIPMENT SUPPLIERS -- OUR BUSINESS MAY SUFFER IF
THE COST OR SUPPLY OF MATERIALS OR EQUIPMENT CHANGES ADVERSELY.

     We obtain from various vendors the materials and equipment required for the
packaging and test services  performed by our factories.  We source most of  our
materials,   including  critical  materials  such  as  leadframes  and  laminate
substrates, from a limited group of  suppliers. Furthermore, we purchase all  of
our materials on a purchase order basis and have no long-term contracts with any
of  our suppliers. Our business may be  harmed if we cannot obtain materials and
other supplies  from our  vendors: (1)  in a  timely manner,  (2) in  sufficient
quantities, (3) in acceptable quality or (4) at competitive prices.

RAPID TECHNOLOGICAL CHANGE -- OUR BUSINESS WILL SUFFER IF WE CANNOT KEEP UP WITH
TECHNOLOGICAL ADVANCES IN OUR INDUSTRY.

     The complexity and breadth of semiconductor packaging and test services are
rapidly  changing.  As a  result,  we expect  that we  will  need to  offer more
advanced package designs in order to respond to competitive industry  conditions
and  customer requirements. Our success depends  upon the ability of our company
to  develop  and  implement  new  manufacturing  processes  and  package  design
technologies.  The need to develop  and maintain advanced packaging capabilities
and equipment could  require significant  research and  development and  capital
expenditures  in future years. In addition, converting to new package designs or
process methodologies could result in delays in producing new package types that
could adversely affect our ability to meet customer orders.

     Technological advances also typically lead  to rapid and significant  price
erosion  and may  make our  existing products  less competitive  or our existing
inventories obsolete. If we cannot achieve advances in package design or  obtain
access  to  advanced package  designs developed  by  others, our  business could
suffer.

COMPETITION -- WE COMPETE AGAINST ESTABLISHED COMPETITORS IN THE PACKAGING AND
TEST BUSINESS.

     The  subcontracted  semiconductor  packaging   and  test  market  is   very
competitive. We face substantial competition from established packaging and test
service   providers  primarily   located  in  Asia,   including  companies  with
significant  manufacturing   capacity,   financial   resources,   research   and
development  operations, marketing and other  capabilities. These companies also
have established relationships with many large

                                        45
<PAGE>

semiconductor companies that are current or potential customers of our  company.
On a larger scale, we also compete with the internal semiconductor packaging and
test capabilities of many of our customers.

ENVIRONMENTAL REGULATIONS -- FUTURE ENVIRONMENTAL REGULATIONS COULD PLACE
ADDITIONAL BURDENS ON OUR MANUFACTURING OPERATIONS.

     The  semiconductor packaging process uses chemicals and gases and generates
byproducts that are subject to extensive governmental regulations. For  example,
at  our foreign manufacturing  facilities, we produce  liquid waste when silicon
wafers are diced  into chips  with the  aid of  diamond saws,  then cooled  with
running  water. Federal,  state and local  regulations in the  United States, as
well as international environmental regulations, impose various controls on  the
storage, handling, discharge and disposal of chemicals used in our manufacturing
processes and on the factories we occupy.

     Increasingly,  public attention has focused  on the environmental impact of
semiconductor manufacturing operations  and the  risk to  neighbors of  chemical
releases   from  such  operations.  In  the  future,  applicable  land  use  and
environmental regulations  may:  (1) impose  upon  us the  need  for  additional
capital  equipment or  other process requirements,  (2) restrict  our ability to
expand our operations, (3) subject  us to liability or  (4) cause us to  curtail
our operations.

PROTECTION OF INTELLECTUAL PROPERTY -- WE MAY BECOME INVOLVED IN INTELLECTUAL
PROPERTY LITIGATION.

     As of March 20, 2003, we held 224 U.S. patents and had 209 pending patents.
In  addition to the U.S. patents, we  held 637 patents in foreign jurisdictions.
We expect to continue  to file patent applications  when appropriate to  protect
our  proprietary technologies,  but we  cannot assure  you that  we will receive
patents from pending or future applications. In addition, any patents we  obtain
may  be challenged, invalidated  or circumvented and  may not provide meaningful
protection or other commercial advantage to us.

     We may need to enforce our patents or other intellectual property rights or
to defend  our company  against claimed  infringement of  the rights  of  others
through  litigation, which could result in substantial cost and diversion of our
resources. The  semiconductor  industry  is  characterized  by  frequent  claims
regarding  patent and  other intellectual  property rights.  If any  third party
makes a valid claim against us, we could be required to:

     - discontinue the use of certain processes;

     - cease the manufacture, use, import and sale of infringing products;

     - pay substantial damages;

     - develop non-infringing technologies; or

     - acquire licenses to the technology we had allegedly infringed.

     If we fail to obtain necessary  licenses or if we face litigation  relating
to  patent  infringement or  other intellectual  property matters,  our business
could suffer.

CONTINUED CONTROL BY EXISTING STOCKHOLDERS -- MR. JAMES KIM AND MEMBERS OF HIS
FAMILY CAN SUBSTANTIALLY CONTROL THE OUTCOME OF ALL MATTERS REQUIRING
STOCKHOLDER APPROVAL.

     As of  February  28,  2003,  Mr.  James  Kim  and  members  of  his  family
beneficially  owned  approximately 44.3%  of our  outstanding common  stock. Mr.
James Kim's  family, acting  together, will  substantially control  all  matters
submitted for approval by our stockholders. These matters could include:

     - the election of all of the members of our board of directors;

     - proxy contests;

     - mergers involving our company;

     - tender offers; and

     - open market purchase programs or other purchases of our common stock.

                                        46
<PAGE>

STOCK PRICE VOLATILITY

     The trading price of our common stock has been and is likely to continue to
be  highly volatile  and could  be subject to  wide fluctuations  in response to
factors such as:

     - actual or anticipated quarter-to-quarter variations in operating results;

     - announcements of technological innovations  or new products and  services
       by Amkor or our competitors;

     - general conditions in the semiconductor industry;

     - changes in earnings estimates or recommendations by analysts; and

     - other events or factors, many of which are out of our control.

     In  addition, the stock  market in general, and  the Nasdaq National Market
and the markets for technology companies in particular, have experienced extreme
price and volume fluctuations. This volatility has affected the market prices of
securities of companies like ours for reasons that have often been unrelated  or
disproportionate  to such  companies' operating performance.  These broad market
fluctuations may adversely affect the market price of our common stock.

ITEM 7a.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     For a  discussion of  information  regarding quantitative  and  qualitative
disclosures  about  market risk,  see "Management's  Discussion and  Analysis of
Financial Condition and Results of Operations -- Market Risk Sensitivity."

                                        47
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     We  present the  information required by  Item 8  of Form 10-K  here in the
following order:

<Table>
<S>                                                           <C>
Report of Independent Accountants...........................   49
Consolidated Statements of Operations -- Years ended
  December 31, 2002, 2001 and 2000..........................   50
Consolidated Balance Sheets -- December 31, 2002 and 2001...   51
Consolidated Statements of Stockholders' Equity -- Years
  ended December 31, 2002, 2001 and 2000....................   52
Consolidated Statements of Cash Flows -- Years ended
  December 31, 2002, 2001 and 2000..........................   53
Notes to Consolidated Financial Statements..................   54
Reports of Independent Public Accountants...................   85
Schedule II -- Valuation and Qualifying Accounts............   87
</Table>

     In addition, pursuant  to General Instruction  G(1) of Form  10-K and  Rule
12b-23  promulgated under the  Securities Exchange Act of  1934, as amended, the
following financial  information  of Anam  Semiconductor,  Inc. required  to  be
included  in  this Report  by Rule  3-09  of Regulation  S-X is  incorporated by
reference from our Report on 8-K filed on March 27, 2003.

Reports of Independent Accountants
Consolidated Balance Sheets -- December 31, 2002 and 2001
Consolidated Statements of Operations -- Years ended December 31, 2002, 2001 and
2000
Consolidated Statements of Stockholders' Equity (Deficit) -- Years ended
December 31, 2002, 2001 and 2000
Consolidated Statements of Cash Flows -- Years ended December 31, 2002, 2001 and
2000
Notes to Consolidated Financial Statements

                                        48
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Amkor Technology, Inc.:

     In  our opinion, based on our audits and the report of another auditor, the
consolidated financial  statements  listed  in the  accompanying  index  present
fairly,  in all material  respects, the financial  position of Amkor Technology,
Inc. and its  subsidiaries at December  31, 2002  and 2001, and  the results  of
their  operations and their cash flows for each of the three years in the period
ended December  31,  2002 in  conformity  with accounting  principles  generally
accepted  in the  United States of  America. These financial  statements are the
responsibility of the Company's management; our responsibility is to express  an
opinion  on these financial statements based on our audits. We did not audit the
financial statements  of  Amkor  Technology Philippines,  Inc.  (formerly  Amkor
Technology  Philippines (P1/P2), Inc. and  Amkor Technology Philippines (P3/P4),
Inc.) a  wholly owned  subsidiary, referred  to herein  as ATP,  which  combined
financial  statements reflect total assets of  14% and operating expenses of 14%
of the related consolidated  totals as of  and for the  year ended December  31,
2002.  The combined financial statements of ATP for 2002 were audited by another
auditor whose report thereon has been furnished to us, and our opinion expressed
herein, insofar as it relates to the  amounts included for ATP, is based  solely
on  the  report of  the other  auditor. The  financial statements  of ATP  as of
December 31, 2001, and for  each of the two years  in the period ended  December
31,  2001  were  audited  by  other  independent  accountants  who  have  ceased
operations. Those independent  accountants expressed an  unqualified opinion  on
those financial statements in their report dated March 19, 2002. In addition, in
our  opinion, the financial statement schedule  listed in the accompanying index
presents fairly, in  all material  respects, the information  set forth  therein
when  read in conjunction with the related consolidated financial statements. We
conducted our audits of these  statements in accordance with auditing  standards
generally  accepted in the United States of  America, which 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, assessing the accounting  principles used and significant  estimates
made by management, and evaluating the overall financial statement presentation.
We  believe  that our  audits  and the  report of  the  other auditor  provide a
reasonable basis for our opinion.

     As discussed  in Note  2 and  Note  3, the  Company adopted  Statements  of
Financial  Accounting Standards No. 142 "Goodwill and Other Intangibles" and No.
144 "Accounting for the Impairment or Disposal of Long-Lived Assets".

PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
January 29, 2003,
except for the information in Note 7
describing the transaction involving
the Company's wafer fabrication
business for which the date is
February 28, 2003 and the sale of the
Company's investment in ASI for
which the date is March 24, 2003

                                        49
<PAGE>

                             AMKOR TECHNOLOGY, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                               FOR THE YEAR ENDED DECEMBER 31,
                                                           ---------------------------------------
                                                              2002          2001          2000
                                                           -----------   -----------   -----------
                                                            (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                        <C>           <C>           <C>
Net revenues.............................................  $1,639,707    $1,517,862    $2,387,294
Cost of revenues -- including purchases from ASI.........   1,521,887     1,448,064     1,782,158
                                                           ----------    ----------    ----------
Gross profit.............................................     117,820        69,798       605,136
                                                           ----------    ----------    ----------
Operating expenses:
  Selling, general and administrative....................     188,567       200,218       192,623
  Research and development...............................      31,189        38,786        26,057
  Loss on disposal of fixed assets, net..................       2,496        14,515         1,355
  Amortization of goodwill and other acquired
     intangibles.........................................       6,992        84,962        63,080
  Special charges........................................     291,970            --            --
                                                           ----------    ----------    ----------
     Total operating expenses............................     521,214       338,481       283,115
                                                           ----------    ----------    ----------
Operating income (loss)..................................    (403,394)     (268,683)      322,021
                                                           ----------    ----------    ----------
Other (income) expense:
  Interest expense, net..................................     147,497       164,064       119,840
  Foreign currency loss..................................         917           872         4,812
  Other income, net......................................        (961)       (3,669)          (60)
                                                           ----------    ----------    ----------
     Total other expense.................................     147,453       161,267       124,592
                                                           ----------    ----------    ----------
Income (loss) before income taxes, equity in loss of
  investees and minority interest........................    (550,847)     (429,950)      197,429
Provision (benefit) for income taxes.....................      65,815       (81,691)       22,285
Equity in loss of investees..............................     (33,865)     (100,706)      (20,991)
Loss on impairment of equity investment..................    (172,533)           --            --
Loss on disposition of equity investment.................      (1,767)           --            --
Minority interest........................................      (1,932)       (1,896)           --
                                                           ----------    ----------    ----------
Net income (loss)........................................  $ (826,759)   $ (450,861)   $  154,153
                                                           ==========    ==========    ==========
Basic net income (loss) per common share.................  $    (5.04)   $    (2.87)   $     1.06
                                                           ==========    ==========    ==========
Diluted net income (loss) per common share...............  $    (5.04)   $    (2.87)   $     1.02
                                                           ==========    ==========    ==========
Shares used in computing net income (loss) per common
  share:
  Basic..................................................     164,124       157,111       145,806
                                                           ==========    ==========    ==========
  Diluted................................................     164,124       157,111       153,223
                                                           ==========    ==========    ==========
</Table>

   The accompanying notes are an integral part of these financial statements.
                                        50
<PAGE>

                             AMKOR TECHNOLOGY, INC.

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                   DECEMBER 31,
                                                              -----------------------
                                                                 2002         2001
                                                              ----------   ----------
                                                                  (IN THOUSANDS)
<S>                                                           <C>          <C>
                                       ASSETS
Current assets:
  Cash and cash equivalents.................................  $  311,249   $  200,057
  Accounts receivable:
     Trade, net of allowance for doubtful accounts of $7,378
      and $6,842............................................     257,081      211,419
     Due from affiliates....................................         298          871
     Other..................................................       8,234        8,953
  Inventories...............................................      72,121       73,784
  Other current assets......................................      48,661       37,106
                                                              ----------   ----------
          Total current assets..............................     697,644      532,190
                                                              ----------   ----------
Property, plant and equipment, net..........................     968,943    1,392,274
                                                              ----------   ----------
Investments.................................................      83,235      382,951
                                                              ----------   ----------
Other assets:
  Due from affiliates.......................................      20,852       20,518
  Goodwill..................................................     628,099      659,130
  Acquired intangibles......................................      45,033       37,050
  Other.....................................................     114,178      199,205
                                                              ----------   ----------
                                                                 808,162      915,903
                                                              ----------   ----------
          Total assets......................................  $2,557,984   $3,223,318
                                                              ==========   ==========
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Bank overdraft............................................  $    4,633   $    5,116
  Short-term borrowings and current portion of long-term
     debt...................................................      71,023       54,815
  Trade accounts payable....................................     180,999      148,923
  Due to affiliates.........................................      70,243       16,936
  Accrued expenses..........................................     184,223      145,544
                                                              ----------   ----------
          Total current liabilities.........................     511,121      371,334
Long-term debt..............................................   1,737,690    1,771,453
Other noncurrent liabilities................................      67,661       64,077
                                                              ----------   ----------
          Total liabilities.................................   2,316,472    2,206,864
                                                              ----------   ----------
Commitments and contingencies
Minority interest...........................................      10,145        7,737
                                                              ----------   ----------
Stockholders' equity:
  Preferred stock, $0.001 par value, 10,000 shares
     authorized designated Series A, none issued............          --           --
  Common stock, $0.001 par value, 500,000 shares authorized,
     issued and outstanding of 165,156 in 2002 and 161,782
     in 2001................................................         166          162
  Additional paid-in capital................................   1,170,227    1,123,541
  Accumulated deficit.......................................    (933,734)    (106,975)
  Receivable from stockholder...............................      (2,887)      (3,276)
  Accumulated other comprehensive loss......................      (2,405)      (4,735)
                                                              ----------   ----------
          Total stockholders' equity........................     231,367    1,008,717
                                                              ----------   ----------
          Total liabilities and stockholders' equity........  $2,557,984   $3,223,318
                                                              ==========   ==========
</Table>

   The accompanying notes are an integral part of these financial statements.
                                        51
<PAGE>

                             AMKOR TECHNOLOGY, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<Table>
<Caption>
                                                                                          ACCUMULATED
                               COMMON STOCK                                RECEIVABLE        OTHER                    COMPREHENSIVE
                             ----------------    PAID-IN     ACCUMULATED      FROM       COMPREHENSIVE                   INCOME
                             SHARES    AMOUNT    CAPITAL       DEFICIT     STOCKHOLDER       LOSS          TOTAL         (LOSS)
                             -------   ------   ----------   -----------   -----------   -------------   ----------   -------------
                                                                         (IN THOUSANDS)
<S>                          <C>       <C>      <C>          <C>           <C>           <C>             <C>          <C>
BALANCE AT DECEMBER 31,
  1999.....................  130,660    $131    $  551,964    $ 189,733      $(3,276)       $  (811)     $  737,741
  Net income...............       --      --            --      154,153           --             --         154,153     $ 154,153
  Unrealized losses on
    investments, net of
    tax....................       --      --            --           --           --           (143)           (143)         (143)
                                                                                                                        ---------
  Comprehensive income.....                                                                                             $ 154,010
                                                                                                                        =========
  Issuance of 20.5 million
    common stock shares and
    3.9 million common
    stock warrants.........   20,500      21       409,980           --           --             --         410,001
  Issuance of stock through
    employee stock purchase
    plan and stock
    options................      710      --         9,622           --           --             --           9,622
  Debt conversion..........      248      --         3,460           --           --             --           3,460
                             -------    ----    ----------    ---------      -------        -------      ----------
BALANCE AT DECEMBER 31,
  2000.....................  152,118     152       975,026      343,886       (3,276)          (954)      1,314,834
  Net loss.................       --      --            --     (450,861)          --             --        (450,861)    $(450,861)
  Unrealized losses on
    investments, net of
    tax....................       --      --            --           --           --           (103)           (103)         (103)
  Cumulative translation
    adjustment.............       --      --            --           --           --         (3,678)         (3,678)       (3,678)
                                                                                                                        ---------
  Comprehensive loss.......                                                                                             $(454,642)
                                                                                                                        =========
  Issuance of stock for
    acquisitions...........    4,948       5        87,869           --           --             --          87,874
  Issuance of stock through
    employee stock purchase
    plan and stock
    options................    1,000       1        11,698           --           --             --          11,699
  Debt conversion..........    3,716       4        48,948           --           --             --          48,952
                             -------    ----    ----------    ---------      -------        -------      ----------
BALANCE AT DECEMBER 31,
  2001.....................  161,782     162     1,123,541     (106,975)      (3,276)        (4,735)      1,008,717
  Net loss.................       --      --            --     (826,759)          --             --        (826,759)    $(826,759)
  Unrealized loss on
    investments, net of
    tax....................       --      --            --           --           --         (1,224)         (1,224)       (1,224)
  Cumulative translation
    adjustment.............       --      --            --           --           --          3,554           3,554         3,554
                                                                                                                        ---------
  Comprehensive loss.......                                                                                             $(824,429)
                                                                                                                        =========
  Issuance of stock for
    acquisitions...........    1,827       2        35,200           --           --             --          35,202
  Issuance of stock through
    employee stock purchase
    plan and stock
    options................    1,547       2        11,486           --           --             --          11,488
  Payment received from
    stockholder............       --      --            --           --          389             --             389
                             -------    ----    ----------    ---------      -------        -------      ----------
BALANCE AT DECEMBER 31,
  2002.....................  165,156    $166    $1,170,227    $(933,734)     $(2,887)       $(2,405)     $  231,367
                             =======    ====    ==========    =========      =======        =======      ==========
</Table>

   The accompanying notes are an integral part of these financial statements.
                                        52
<PAGE>

                             AMKOR TECHNOLOGY, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                FOR THE YEAR ENDED DECEMBER 31,
                                                              -----------------------------------
                                                                2002        2001         2000
                                                              ---------   ---------   -----------
                                                                        (IN THOUSANDS)
<S>                                                           <C>         <C>         <C>
Cash flows from operating activities:
  Net income (loss).........................................  $(826,759)  $(450,861)  $   154,153
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities --
    Depreciation and amortization...........................    325,345     442,762       325,896
    Amortization of deferred debt issuance costs............      8,251      22,321         7,013
    Debt conversion expense.................................         --          --           272
    Provision for accounts receivable.......................        756       4,000           (17)
    Provision for excess and obsolete inventory.............      5,841      17,869        10,000
    Deferred income taxes...................................     72,719     (85,022)       (8,255)
    Equity in loss of investees.............................     33,865     100,706        20,991
    Loss on impairment of equity investment.................    172,533          --            --
    Loss on disposition of equity investment................      1,767          --            --
    Loss on disposal of fixed assets, net...................      2,496      14,515         1,355
    Asset impairment charges and facility closure costs.....    284,602       3,600            --
    Minority interest.......................................      1,932       1,896            --
  Changes in assets and liabilities excluding effects of
    acquisitions --
    Accounts receivable.....................................    (40,850)    103,157       (72,914)
    Repurchase of accounts receivable and settlement of
      security agreement....................................         --          --       (71,500)
    Other receivables.......................................        719      (2,488)        2,884
    Inventories.............................................        218      31,372       (23,871)
    Due to/from affiliates, net.............................     53,546     (10,340)        2,110
    Other current assets....................................     (2,207)      6,069       (17,977)
    Other non-current assets................................     19,433       1,700       (19,582)
    Accounts payable........................................     28,064     (24,081)       15,950
    Accrued expenses........................................     25,781     (24,720)       40,209
    Other long-term liabilities.............................      8,425       8,011         7,108
                                                              ---------   ---------   -----------
      Net cash provided by operating activities.............    176,477     160,466       373,825
                                                              ---------   ---------   -----------
Cash flows from investing activities:
  Purchases of property, plant and equipment................    (95,104)   (158,700)     (480,074)
  Acquisitions, net of cash acquired........................    (18,459)    (11,057)      (17,602)
  Acquisitions of K1, K2 and K3 and K4, net of cash
    acquired................................................         --          --      (927,290)
  Investment in ASI.........................................         --          --      (459,000)
  Proceeds from the sale of property, plant and equipment...      2,870       1,863         2,823
  Proceeds from disposition of equity investment............     58,139          --            --
  Proceeds from the sale (purchase) of investments..........     (2,011)       (321)      136,879
                                                              ---------   ---------   -----------
      Net cash used in investing activities.................    (54,565)   (168,215)   (1,744,264)
                                                              ---------   ---------   -----------
Cash flows from financing activities:
  Net change in bank overdrafts and short-term borrowings...      6,189      15,067         5,975
  Net proceeds from issuance of long-term debt..............         --     750,486     1,027,479
  Payments of long-term debt................................    (30,119)   (662,565)      (87,166)
  Net proceeds from the issuance of 20.5 million common
    shares..................................................         --          --       410,001
  Proceeds from issuance of stock through employee stock
    purchase plan and stock options.........................     11,488      11,698         9,622
  Payment received from stockholder.........................        389          --            --
                                                              ---------   ---------   -----------
      Net cash provided by financing activities.............    (12,053)    114,686     1,365,911
                                                              ---------   ---------   -----------
Effect of exchange rate fluctuations on cash and cash
  equivalents...............................................      1,333        (397)           --
                                                              ---------   ---------   -----------
Net increase (decrease) in cash and cash equivalents........    111,192     106,540        (4,528)
Cash and cash equivalents, beginning of period..............    200,057      93,517        98,045
                                                              ---------   ---------   -----------
Cash and cash equivalents, end of period....................  $ 311,249   $ 200,057   $    93,517
                                                              =========   =========   ===========
Supplemental disclosures of cash flow information:
  Cash paid (received) during the period for:
    Interest................................................  $ 142,299   $ 144,345   $   111,429
    Income taxes............................................  $    (845)  $    (642)  $    18,092
</Table>

   The accompanying notes are an integral part of these financial statements.
                                        53
<PAGE>

                             AMKOR TECHNOLOGY, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  BASIS OF PRESENTATION

     The  consolidated  financial  statements  include  the  accounts  of  Amkor
Technology, Inc.  and its  subsidiaries. The  consolidated financial  statements
reflect   the  elimination   of  all   significant  intercompany   accounts  and
transactions. The investments in and the  operating results of 20% to 50%  owned
companies are included in the consolidated financial statements using the equity
method of accounting.

     The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect  the amounts reported  in the  financial statements and
accompanying notes. Actual  results could differ  from those estimates.  Certain
previously  reported amounts have been reclassified  to conform with the current
presentation.

  FOREIGN CURRENCY TRANSLATION

     The U.S.  dollar  is  the  functional  currency  of  the  majority  of  our
subsidiaries  in Korea and  the Philippines, and the  foreign currency asset and
liability amounts  at these  subsidiaries are  remeasured into  U.S. dollars  at
end-of-period  exchange rates, except for nonmonetary items which are remeasured
at historical  rates. Foreign  currency income  and expenses  are remeasured  at
average exchange rates in effect during the year, except for expenses related to
balance  sheet amounts remeasured  at historical exchange  rates. Exchange gains
and losses arising from  remeasurement of foreign currency-denominated  monetary
assets  and liabilities are included in other  income (expense) in the period in
which they occur.

     The local currency is the functional currency of our subsidiaries in Japan,
Taiwan and China, and the asset and liability amounts of these subsidiaries  are
translated  into  U.S. dollars  at end-of-period  exchange rates.  The resulting
translation adjustments  are  reported  as  a  component  of  accumulated  other
comprehensive  loss in the  stockholders' equity section  of the balance sheets.
Assets and liabilities denominated in currency other than the local currency are
remeasured into the local currency prior  to translation into U.S. dollars,  and
the resultant exchange gains or losses are included in other income (expense) in
the  period in which  they occur. Income  and expenses are  translated into U.S.
dollars at average exchange rates in effect during the period.

  CONCENTRATIONS OF CREDIT RISK

     Financial instruments, for  which we  are subject to  credit risk,  consist
principally  of  accounts  receivable,  cash  and  cash  equivalents, short-term
investments and marketable securities. With  respect to accounts receivable,  we
mitigate  our credit  risk by selling  primarily to  well established companies,
performing  ongoing  credit  evaluations   and  making  frequent  contact   with
customers.  We have historically mitigated our  credit risk with respect to cash
and cash equivalents, as well as short-term investments, through diversification
of our holdings into various money market accounts, U.S. treasury bonds, federal
mortgage backed securities,  high grade  municipal bonds,  commercial paper  and
preferred stocks.

  RISKS AND UNCERTAINTIES

     Our   future  results  of   operations  involve  a   number  of  risks  and
uncertainties. Factors  that could  affect future  operating results  and  cause
actual  results to vary materially from  historical results include, but are not
limited to,  dependence  on the  highly  cyclical nature  of  the  semiconductor
industry, the continuing negative impacts of the unprecedented industry downturn
beginning  in 2001, our high leverage and the restrictive covenants contained in
the agreements governing our indebtedness, uncertainty as to the demand from our
customers over both the long-  and short-term, competitive pricing and  declines
in  average  selling  prices we  experience,  the  timing and  volume  of orders
relative to our production capacity, the  absence of significant backlog in  our
business,  fluctuations in manufacturing yields,  the availability of financing,
our competition, our

                                        54
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

dependence on international operations and sales, our dependence on raw material
and equipment  suppliers,  exchange rate  fluctuations,  our dependence  on  key
personnel,   difficulties   integrating   acquisitions,   the   enforcement   of
intellectual property rights by or against us, our need to comply with  existing
and  future environmental regulations,  the results of  Anam Semiconductor, Inc.
("ASI")  as  it  impacts  our  financial  results  and  political  and  economic
uncertainty resulting from terrorist activities.

  CASH AND CASH EQUIVALENTS

     We  consider all highly liquid investments  with a maturity of three months
or less when purchased to be cash equivalents.

  INVENTORIES

     Inventories are stated at the lower  of cost or market. Cost is  determined
principally  by using a moving average method. In general we order raw materials
based on the  customers forecasted demand  and we do  not maintain any  finished
goods  inventory. If our  customers change their  forecasted requirements and we
are unable to cancel our raw materials  order or if our vendor requires that  we
order  a minimum  quantity that exceeds  the current forecasted  demand, we will
experience a build-up in raw material inventory. We will either seek to  recover
the  cost  of the  materials  from our  customers  or utilize  the  inventory in
production. However, we may  not be successful in  recovering the cost from  our
customers  or being  able to  use the  inventory in  production, which  we would
consider as part of  our reserve estimate. Our  reserve for excess and  obsolete
inventory  is based on forecasted  demand we receive from  our customers. When a
determination is made that the inventory  will not be utilized in production  it
is written-off and disposed.

  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:

<Table>
<S>                                                           <C>
Buildings and improvements..................................  10 to 30 years
Machinery and equipment.....................................    3 to 7 years
Furniture, fixtures and other equipment.....................   3 to 10 years
</Table>

     Effective with the fourth quarter of 2002, we changed the estimated  useful
lives  of certain of our packaging equipment  from four years to seven years for
depreciation purposes, which is in line  with our historical usage. This  change
decreased our net loss by approximately $16.7 million, or $0.10 per share. There
was  no offsetting impact to  our tax provision related  to the change in useful
lives because of our consolidated net losses  for 2002 and our recognition of  a
valuation allowance against the associated net operating loss carryforwards (see
Note 17).

     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 $317.6  million, $356.7  million and  $262.0
million for 2002, 2001 and 2000, respectively.

  GOODWILL AND ACQUIRED INTANGIBLES

     Goodwill  is  recorded when  the cost  of an  acquisition exceeds  the fair
market value of the net tangible and identifiable intangible assets acquired. On
January 1, 2002, we adopted SFAS No. 142, "Goodwill and Other Intangible Assets"
(see Note  4). The  new  standard requires  that goodwill  and  indefinite-lived
intangible   assets  no   longer  be   amortized.  In   addition,  goodwill  and
indefinite-lived intangible assets are tested for impairment at least  annually.
These  tests are performed  more frequently if  warranted. Impairment losses are
recorded when

                                        55
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the carrying amount of goodwill exceeds its implied fair value. Such  impairment
losses are recorded as a part of income from continuing operations.

     Definite-lived  intangible assets  include acquired  patents and technology
rights and are amortized  on a straight-line basis  over their estimated  useful
lives, generally for periods ranging from 5 to 10 years. We continually evaluate
the reasonableness of the useful lives of these assets. The unamortized balances
recorded  for  acquired  intangibles are  evaluated  periodically  for potential
impairment. An impairment loss, if any, would  be measured as the excess of  the
carrying  value over the  fair value. Such  impairment losses are  recorded as a
part of income from continuing operations.

  OTHER NONCURRENT ASSETS

     Other noncurrent assets consist principally  of a note receivable which  is
related  to our sale of ASI stock to Dongbu (see Note 7), deferred debt issuance
costs, security deposits, the cash  surrender value of life insurance  policies,
deferred  income taxes and tax credits. As discussed in Note 17, significant tax
valuation allowances related  to our  deferred tax assets  were recorded  during
2002.

  DUE FROM AND TO AFFILIATES

     Due  from affiliates  primarily relates  to advances  made to  a Philippine
realty corporation in which we own  40%. Such investment is accounted for  under
the equity method of accounting. Given the foreign ownership restrictions in the
Philippines,  the  affiliated  entity  owns the  land  on  which  our Philippine
factories are located. The affiliated entity has no long-term obligations  other
than  their  obligations to  us and  we  have not  extended guarantees  or other
commitments  to  the  entity.  Due  to  affiliates  primarily  relates  to   our
transactions with Anam Semiconductor, Inc. (see Note 7).

  OTHER NONCURRENT LIABILITIES

     Other  noncurrent liabilities  consist primarily  of Korean  severance plan
obligations, Philippine and Taiwanese pension obligations and noncurrent  income
taxes payable.

  RECEIVABLE FROM STOCKHOLDER

     Amkor  Electronics, Inc.  ("AEI"), which was  merged into  our company just
prior to the initial public offering of  our company in May 1998, elected to  be
taxed  as an S Corporation under the  provisions of the Internal Revenue Code of
1986 and comparable  state tax provisions.  As a result,  AEI did not  recognize
U.S. federal corporate income taxes. Instead, the stockholders of AEI were taxed
on  their proportionate share of AEI's taxable income. Accordingly, no provision
for U.S. federal income taxes  was recorded for AEI.  Just prior to the  initial
public  offering, AEI  terminated its  S Corporation  status at  which point the
profits of AEI became subject to federal and state income taxes at the corporate
level.  We  consummated  a  tax   indemnification  agreement  between  us,   our
predecessor and James Kim and his family (collectively, the "Kim Family"). James
Kim,  is our  founder and significant  stockholder, and currently  serves as our
Chairman and CEO. Under  the terms of the  tax indemnification agreement,  Amkor
indemnified  the former owners of AEI for  the settlement of AEI's S Corporation
federal and  state tax  returns  and any  adjustments  to the  reported  taxable
income.

     At  the time AEI was  converted to a C Corporation,  AEI and the Kim Family
identified certain  federal  and  state tax  overpayments  associated  with  the
results  of AEI during  S Corporation status  years, and AEI,  in May 1998, paid
such amounts to the Kim Family. These amounts, which principally related to  the
finalization  of AEI's  federal tax return,  are reflected as  a receivable from
stockholder in the stockholders'  equity section of our  balance sheets. As  the
refunds  are paid by the  associated taxing authorities and  received by the Kim
Family, the Kim Family, in  turn, remits the funds  to Amkor. During 2002,  $0.4
million of tax refunds were

                                        56
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

received  by the Kim Family and used to  pay down the stockholder loan. The loan
balance will be further reduced as  AEI's tax returns are finalized and  refunds
remitted by the associated taxing authorities.

  REVENUE RECOGNITION AND RISK OF LOSS

     Our  company  does not  take  ownership of  customer-supplied semiconductor
wafers. Title and risk of loss remains with the customer for these materials  at
all  times.  Accordingly, the  cost of  the  customer-supplied materials  is not
included in  the  consolidated  financial statements.  Revenues  from  packaging
semiconductors  and  performing test  services are  recognized upon  shipment or
completion of the services. We  record wafer fabrication services revenues  upon
shipment  of completed wafers.  Such policies are  consistent with provisions in
the Securities  and Exchange  Commission's Staff  Accounting Bulletin  No.  101,
"Revenue Recognition in Financial Statements."

  STOCK COMPENSATION

     We  apply Accounting Principles  Board ("APB") Opinion  No. 25, "Accounting
for Stock Issued to Employees," and related Interpretations, to our stock option
plans. These stock  option plans  are discussed more  fully in  Note 19,  "Stock
Compensation  Plans."  No  compensation  expense  has  been  recognized  for our
employee stock options  that have been  granted. If compensation  costs for  our
stock option plans had been determined using the fair value method of accounting
as  set forth  in SFAS No.  123, "Accounting for  Stock-Based Compensation," our
reported net  income  (loss) and  earnings  (loss)  per share  would  have  been
reduced.

     The  following  table  illustrates  the effect  on  net  income  (loss) and
earnings (loss) per share as if the fair value based method had been applied  to
all outstanding and unvested awards in each period.

<Table>
<Caption>
                                                          FOR THE YEAR ENDED DECEMBER 31,
                                                     -----------------------------------------
                                                         2002           2001          2000
                                                     ------------   ------------   -----------
                                                      (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S>                                                  <C>            <C>            <C>
Net income (loss):
  Net income (loss), as reported...................   $(826,759)     $(450,861)     $154,153
  Deduct:
  Total stock-based employee compensation
     determined under fair value based method, net
     of related tax effects........................     (41,470)       (29,619)      (26,572)
                                                      ---------      ---------      --------
  Net income, pro forma............................   $(868,229)     $(480,480)     $127,581
                                                      =========      =========      ========
Earnings (loss) per share:
  Basic:
     As reported...................................       (5.04)         (2.87)         1.06
     Pro forma.....................................       (5.29)         (3.06)         0.88
  Diluted:
     As reported...................................       (5.04)         (2.87)         1.02
     Pro forma.....................................       (5.29)         (3.06)         0.85
</Table>

     For  the 2002 pro forma net loss of $868.2 million, there was no offsetting
impact to our tax provision related to the pro forma Black-Scholes stock  option
expense because of our consolidated net losses for 2002 and our recognition of a
valuation allowance against the associated net operating loss carryforwards (see
Note 17).

                                        57
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  RESEARCH AND DEVELOPMENT COSTS

     Research  and development  expenses include costs  directly attributable to
the conduct  of  research and  development  programs primarily  related  to  the
development of new package designs and improving the efficiency and capabilities
of  our existing production process. Such costs include salaries, payroll taxes,
employee benefit costs, materials, supplies, depreciation on and maintenance  of
research  equipment,  fees  under  licensing  agreements,  services  provided by
outside contractors, and the allocable portions of facility costs such as  rent,
utilities,  insurance, repairs and maintenance, depreciation and general support
services. All costs  associated with  research and development  are expensed  as
incurred.

  RECENTLY ISSUED ACCOUNTING STANDARDS

     In  2002,  the Financial  Accounting Standards  Board ("FASB")  issued FASB
Interpretation  ("FIN")   No.  45,   "Guarantor's  Accounting   and   Disclosure
Requirements  for Guarantees,  Including Indirect Guarantees  of Indebtedness of
Others." The initial recognition and measurement provisions of FIN No. 45  apply
on a prospective basis to guarantees issued or modified after December 31, 2002.
As  required, we have adopted the disclosure requirements of this interpretation
as of December 31, 2002 (see Note 21). We will apply the initial recognition and
measurement provisions on a  prospective basis effective  January 1, 2003.  This
interpretation modifies existing disclosure requirements for most guarantees and
requires  that  at the  time  a company  issues  a guarantee,  the  company must
recognize an initial liability for the  fair value of the obligation it  assumes
under  that guarantee. We are  in the process of  evaluating the recognition and
measurement provisions of the Interpretation  and absent any unforeseen  events,
we  do not expect that the adoption  of these provisions will have a significant
impact on our financial condition, liquidity or results of operations.

     In January 2003,  the FASB issued  FIN No. 46,  "Consolidation of  Variable
Interest  Entities." The primary objective of FIN  No. 46 is to provide guidance
on the  identification of,  and  financial reporting  for, entities  over  which
control  is achieved through  means other than voting  rights; such entities are
known as  variable interest  entities.  FIN No.  46 requires  variable  interest
entities  to be consolidated by the primary beneficiary of the variable interest
entities and expands disclosure requirements for both variable interest entities
that are  consolidated as  well as  those  within which  an enterprise  holds  a
significant  variable  interest. FIN  No. 46  is  effective immediately  for all
variable interest entities created after January  31, 2003, and is effective  no
later  than  the  beginning of  the  first  interim or  annual  reporting period
beginning after June 15, 2003 for  all variable interest entities created  prior
to February 1, 2003.

     We  have variable  interests in  certain Philippine  realty corporations in
which we have a 40% ownership and from  whom we lease land and buildings in  the
Philippines.  The assets and liabilities of these Philippine realty corporations
are not currently consolidated within  our financial statements. As of  December
31,  2002, the combined book value of the assets and liabilities associated with
these Philippine realty corporations were  $21.7 million and $23.9 million.  Our
maximum  exposure related to these variable  interest entities is limited by our
investments and loans to these entities of $21.2 million at December 31, 2002.

     In addition to our interests in the Philippine realty corporations, we  are
currently  reviewing our interests in other entities to determine whether any of
these entities would be variable interest entities. The maximum exposure to loss
as a result of  our involvement with any  additional variable interest  entities
identified  is not expected  to be an  amount materially in  excess of interests
currently reflected in our consolidated balance sheet.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated  with Exit or Disposal Activities."  SFAS No. 146 addresses financial
accounting and reporting for costs  associated with exit or disposal  activities
and supercedes Emerging Issues Task Force Issue No. 94-3, "Liability Recognition
for  Certain Employee Termination  Benefits and Other Costs  to Exit an Activity
(including Certain Costs Incurred  in a Restructuring)."  SFAS No. 146  requires
that  a liability for a cost associated  with an exit or disposal activity shall
be recognized and measured initially  at its fair value  in the period in  which
the liability is
                                        58
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

incurred  rather than when a company commits  to such an activity. We will adopt
this standard  beginning with  exit or  disposal activities  that are  initiated
after December 31, 2002.

     In  January 2003,  the Emerging  Issues Task  Force issued  Issue No. 00-21
"Revenue Arrangements  with Multiple  Deliverables." Issue  No. 00-21  primarily
addresses  certain aspects of the accounting  by a vendor for arrangements under
which it will perform  multiple revenue-generating activities. Specifically,  it
addresses   how  to   determine  whether   an  arrangement   involving  multiple
deliverables contains more than  one unit of accounting.  In applying Issue  No.
00-21,  separate  contracts with  the same  entity or  related parties  that are
entered into at or near the same time are presumed to have been negotiated as  a
package  and  should,  therefore,  be  evaluated  as  a  single  arrangement  in
considering whether there are one or more units of accounting. That  presumption
may be overcome if there is sufficient evidence to the contrary. Issue No. 00-21
also addresses how arrangement consideration should be measured and allocated to
the separate units of accounting in the arrangement. The provisions of Issue No.
00-21  are effective  for revenue  arrangements entered  into in  fiscal periods
beginning after  June 15,  2003. We  are currently  evaluating the  impact  this
statement will have on our financial position or results of operations.

2.  SPECIAL CHARGES

     Special charges consist of the following:

<Table>
<Caption>
                                                                YEAR ENDED
                                                               DECEMBER 31,
                                                                   2002
                                                              --------------
                                                              (IN THOUSANDS)
<S>                                                           <C>
Impairment of long-lived assets (Note 3)....................     $190,266
Impairment of goodwill (Note 4).............................       73,080
Lease termination and other exit costs (Note 5).............       28,624
                                                                 --------
                                                                 $291,970
                                                                 ========
</Table>

3.  SFAS NO. 144, ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS

     In August 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment
or  Disposal of Long-Lived Assets," which supersedes SFAS No. 121. This standard
provides a single accounting  model for long-lived assets  to be disposed of  by
sale  and establishes additional criteria that would  have to be met to classify
an asset as held for sale. The carrying amount of an asset or asset group is not
recoverable if it  exceeds the sum  of the undiscounted  cash flows expected  to
result  from  the use  and eventual  disposition  of the  asset or  asset group.
Estimates of future cash flows used  to test the recoverability of a  long-lived
asset or asset group must incorporate the entity's own assumptions about its use
of  the asset or asset group and must factor in all available evidence. SFAS No.
144 requires that long-lived assets be tested for recoverability whenever events
or changes  in  circumstances indicate  that  its  carrying amount  may  not  be
recoverable.  Such events include significant  under-performance relative to the
expected historical or projected  future operating results; significant  changes
in  the manner of use  of the assets; significant  negative industry or economic
trends and significant changes in market capitalization.

     Although significant recovery  was noted  in our  company's core  packaging
services during the second quarter of 2002, our test services assets and several
non-core packaging services assets remained at low utilization rates relative to
our  projections, and  are no  longer expected  to reach  previously anticipated
utilization  levels.  In  addition,  during  the  second  quarter  of  2002,  we
experienced  a significant  decline in  our market  capitalization. These events
triggered an impairment  review in  accordance with  SFAS No.  144. This  review
included  a company-wide evaluation  of underutilized assets  that could be sold
and a detailed update of our operating and cash flow projections. As a result of
this analysis, we identified  $19.8 million of test  and packaging fixed  assets
that  we expect  to dispose  by June  30, 2003.  We recognized  an $18.7 million
impairment

                                        59
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

charge to reduce the carrying value of the test and packaging fixed assets to be
disposed to their fair value less cost to  sell. Fair value of the assets to  be
disposed  was determined with the assistance  of an appraisal firm and available
information on the resale  value of the equipment.  Additionally, we tested  for
impairment  our  long-lived  test  assets  that  are  held  and  used, including
intangible assets that we are  amortizing, and certain non-core packaging  fixed
assets  that are held and used. For the  test and packaging assets that are held
and used,  we  recognized a  $171.6  million  impairment charge  to  reduce  the
carrying  value of those  assets to fair  value, including $4.8  million for the
impairment of test services patents and technology rights. An appraisal firm was
engaged to assist in the determination of the fair value of the assets held  for
use.  The determination of fair value was  based on projected cash flows using a
discount rate commensurate with the risk involved.

4.  SFAS NO. 141, BUSINESS COMBINATIONS AND SFAS NO. 142, GOODWILL AND OTHER
    INTANGIBLE ASSETS

     In June 2001, the  FASB issued SFAS No.  141, Business Combinations,  which
prohibits   the   pooling-of-interests   method  of   accounting   for  business
combinations initiated  after June  30, 2001  and addresses  the accounting  for
purchase  method business  combinations completed after  June 30,  2001. Also in
June 2001, the FASB issued SFAS  No. 142, Goodwill and Other Intangible  Assets.
For  existing acquisitions, the provisions of SFAS  No. 142 were effective as of
January 1, 2002 and are generally effective for business combinations  initiated
after   June  30,  2001.   SFAS  No.  142   includes  provisions  regarding  the
reclassification  of  certain  existing  recognized  intangibles  as   goodwill,
reassessment  of  the  useful  lives  of  existing  recognized  intangibles, the
cessation of amortization related to goodwill and indefinite-lived  intangibles,
and  the testing  for impairment of  goodwill and other  intangibles annually or
more frequently if  circumstances warrant. Additionally,  SFAS No. 142  requires
that  within six  months of  adoption of  SFAS No.  142, goodwill  be tested for
impairment at the reporting unit level as of the date of adoption.

     We adopted SFAS No.  142 as of  January 1, 2002  and we reclassified  $30.0
million  of intangible  assets previously  identified as  an assembled workforce
intangible to goodwill.  Additionally at adoption  of SFAS No.  142, we  stopped
amortizing  goodwill of  $659.1 million, as  well as goodwill  of $118.6 million
associated with our investment in ASI  accounted for under the equity method  of
accounting.  The  as  adjusted  financial  information  below  assumes  that the
cessation of amortization occurred as of January 1, 2001.

                                        60
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                          FOR THE YEAR ENDED DECEMBER 31,
                                                     -----------------------------------------
                                                         2002           2001          2000
                                                     ------------   ------------   -----------
                                                      (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S>                                                  <C>            <C>            <C>
Net income (loss), reported........................   $(826,759)     $(450,861)     $154,153
                                                      ---------      ---------      --------
Goodwill and assembled workforce amortization......          --         80,232        60,003
Goodwill related to equity investments.............          --         35,544        24,910
                                                      ---------      ---------      --------
                                                             --        115,776        84,913
                                                      ---------      ---------      --------
Net income (loss), as adjusted.....................   $(826,759)     $(335,085)     $239,066
                                                      =========      =========      ========
Basic net income (loss) per share, reported........   $   (5.04)     $   (2.87)     $   1.06
                                                      ---------      ---------      --------
Goodwill and assembled workforce amortization......          --           0.51          0.41
Goodwill related to equity investments.............          --           0.23          0.17
                                                      ---------      ---------      --------
                                                             --           0.74          0.58
                                                      ---------      ---------      --------
Basic net income (loss) per share, as adjusted.....   $   (5.04)     $   (2.13)     $   1.64
                                                      =========      =========      ========
Diluted net income (loss) per share, reported......   $   (5.04)     $   (2.87)     $   1.02
                                                      ---------      ---------      --------
Goodwill and assembled workforce amortization......          --           0.51          0.39
Goodwill related to equity investments.............          --           0.23          0.16
                                                      ---------      ---------      --------
                                                             --           0.74          0.55
                                                      ---------      ---------      --------
Diluted net income (loss) per share, as adjusted...   $   (5.04)     $   (2.13)     $   1.58
                                                      =========      =========      ========
</Table>

     As  of the adoption date of the standard, we reassessed the useful lives of
our identified intangibles  and they  continue to be  appropriate. Goodwill  and
other  intangible assets are attributable to  two reporting units, packaging and
test services.  We  completed the  initial  impairment test  during  the  second
quarter  of 2002.  Based on the  comparison of  the fair value  of the reporting
units with  their respective  carrying values  each as  of January  1, 2002,  we
concluded  that  goodwill  associated  with  our  packaging  and  test  services
reporting units was not impaired as  of adoption. An appraisal firm was  engaged
to  assist in the  determination of the  fair value of  our reporting units. The
determination of fair value was based  on projected cash flows using a  discount
rate commensurate with the risk involved.

     SFAS  No. 142  provides that  goodwill of  a reporting  unit be  tested for
impairment on an annual basis and between annual tests in certain  circumstances
including  a significant adverse change in  the business climate and testing for
recoverability of  long-lived  assets.  Our test  services  assets  and  several
non-core  packaging services assets remained at low utilization rates during the
second quarter  of  2002  and  were  no  longer  expected  to  reach  previously
anticipated   utilization  levels.  As  discussed  in  Note  3,  we  tested  the
recoverability of such assets as of June  30, 2002 and concluded that a  portion
of  those assets was impaired. Accordingly,  we retested goodwill for impairment
as of June 30,  2002, and concluded  that the carrying value  of the assets  and
liabilities  associated with the test services  reporting unit exceeded its fair
value. As of June  30, 2002, we recognized  a $73.1 million goodwill  impairment
charge.  Such impairment charge was measured by comparing the implied fair value
of the goodwill associated with the test services reporting unit to its carrying
value. An appraisal firm was engaged to assist in the determination of the  fair
value  of our  reporting units.  The determination  of fair  value was  based on
projected cash flows using a discount rate commensurate with the risk involved.

                                        61
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The changes in  the carrying  value of goodwill  by reporting  unit are  as
follows:

<Table>
<Caption>
                                                        PACKAGING     TEST
                                                        SERVICES    SERVICES    TOTAL
                                                        ---------   --------   --------
                                                                (IN THOUSANDS)
<S>                                                     <C>         <C>        <C>
Balance as of January 1, 2002.........................  $586,344    $72,786    $659,130
Goodwill acquired.....................................    40,890         --      40,890
Goodwill impairment...................................        --    (73,080)    (73,080)
Translation adjustments...............................       865        294       1,159
                                                        --------    -------    --------
Balance as of December 31, 2002.......................  $628,099    $    --    $628,099
                                                        ========    =======    ========
</Table>

5.  RESTRUCTURING CHARGES

     During   2002,  we  recorded  $28.6  million  of  charges  related  to  the
consolidation of our worldwide facilities to increase operational efficiency and
reduce costs. The charges were comprised of $20.8 million to write-off leasehold
improvements and other long-lived assets and $7.8 million for lease  termination
and other exit costs. Our consolidation efforts included:

     - Transferring  the packaging operations  at our K2  site in Bucheon, South
       Korea into our  K4 factory  in Kwangju, South  Korea and  closing the  K2
       facility;

     - Merging our factory operations in Taiwan into a single location; and

     - Consolidating  select U.S. office locations and closing our San Jose test
       facility.

     The charges associated with the consolidation initiatives in Korea,  Taiwan
and  the U.S. were $10.0 million,  $13.8 million and $4.8 million, respectively.
We expect to complete the closing of  the K2 facility during the second  quarter
of  2003 and the  other activities were substantially  completed during 2002. Of
the total $28.6  million restructuring  charges recorded in  2002, $6.1  million
remains  outstanding  as  of December  31,  2002. The  outstanding  liability is
principally future lease payments of which  $4.3 million is expected to be  paid
during  2003. The remaining lease payments are  expected to be paid through 2007
unless the leases can be terminated earlier.

6.  ACQUISITIONS IN JAPAN AND TAIWAN

     In April 2002, we acquired the semiconductor packaging business of  Citizen
Watch  Co., Ltd. located in the Iwate prefecture in Japan. The business acquired
includes a manufacturing facility, over 80 employees and intellectual  property.
The  purchase price  included a  $7.8 million  cash payment  at closing.  We are
required to make additional payments one year from closing for the amount of the
deferred purchase price as well as contingent payments. Based on the  resolution
of  the contingency as of January 2003,  the total amount of additional payments
due in April 2003 is 1.7 billion  Japanese yen ($14.3 million based on the  spot
exchange  rate at  December 31, 2002).  We recorded $19.6  million of intangible
assets for patent rights that  are amortizable over 7  years. The fair value  of
the other assets acquired and liabilities assumed was approximately $2.5 million
for  fixed assets, $0.1 million for inventory and other assets and $14.2 million
for the deferred  purchase price payment  and minimum amount  of the  contingent
payments. Such net assets principally relate to our packaging services reporting
unit.

     In October 2002, we terminated negotiations with Fujitsu Limited to acquire
Fujitsu's packaging and test operation in Kagoshima, Japan pursuant to the April
2002 memorandum of understanding between our company and Fujitsu.

     In  January  2002,  we  acquired  Agilent  Technologies,  Inc.'s  packaging
business related to semiconductor packages utilized in printers for $2.8 million
in   cash.   The   acquired   tangible   assets   were   integrated   into   our

                                        62
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

existing manufacturing facilities. The purchase price was principally  allocated
to  the tangible assets of our packaging services reporting unit. Our results of
operations were not significantly impacted by this acquisition.

     In July  2001,  we  acquired,  in  separate  transactions,  69%  of  Taiwan
Semiconductor  Technology Corporation  ("TSTC") and  98% of  Sampo Semiconductor
Corporation ("SSC") in Taiwan. Including  our prior ownership interest in  TSTC,
our  ownership increased to 94% of the  outstanding shares of TSTC. The combined
purchase price was paid with  the issuance of 4.9  million shares of our  common
stock valued at $87.9 million based on our closing share price two days prior to
each  acquisition, the assumption of  $34.8 million of debt  and $3.7 million of
cash consideration,  net of  acquired  cash. The  carrying  value of  our  prior
investment in TSTC was $17.8 million. We recorded intangible assets, principally
goodwill, of $23.8 million as of the acquisition date that is nonamortizable. In
connection  with earn-out provisions that provided for additional purchase price
based in part on the  results of the acquisitions,  we issued an additional  1.8
million  shares  in January  2002 and  recorded an  additional $35.2  million in
goodwill. The combined fair value of the assets acquired and liabilities assumed
was approximately $95.3  million for  fixed assets, $39.5  million for  accounts
receivable,  inventory and other assets, $34.8 million of assumed debt and $10.1
million  for  other  assumed  liabilities.  The  minority  interest  as  of  the
acquisition  date was  $4.3 million.  The results  of TSTC  and Sampo  have been
included  in  the  accompanying  consolidated  financial  statements  since  the
acquisition dates.

     In  January 2001, Amkor Iwate Corporation commenced operations and acquired
from Toshiba a packaging  and test facility located  in the Iwate prefecture  in
Japan.  The total purchase price  of $77.1 million was  financed by a short-term
note payable to Toshiba of $21.1 million, $47.0 million in other financing  from
a  Toshiba financing affiliate and  cash on hand. We  currently own 60% of Amkor
Iwate and Toshiba owns the balance of the outstanding shares. By January 2004 we
are required to purchase  the remaining 40% of  the outstanding shares of  Amkor
Iwate  from Toshiba. The  share purchase price  will be determined  based on the
performance of the joint venture during the three-year period but cannot be less
than 1  billion Japanese  yen and  cannot exceed  4 billion  Japanese yen  ($8.4
million  to $33.7 million based on the spot exchange rate at December 31, 2002).
The results of Amkor Iwate have  been included in the accompanying  consolidated
financial  statements since the date of  acquisition. Acquired intangibles as of
the acquisition date, based on estimates  of fair value, were $21.4 million  and
are  being  amortized on  a straight-line  basis  over 5  to 10  years. Acquired
intangibles include the value of acquired technology. The combined fair value of
the assets acquired and liabilities assumed was approximately $42.4 million  for
fixed assets, $14.0 million for inventory and other assets, and $0.7 million for
assumed   liabilities.  Amkor   Iwate  provides  packaging   and  test  services
principally to Toshiba's Iwate factory  under a long-term supply agreement  that
provides  for services to be  performed on a cost plus  basis during the term of
the joint venture and subsequently at  market based rates. The supply  agreement
with  Toshiba's Iwate factory terminates two years subsequent to our acquisition
of Toshiba's ownership interest in Amkor Iwate.

7.  ACQUISITIONS FROM ANAM SEMICONDUCTOR, INC. ("ASI") AND OUR RELATIONSHIP WITH
    ASI

  ACQUISITIONS FROM AND INVESTMENT IN ANAM SEMICONDUCTOR, INC.

     Historically we performed packaging and  test services at our factories  in
the  Philippines  and  subcontracted  for additional  services  with  ASI, which
operated four packaging and test facilities  in Korea. In the fourth quarter  of
1998  ASI's business had been severely affected by the economic crisis in Korea.
ASI was  part  of  the  Korean financial  restructuring  program  known  as  the
"Workout"  program beginning in October 1998. The Workout program was the result
of an accord among Korean financial institutions to assist in the  restructuring
of  Korean business enterprises. The  process involved negotiation between ASI's
banks and ASI,  and did  not involve the  judicial system.  The Workout  process
restructured the terms of ASI's significant bank debt. Although ASI's operations
continued  uninterrupted  during  the  process,  it  caused  concern  among  our
customers that we could potentially lose access to ASI's services. As a  result,
we  decided to acquire  ASI's packaging and test  operations to ensure continued
access to the manufacturing services previously provided by
                                        63
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

ASI. During the  course of negotiations  for the purchase  of the packaging  and
test  operations,  both  ASI  management  and the  ASI  bank  group  presented a
counter-proposal whereby, in addition to the purchase of the packaging and  test
operations,  we would also make an equity  investment in ASI. The bank group and
ASI  management  proposed  this  structure  because  they  believed  the  equity
investment  would reflect a level of commitment  from us to continue our ongoing
business relationship  with  ASI  after  the sale  of  its  packaging  and  test
operations to Amkor.

     In  May 1999, we acquired  K4, one of ASI's  packaging and test facilities,
and in May 2000 we acquired  ASI's remaining packaging and test facilities,  K1,
K2 and K3. With the completion of our acquisition of K1, K2 and K3, we no longer
depend  upon ASI for packaging  or test services. In May  2000 we committed to a
$459.0 million  equity  investment in  ASI,  and fulfilled  this  commitment  in
installments  taking place over the  course of 2000. In  connection with the May
2000 transactions with ASI,  we obtained independent  appraisals to support  the
value  and purchase  price of  each the  packaging and  test operations  and the
equity investment. We  invested a total  of $500.6 million  in ASI including  an
equity investment of $41.6 million made in October 1999.

     The  acquisition  of  K1,  K2  and K3  was  accounted  for  as  a purchase.
Accordingly, the results of K1, K2 and K3 have been included in the accompanying
consolidated financial statements  since the date  of acquisition. Goodwill  and
acquired intangibles as of the acquisition date were $555.8 million and prior to
the  adoption  of  SFAS  No.  142  (see  Note  3)  were  being  amortized  on  a
straight-line basis over a 10 year  period. Acquired intangibles at the time  of
the  acquisition  included  the  value  of  acquired  patent  rights  and  of  a
workforce-in-place. The  fair  value  of the  assets  acquired  and  liabilities
assumed  was  approximately  $394  million  for  fixed  assets,  $9  million for
inventory and other assets, and $9 million for assumed liabilities.

     As part of our  strategy to sell  our investment in ASI  and to divest  our
wafer  fabrication services business,  we entered into  a series of transactions
beginning in the second half of 2002:

     - In September  2002, we  sold 20  million shares  of ASI  common stock  to
       Dongbu Group for $58.1 million in net cash proceeds and 42 billion Korean
       Won  (approximately $35.4 million at a  spot exchange rate as of December
       31, 2002) of interest  bearing notes from  Dongbu Corporation payable  in
       two  equal principal  payments in September  2003 and  February 2004. The
       Dongbu Group  comprises Dongbu  Corporation, Dongbu  Fire Insurance  Co.,
       Ltd.  and  Dongbu  Life Insurance  Co.,  Ltd.,  all of  which  are Korean
       corporations  and   are  collectively   referred  herein   as   "Dongbu."
       Additionally,  we  divested one  million shares  of  ASI common  stock in
       connection with  the payment  of certain  advisory fees  related to  this
       transaction.

     - As  of February 28, 2003, we sold our wafer fabrication services business
       to ASI for total consideration of $62 million.

     - In separate transactions designed to  facilitate a future merger  between
       ASI  and Dongbu, (i) we  acquired a 10% interest  in Acqutek from ASI for
       $1.9 million; (ii) we acquired the Precision Machine Division ("PMD")  of
       Anam  Instruments, a  related party to  Amkor, for $8  million; and (iii)
       Anam Instruments, which  had been  partially owned by  ASI, utilized  the
       proceeds  from  the  sale of  PMD  to us  to  buy  back all  of  the Anam
       Instruments shares  owned  by  ASI. Acqutek  supplies  materials  to  the
       semiconductor  industry  and  is  publicly  traded  in  Korea.  An entity
       controlled by the family of James  Kim, our Chairman and Chief  Executive
       Officer,  held a  25% ownership  interest in Acqutek  at the  time of our
       acquisition of our  interest in Acqutek.  We have historically  purchased
       and   continue  to   purchase  leadframes  from   Acqutek.  PMD  supplies
       sophisticated die mold systems and tooling to the semiconductor  industry
       and  historically over 90% of its sales were to Amkor. At the time of our
       acquisition of PMD, Anam Instruments  was owned 20% by  ASI and 20% by  a
       family member of James Kim.

                                        64
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Each  of  the  transactions  with  Dongbu,  ASI  and  Anam  Instruments are
interrelated and it is possible that if each of the transactions were viewed  on
a  stand-alone basis without regard to the other transactions, we could have had
different conclusions as to fair value.

     As of February 28, 2003, we sold our wafer fabrication services business to
ASI. Additionally, we obtained  a release from  Texas Instruments regarding  our
contractual  obligations  with  respect  to  wafer  fabrication  services  to be
performed subsequent to the transfer of the business to ASI. Beginning with  the
first quarter of 2003, we will reflect our wafer fabrication services segment as
a  discontinued operation and restate our historical results. In connection with
the disposition  of  our wafer  fabrication  business,  we expect  to  incur  an
estimated  $1  million in  severance and  other  exit costs  to close  our wafer
fabrication services operations in  Boise, Idaho and  Lyon, France. We  estimate
that  in the first quarter of  2003 we will recognize a  pre-tax net gain on the
disposition  of  our  wafer  fabrication  services  business  approximately  $58
million.  The  carrying value  of the  disposed net  assets associated  with the
business as of February 28,  2003 was $3 million.  In addition, pursuant to  the
definitive  agreements,  (1)  Amkor and  Dongbu  agreed to  use  reasonable best
efforts to cause Dongbu  Electronics and ASI  to be merged  together as soon  as
practicable,  (2) Amkor and Dongbu  agreed to cause ASI  to use the proceeds ASI
received from  its  sale  of  stock  to Dongbu  to  purchase  shares  in  Dongbu
Electronics and (3) Amkor and Dongbu agreed to use their best efforts to provide
releases  and indemnifications to  the chairman, directors  and officers of ASI,
either past  or incumbent,  from any  and  all liabilities  arising out  of  the
performance  of their  duties at  ASI between January  1, 1995  and December 31,
2001. The last provision would provide  a release and indemnification for  James
Kim,  our CEO and Chairman, and  members of his family. We  are not aware of any
claims or other liabilities  which these individuals would  be released from  or
for which they would receive indemnification.

  OUR INVESTMENT IN ASI

     We  evaluate our investments for impairment due to declines in market value
that are considered other than temporary. In the event of a determination that a
decline in  market  value is  other  than temporary,  a  charge to  earnings  is
recorded  for the  unrealized loss, and  a new  cost basis in  the investment is
established. The stock prices of semiconductor companies' stocks, including  ASI
and  its competitors,  have experienced  significant volatility  during the past
several years.  The weakness  in  the semiconductor  industry has  affected  the
demand  for the wafer  output from ASI's  foundry and the  market value of ASI's
stock as traded on the Korea Stock Exchange. During 2002, we recorded impairment
charges totaling $172.5 million to reduce  the carrying value of our  investment
in  ASI to ASI's market  value. Additionally during 2002,  we recorded a loss of
$1.8 million on the disposition of a  portion of our interest in ASI to  Dongbu.
At January 1, 2002 Amkor owned 47.7 million shares or 42% of ASI's voting stock.
During 2002, we divested 21 million shares of ASI stock and at December 31, 2002
Amkor  owned  26.7 million  shares  of ASI  or 21%.  The  carrying value  of our
remaining investment in ASI at December 31, 2002 was $77.5 million, or $2.90 per
share.

     On March 24, 2003,  we sold an  additional 7 million  shares of ASI  common
stock  to an investment bank for 24.4 billion Korean won ($19.5 million based on
the spot  exchange rate  as  of the  transaction  date) which  approximates  the
carrying  value  of  those  shares.  As  part  of  that  sale,  we  purchased  a
nondeliverable call option for  $6.7 million that expires  December 2003 and  is
indexed  to ASI's share  price with a strike  price of $1.97  per share. The net
proceeds from the exercise of the option could be less than the current carrying
value and could expire unexercised losing  our entire investment in the  option.
As  of March  24, 2003, we  owned 19.7  million shares of  ASI, or  16% of ASI's
voting stock. Beginning March 24, 2003, we ceased accounting for our  investment
in  ASI under the equity  method of accounting and  commenced accounting for our
investment as a marketable security that is available for sale.

                                        65
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  PRO FORMA FINANCIAL INFORMATION RELATED TO AMKOR'S MAY 2000 ACQUISITION OF K1,
  K2 AND K3 (UNAUDITED)

     The  unaudited  pro  forma  information below  assumes  that  the  May 2000
acquisition of K1, K2 and  K3 occurred at the beginning  of 2000. The pro  forma
adjustments   include  a  provision  for  amortization  of  goodwill  and  other
identified intangibles, an adjustment of depreciation expense based on the  fair
market  value of the acquired assets, interest expense on debt issued to finance
the acquisitions and income taxes related to the pro forma adjustments. The  pro
forma  results are not  necessarily indicative of the  results we would actually
have achieved if the acquisition had been  completed as of the beginning of  the
period  presented, nor  are they  necessarily indicative  of future consolidated
results.

<Table>
<Caption>
                                                               FOR THE YEAR ENDED
                                                               DECEMBER 31, 2000
                                                              --------------------
                                                                 (IN THOUSANDS
                                                                EXCEPT PER SHARE
                                                                    AMOUNTS)
<S>                                                           <C>
Net revenues................................................       $2,397,515
Gross profit................................................          675,172
Operating income............................................          366,686
Income before income taxes and equity in income (loss) of
  investees.................................................          215,904
Net income..................................................          172,518
Earnings per share:
  Basic net income per common share.........................             1.14
  Diluted net income per common share.......................             1.10
Depreciation expense........................................          285,256
Amortization of goodwill and acquired intangibles...........           81,607
</Table>

     The pro forma adjustments  exclude the effects of  our investments in  ASI.
Had  we included  pro forma  adjustments for  the year  ended December  31, 2000
related to our investments in ASI, pro  forma net income would have been  $160.8
million  and pro  forma earnings per  share on  a diluted basis  would have been
$1.02.

  FINANCIAL INFORMATION FOR ASI

     The following  summary of  consolidated financial  information was  derived
from  the consolidated financial  statements of ASI,  reflecting ASI's packaging
and test operations prior  to May 2000 as  discontinued operations within  their
results  of operations. ASI's  net income for  the year ended  December 31, 2000
includes a $434.2 million gain  on sale of K1, K2  and K3, which was  eliminated
for purposes of calculating our equity in income of ASI.

<Table>
<Caption>
                                                      FOR THE YEAR ENDED DECEMBER 31,
                                                      -------------------------------
                                                        2002       2001        2000
                                                      --------   ---------   --------
                                                              (IN THOUSANDS)
<S>                                                   <C>        <C>         <C>
SUMMARY INCOME STATEMENT INFORMATION FOR ASI
Net revenues........................................  $213,813   $ 161,700   $344,792
Gross profit (loss).................................   (99,417)   (100,295)    41,682
Loss from continuing operations.....................   (97,129)   (162,173)   (19,703)
Net income (loss)...................................   (97,129)   (162,173)   450,641
</Table>

                                        66
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2002       2001
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
SUMMARY BALANCE SHEET INFORMATION FOR ASI
Cash, including restricted cash and bank deposits...........  $ 65,891   $ 84,721
Current assets..............................................   167,145    144,898
Property, plant and equipment, net..........................   482,028    646,298
Noncurrent assets (including property, plant and
  equipment)................................................   622,487    770,932
Current liabilities.........................................   111,409    134,727
Total debt and other long-term financing (including current
  portion)..................................................   150,607    238,970
Noncurrent liabilities (including debt and other long-term
  financing)................................................   119,493    175,487
Total stockholders' equity..................................   558,730    605,616
</Table>

  OUR RELATIONSHIP WITH ASI

     We  have had a long-standing relationship with ASI. ASI was founded in 1956
by Mr. H. S. Kim, the father of Mr. James Kim, our Chairman and Chief  Executive
Officer.  Through our  supply agreements  with ASI,  we historically  have had a
first right to substantially all of the packaging and test services capacity  of
ASI  and  the  exclusive  right  to  all of  the  wafer  output  of  ASI's wafer
fabrication facility. Beginning in May 2000  with our acquisition of K1, K2  and
K3,  we no longer receive packaging and test services from ASI. Under the former
wafer fabrication services  supply agreement  which was  consummated in  January
1998,  we had the exclusive right but not the requirement to purchase all of the
wafer output of  ASI's wafer  fabrication facility on  pricing terms  negotiated
annually.  Historically,  we have  had other  relationships with  ASI affiliated
companies  for  financial   services,  construction   services,  materials   and
equipment. We believe each of these transactions was conducted on an arms-length
basis in the ordinary course of business. In addition, ASI's former construction
subsidiary  is  currently in  reorganization and  its affairs  are managed  by a
number of creditor  banks; all transactions  between Amkor and  this entity  are
subject  to review and approval by these banks. Total purchases from ASI and its
affiliates included in cost  of revenue for the  years ended December 31,  2002,
2001   and  2000  were  $212.6  million,  $161.6  million  and  $499.8  million.
Additionally, financial services performed by ASI and its affiliates included in
interest expense  for  the  year  ended December  31,  2000  was  $1.6  million.
Construction  services  and  equipment  purchases  received  from  ASI  and  its
affiliates capitalized during the years ended  December 31, 2002, 2001 and  2000
were $2.8 million, $14.7 million and $38.8 million, respectively.

8.  ACCOUNTS RECEIVABLE SALE AGREEMENT

     Effective  July 1997 we entered into  an agreement to sell receivables with
certain banks. The transaction qualified 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 participating  banks
committed  to purchase, with limited recourse,  all right, title and interest in
selected accounts  receivable, up  to a  maximum of  $100.0 million.  Losses  on
receivables sold under the agreement were approximately $1.1 million in 2000 and
are  included in other expense, net. In  March 2000, we terminated the agreement
and repurchased approximately $71.5 million of accounts receivable.

9.  INVENTORIES

     Inventories, net of  reserves for  excess and obsolete  inventory of  $25.0
million  and  $20.2 million  for  2002 and  2001,  respectively, consist  of raw
materials and purchased components that are used in the semiconductor  packaging
process.

                                        67
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                                DECEMBER 31,
                                                              -----------------
                                                               2002      2001
                                                              -------   -------
                                                               (IN THOUSANDS)
<S>                                                           <C>       <C>
Raw materials and purchased components......................  $61,806   $64,752
Work-in-process.............................................   10,315     9,032
                                                              -------   -------
                                                              $72,121   $73,784
                                                              =======   =======
</Table>

10.  PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consist of the following:

<Table>
<Caption>
                                                                   DECEMBER 31,
                                                             -------------------------
                                                                2002          2001
                                                             -----------   -----------
                                                                  (IN THOUSANDS)
<S>                                                          <C>           <C>
Land.......................................................  $    88,744   $    88,667
Buildings and improvements.................................      537,288       495,104
Machinery and equipment....................................    1,512,307     1,661,140
Furniture, fixtures and other equipment....................      132,462       118,069
Construction in progress...................................        1,829        63,782
                                                             -----------   -----------
                                                               2,272,630     2,426,762
                                                             ===========   ===========
Less -- Accumulated depreciation and amortization..........   (1,303,687)   (1,034,488)
                                                             -----------   -----------
                                                             $   968,943   $ 1,392,274
                                                             ===========   ===========
</Table>

     As  described in Note  3, we recorded  in 2002 a  $185.5 million impairment
charge associated  with our  test and  packaging fixed  assets. Such  impairment
charge principally related to machinery and equipment.

11.  ACQUIRED INTANGIBLES

     Acquired intangibles consist of the following:

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              ------------------
                                                                2002      2001
                                                              --------   -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Patents and technology rights...............................  $ 61,994   $46,713
Less -- Accumulated amortization............................   (16,961)   (9,663)
                                                              --------   -------
                                                              $ 45,033   $37,050
                                                              ========   =======
</Table>

     Amortization  expense was  $7.3 million, $5.6  million and  $3.1 million in
2002, 2001 and 2000, respectively. The estimated annual amortization expense for
each of the next five years ending on December 31 is $7.3 million. The  weighted
average amortization period for the patents and technology rights is 8 years. As
described  in Note 3, we reduced the carrying value of our test services patents
and technology rights in 2002 by a $4.8 million impairment charge.

                                        68
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12.  INVESTMENTS

     Investments  include  equity  investments   in  affiliated  companies   and
noncurrent marketable securities as follows:

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              ------------------
                                                               2002       2001
                                                              -------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>       <C>
Equity investments under the equity method:
ASI (ownership of 21% and 42% at December 31, 2002 and 2001,
  respectively) (see Note 7)................................  $77,450   $377,947
  Other equity investments (20% -- 50% owned)...............    1,195        966
                                                              -------   --------
     Total equity investments...............................   78,645    378,913
Marketable securities classified as available for sale......    4,590      4,038
                                                              -------   --------
                                                              $83,235   $382,951
                                                              =======   ========
</Table>

     In  connection with the disposition of a portion of our interest in ASI, we
acquired a 10% interest in Acqutek from  ASI for a total purchase price of  $1.9
million.  Our investment in Acqutek is  classified as a marketable security that
is available for sale. Acqutek supplies materials to the semiconductor  industry
and is a publicly traded company in Korea. An entity controlled by the family of
James  Kim,  our Chairman  and  Chief Executive  Officer,  held a  25% ownership
interest in Acqutek at the time of  our acquisition of our interest in  Acqutek.
We have historically purchased and continue to purchase leadframes from Acqutek.
Total purchases from Acqutek included in cost of revenue for 2002, 2001 and 2000
were  $16.0 million, $14.0  million and $29.2  million, respectively. We believe
these transactions with Acqutek  were conducted on an  arms-length basis in  the
ordinary course of business.

13.  ACCRUED EXPENSES

     Accrued expenses consist of the following:

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2002       2001
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Accrued income taxes........................................  $ 48,787   $ 53,364
Accrued interest............................................    32,690     32,584
Accrued payroll.............................................    29,295     20,813
Other accrued expenses......................................    73,451     38,783
                                                              --------   --------
                                                              $184,223   $145,544
                                                              ========   ========
</Table>

                                        69
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14.  DEBT

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

<Table>
<Caption>
                                                                   DECEMBER 31,
                                                              -----------------------
                                                                 2002         2001
                                                              ----------   ----------
                                                                  (IN THOUSANDS)
<S>                                                           <C>          <C>
Secured bank facility:
  Term B loans, LIBOR plus 4% due September 2005............  $   97,118   $   97,706
  $100.0 million revolving line of credit, LIBOR plus 3.75%
     due March 2005.........................................          --           --
9.25% Senior notes due May 2006.............................     425,000      425,000
9.25% Senior notes due February 2008........................     500,000      500,000
10.5% Senior subordinated notes due May 2009................     200,000      200,000
5.75% Convertible subordinated notes due June 2006,
  convertible at $35.00 per share...........................     250,000      250,000
5% Convertible subordinated notes due March 2007,
  convertible at $57.34 per share...........................     258,750      258,750
Other debt..................................................      77,845       94,812
                                                              ----------   ----------
                                                               1,808,713    1,826,268
Less -- Short-term borrowings and current portion of
  long-term debt............................................     (71,023)     (54,815)
                                                              ----------   ----------
                                                              $1,737,690   $1,771,453
                                                              ==========   ==========
</Table>

     In June 2002 and September 2002 we amended our existing bank debt covenants
with  the secured  bank lenders to  provide further flexibility  with respect to
capital expenditures,  investment  restrictions and  other  financial  covenants
measured  in part by our  liquidity and earnings. As  part of the September 2002
amendment, lenders under our  bank debt facility agreed  to extend the  existing
financial covenant framework through December 31, 2003.

     In  March  2001, June  2001 and  September 2001,  we amended  the financial
covenants associated with the secured credit facilities. In connection with  the
September  2001 amendment, the revolving line of  credit was reduced from a $200
million commitment to $100 million,  the interest rate on  the Term B loans  was
increased  to LIBOR plus 4% and  we prepaid $125 million of  the Term B loans in
November 2001. We expensed, as  interest expense, approximately $4.0 million  of
deferred  debt issuance costs as a result of the reduction of the revolving line
of credit commitment and the prepayment of the Term B loans.

     In May  2001,  we  sold  $250.0  million  principal  amount  of  our  5.75%
convertible  subordinated notes due  2006 in a private  placement. The notes are
convertible into Amkor common stock at  a conversion price of $35.00 per  share.
We  used  $122.0 million  of  the $243.0  million of  the  net proceeds  of that
offering to repay  amounts outstanding  under the Term  B loans  of our  secured
credit  facility, and the balance  of the net proceeds  was available to be used
for general  corporate and  working  capital purposes.  In connection  with  the
repayment  in May 2001  of the Term  B loans, we  expensed, as interest expense,
$2.3 million of unamortized deferred debt issuance costs.

     In May 2001, we called for the  redemption of all of the 5.75%  convertible
subordinated   notes  due   May  2003.   In  anticipation   of  the  redemption,
substantially all of the holders of the convertible notes opted to convert their
notes into Amkor common stock and, accordingly, $50.2 million of the convertible
notes were converted to 3.7 million of our common stock. In connection with  the
conversion  of  the  5.75% convertible  subordinated  notes due  May  2003, $1.2
million of unamortized deferred  debt issuance costs  was charged to  additional
paid-in capital.

                                        70
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In  February 2001,  we sold  $500.0 million  principal amount  of our 9.25%
senior notes due  2008 in a  private placement.  We used $387.5  million of  the
$490.0 million of the net proceeds of that offering to repay amounts outstanding
under the Term A loans and revolving line of credit of our senior secured credit
facility,  and the  balance of  the net  proceeds was  available to  be used for
general corporate and working capital purposes. In connection with the repayment
in February 2001 of  the Term A  loans, we expensed,  as interest expense,  $7.1
million of unamortized deferred debt issuance costs.

     Other  debt as  of December  31, 2002  and 2001  included our  foreign debt
principally related to the financing of  Amkor Iwate's acquisition of a  Toshiba
packaging  and  test  facility  and  the debt  assumed  in  connection  with the
acquisition of  Sampo  Semiconductor Corporation  in  Taiwan. Our  foreign  debt
included  fixed  and variable  debt  maturing between  2003  and 2010,  with the
substantial majority maturing by 2003. As of December 31, 2002 the foreign  debt
had  interest rates  ranging from  1.0% to 6.6%.  These debt  instruments do not
include significant financial covenants.

     In connection with our issuance of the 5.75% convertible subordinated notes
due 2006  in May  2001, we  incurred debt  issuance costs  of $7.0  million.  In
connection  with  our  issuance of  the  9.25%  senior notes  due  2008  and the
amendment to  our secured  bank  facility in  February  2001, we  incurred  debt
issuance  costs of $11.0 million. The debt issuance costs have been deferred and
are being amortized over the life of the associated debt. Deferred debt issuance
costs are  included, net  of amortization,  in other  noncurrent assets  in  the
accompanying  consolidated balance sheet and the related amortization expense is
included in  interest expense  in the  accompanying consolidated  statements  of
operations.

     During the fourth quarter of 1999 and continuing into 2000, we completed an
early  conversion  of the  5.75% convertible  subordinated  notes due  May 2003.
During the  year ended  December 31,  2000, we  exchanged approximately  248,000
shares  of our  common stock  for $3.2  million of  the convertible subordinated
notes. During the year ended December 31, 1999, we exchanged 12.1 million shares
of common stock for $153.6 million  of convertible subordinated notes. The  fair
value  of the shares of common stock issued in excess of the shares required for
conversion of the notes was  $0.3 million and $17.4  million for the year  ended
December 31, 2000 and 1999, respectively, and such amounts were expensed and are
included  in  other  expense  in  the  accompanying  consolidated  statements of
operations.

     Interest expense related  to short-term  borrowings and  long-term debt  is
presented  net  of interest  income  of $4.2  million,  $10.3 million  and $14.2
million in 2002, 2001 and  2000, respectively, in the accompanying  consolidated
statements  of operations. The principal  payments required under short-term and
long-term debt borrowings  at December 31,  2002 are as  follows: 2003 --  $71.0
million,  2004 -- $56.4 million, 2005 --  $42.4 million, 2006 -- $677.9 million,
2007 -- $259.6 million and thereafter -- $701.4 million.

15.  STOCKHOLDERS' EQUITY

     In connection with a $410.0 million private equity offering in May 2000, we
issued 20.5 million shares of our common stock and granted warrants that  expire
four years from issuance to purchase 3.9 million additional shares of our common
stock  at $27.50 per  share. The estimated  fair value of  the stock warrants of
$35.0 million  is included  in additional  paid-in capital  on our  consolidated
balance sheet.

16.  EMPLOYEE BENEFIT PLANS

  U.S. DEFINED CONTRIBUTION PLAN

     Our  company has a defined contribution benefit plan covering substantially
all U.S. employees. Employees can contribute up to 13% of salary to the plan and
the company matches in cash 75% of the employee's contributions up to a  defined
maximum  on an annual  basis. The expense  for this plan  was $2.0 million, $2.1
million and $1.8 million in 2002, 2001 and 2000, respectively.

                                        71
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  PHILIPPINE PENSION PLAN

     Our Philippine  subsidiary  sponsors a  defined  benefit plan  that  covers
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 Philippine  defined
benefit plan are as follows:

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31,
                                                           --------------------------
                                                            2002     2001      2000
                                                           ------   -------   -------
                                                                 (IN THOUSANDS)
<S>                                                        <C>      <C>       <C>
Service cost of current period...........................  $2,339   $ 2,534   $ 1,862
Interest cost on projected benefit obligation............   1,681     1,919     1,468
Expected return on plan assets...........................    (920)   (1,482)   (1,092)
Amortization of transition obligation and actuarial
  gains/losses...........................................      62        64        66
                                                           ------   -------   -------
     Total pension expense...............................  $3,162   $ 3,035   $ 2,304
                                                           ======   =======   =======
</Table>

     It  is  our policy  to make  contributions sufficient  to meet  the minimum
contributions required by law and regulation. The following table sets forth the
funded status of  our Philippine defined  benefit pension plan  and the  related
changes in the projected benefit obligation and plan assets:

<Table>
<Caption>
                                                               2002      2001
                                                              -------   -------
                                                               (IN THOUSANDS)
<S>                                                           <C>       <C>
Change in projected benefit obligation:
  Projected benefit obligation at beginning of year.........  $19,742   $16,585
  Service cost..............................................    2,339     2,534
  Interest cost.............................................    1,681     1,919
  Effect of curtailment.....................................   (2,148)       --
  Actuarial gain............................................   (1,997)     (401)
  Foreign exchange gain.....................................     (807)     (378)
  Benefits paid.............................................     (203)     (517)
                                                              -------   -------
  Projected benefit obligation at end of year...............   18,607    19,742
                                                              -------   -------
Change in plan assets:
  Fair value of plan assets at beginning of year............   10,003    11,585
  Actual return on plan assets..............................     (283)     (800)
  Effect of curtailment.....................................   (1,500)       --
  Foreign exchange gain.....................................     (408)     (265)
  Benefits paid.............................................     (203)     (517)
                                                              -------   -------
  Fair value of plan assets at end of year..................    7,609    10,003
                                                              -------   -------
Funded status:
  Projected benefit obligation in excess of plan assets.....   10,996     9,739
  Unrecognized actuarial loss...............................   (1,642)   (3,218)
  Unrecognized transition obligation........................     (440)     (523)
                                                              -------   -------
  Accrued pension costs.....................................  $ 8,914   $ 5,998
                                                              =======   =======
</Table>

     The  discount rate used in determining the projected benefit obligation for
our Philippine defined benefit plan was 8%, 10% and 12% as of December 31, 2002,
2001 and 2000, respectively. The rate of increase in future compensation  levels
was  7%, 9% and  11% as of December  31, 2002, 2001  and 2000, respectively. The

                                        72
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

expected long-term rate  of return  on plan  assets was 8%,  12% and  12% as  of
December 31, 2002, 2001 and 2000, respectively. These rates reflect economic and
market  conditions in the Philippines. The fair value of plan assets includes an
investment in our common stock of $0.5 million and $1.6 million at December  31,
2002 and 2001, respectively.

  KOREAN SEVERANCE PLAN

     Our Korean subsidiary participates in an accrued severance plan that covers
employees  and  directors  with  one  year or  more  of  service.  Eligible plan
participants are  entitled to  receive a  lump-sum payment  upon termination  of
their  employment, based on their length of service  and rate of pay at the time
of termination. Accrued severance benefits  are estimated assuming all  eligible
employees  were to  terminate their  employment at  the balance  sheet date. The
contributions to the national pension fund made under the National Pension  Plan
of   the  Republic  of  Korea  are   deducted  from  accrued  severance  benefit
liabilities. Contributed amounts are:

<Table>
<Caption>
                                                                DECEMBER 31,
                                                              -----------------
                                                               2002      2001
                                                              -------   -------
                                                               (IN THOUSANDS)
<S>                                                           <C>       <C>
Balance at the beginning of year............................  $40,002   $31,446
Provision of severance benefits.............................   16,805    13,430
Severance payments..........................................   (8,897)   (3,132)
(Gain)/loss on foreign currency translation.................    4,436    (1,742)
                                                              -------   -------
                                                               52,346    40,002
Payments remaining with the Korean National Pension Fund....   (1,632)   (1,715)
                                                              -------   -------
Balance at the end of year..................................  $50,714   $38,287
                                                              =======   =======
</Table>

  TAIWAN PENSION PLAN

     Our  Taiwan  subsidiary  sponsors  a  defined  benefit  plan  that   covers
substantially  all full-time employees. Charges to  expense are based upon costs
computed by  independent  actuaries. As  of  December  31, 2002  and  2001,  the
projected  benefit obligation was  $2.1 million and  $1.2 million, respectively.
Pension assets at fair market value as  of December 31, 2002 and 2001 were  $1.9
million  and $1.4  million, respectively. Accrued  pension cost  at December 31,
2002 and 2001 was $0.5 million.

                                        73
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

17.  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:

<Table>
<Caption>
                                                        FOR THE YEAR ENDED DECEMBER 31,
                                                        --------------------------------
                                                          2002        2001        2000
                                                        ---------   ---------   --------
                                                                 (IN THOUSANDS)
<S>                                                     <C>         <C>         <C>
Current:
  Federal.............................................  $(21,275)   $     --    $ 2,149
  State...............................................        --          --       (159)
  Foreign.............................................    14,371       3,331     28,550
                                                        --------    --------    -------
                                                          (6,904)      3,331     30,540
                                                        --------    --------    -------
Deferred:
  Federal.............................................    70,738     (87,077)    (6,869)
  Foreign.............................................     1,981       2,055     (1,386)
                                                        --------    --------    -------
                                                          72,719     (85,022)    (8,255)
                                                        --------    --------    -------
     Total provision (benefit)........................  $ 65,815    $(81,691)   $22,285
                                                        ========    ========    =======
</Table>

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

<Table>
<Caption>
                                                     FOR THE YEAR ENDED DECEMBER 31,
                                                     --------------------------------
                                                       2002        2001        2000
                                                     ---------   ---------   --------
                                                              (IN THOUSANDS)
<S>                                                  <C>         <C>         <C>
Federal statutory rate.............................  $(192,771)  $(150,419)  $ 69,101
Income (loss) of foreign subsidiaries subject to
  tax holiday......................................     63,337      33,762    (43,367)
Foreign exchange (losses) gains recognized for
  income taxes.....................................     14,855      13,221       (382)
Change in valuation allowance......................    138,228       3,656      5,898
Difference in rates on foreign subsidiaries........     24,140      20,415     (8,142)
Change in tax rate from prior year.................         --       5,796         --
State taxes, net of federal benefit................     (3,297)     (8,480)      (661)
Goodwill and other permanent differences...........     21,323         358       (162)
                                                     ---------   ---------   --------
     Total.........................................  $  65,815   $ (81,691)  $ 22,285
                                                     =========   =========   ========
</Table>

                                        74
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2002       2001
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Deferred tax assets:
  Net operating loss carryforwards..........................  $160,043   $103,340
  Capital loss carryover....................................    45,069         --
  Inventories...............................................     7,945     10,495
  Corporate income tax credits..............................     5,447      9,990
  Accounts receivable.......................................     3,605      3,248
  Property, plant and equipment.............................     3,594      1,103
  Goodwill..................................................     4,023      5,331
  Other accrued liabilities.................................     2,790        542
  Unrealized foreign exchange losses........................     1,054        257
  Loss on impairment/lease shutdown reserves................    11,890         --
  Other.....................................................     6,666      6,309
                                                              --------   --------
Total deferred tax assets...................................   252,126    140,615
Valuation allowance.........................................  (196,442)   (13,722)
                                                              --------   --------
Total deferred tax assets net of valuation allowance........    55,684    126,893
                                                              --------   --------
Deferred tax liabilities:
  Property, plant and equipment.............................     8,714      6,291
  Goodwill..................................................     6,146      9,218
  Unrealized foreign exchange gains.........................     2,203         88
  Other.....................................................     1,424      1,380
                                                              --------   --------
Total deferred tax liabilities..............................    18,487     16,977
                                                              --------   --------
Net deferred tax assets.....................................  $ 37,197   $109,916
                                                              ========   ========
</Table>

     During  2002, we recorded a $138.2  million charge to establish a valuation
allowance against  our deferred  tax  assets consisting  primarily of  U.S.  and
Taiwanese  net operating loss carryforwards and  tax credits. In connection with
our divestiture in 2002 of 21 million shares of ASI common stock, we realized  a
capital  loss of approximately $117.0 million  and recognized a U.S. tax benefit
of $44.5 million for which we provided a full valuation allowance because we did
not have any offsetting capital gains. Generally accepted accounting  principles
require  companies to weigh  both positive and  negative evidence in determining
the need for a valuation  allowance. In light of  our three years of  cumulative
losses,  an  unprecedented industry  downturn and  continued poor  visibility of
customer demand, we  have determined,  during 2002, that  a valuation  allowance
representing  substantially all of our deferred tax assets is appropriate. These
negative factors outweighed our forecasted future profitability and  expectation
that we will be able to utilize our net operating loss carryforwards.

     In  connection with our 2001 acquisitions  in Japan and Taiwan, we recorded
as of the acquisition date a net deferred tax assets of $13.3 million, which  is
net of a $1.3 million valuation allowance.

     As  a  result  of  certain  capital  investments,  export  commitments  and
employment levels, income from operations in Korea, the Philippines and China is
subject to reduced tax rates, and in some cases is wholly exempt from taxes.  As
a  result of our 1999  and 2000 acquisitions of  K1, K2, K3 and  K4 in Korea, we
benefit from a tax holiday extending through  2012 that provides for a 100%  tax
holiday for seven years and then 50%

                                        75
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

tax  holiday  for  an additional  3  years.  In the  Philippines,  our operating
locations operate in  economic zones and  in exchange for  tax holidays we  have
committed  to  certain  export  and employment  levels.  One  of  our Philippine
locations benefits from a full tax  holiday through 2003, followed by  perpetual
reduced  tax rate  of 5%,  while the  other location  benefits from  a perpetual
reduced tax rate of 5%. As a result  of our 2001 investment in China, we  expect
to  benefit from a 100% tax holiday for  five years and then 50% tax holiday for
an additional two years. As a result  of the net losses incurred by our  foreign
subsidiaries  subject to tax holidays  during 2002 and 2001,  there is a forgone
income tax  benefit attributable  to the  tax status  of these  subsidiaries  of
approximately  $63.3 million or $0.385 per share  and $33.8 million or $0.21 per
share,  in  2002  and  2001,  respectively.  The  income  tax  benefit  in  2000
attributable  to the  tax status of  these subsidiaries  was approximately $43.4
million or $0.28 per share.

     The deferred tax asset and liability for foreign exchange gains and  losses
relate  to U.S.  dollar denominated  monetary assets  and liabilities  for which
foreign exchange gains or losses were realized for book purposes and not for tax
purposes. During 2000 one  of our Philippine  subsidiaries realized net  foreign
exchange  gains and  losses for  book purposes which  were deferred  for tax and
established a valuation  allowance for  a portion  of the  related deferred  tax
assets.  Our  ability to  utilize  these assets  depends  on the  timing  of the
settlement of the related assets or liabilities and the amount of taxable income
recognized within the  Philippine statutory carryforward  limit of three  years.
During  2002 and 2001, such Philippine  subsidiary realized the foreign exchange
gains and  losses  for  tax  causing a  reduction  to  the  valuation  allowance
established in 2000.

     In December 2002, we utilized $33.3 million of U.S. net operating losses by
carrying  back  such amounts  to offset  U.S. reported  taxable income  in prior
years. At December 31, 2002, our company has remaining U.S. net operating losses
available to be carried  forward totaling $375.5  million expiring between  2021
and  2022.  Additionally, at  December 31,  2002, our  company had  non-U.S. net
operating losses available to be carried forward totaling $61.2 million expiring
between 2003 and 2012.  The tax returns  for open years  are subject to  changes
upon  final examination.  Non-U.S. loss before  taxes and  minority interest was
$395.3 million and 180.7  million in 2002 and  2001, respectively, and  non-U.S.
income  before  taxes  and minority  interest  was  $201.0 million  in  2000. At
December 31, 2002, net cumulative undistributed losses of non-U.S.  subsidiaries
totaled  approximately  $61.4 million.  No  liabilities are  recognized  for our
cumulative earnings loss  position and  no U.S. income  and foreign  withholding
taxes  would  be  due on  the  cumulative  earnings loss.  It  is  the company's
intention to reinvest any undistributed earnings outside the U.S.

     At December 31, 2002 and 2001  current deferred tax assets of $5.5  million
and  $16.3  million,  respectively, are  included  in other  current  assets and
noncurrent  deferred  tax   assets  of   $36.3  million   and  $108.1   million,
respectively,  are included in  other assets in  the consolidated balance sheet.
The net deferred  tax assets include  amounts, which, in  our opinion, are  more
likely  than not to be realizable through future taxable income. In addition, at
December 31, 2002 and 2001, noncurrent deferred tax liabilities of $4.6  million
and $14.5 million, respectively, are included in other noncurrent liabilities in
the consolidated balance sheet.

     We  operate in  and file  income tax returns  in various  U.S. and non-U.S.
jurisdictions which  are subject  to  examination by  tax authorities.  Our  tax
returns have been examined through 1998 in the Philippines and the U.S., through
1999 in Japan, through 2000 in Taiwan and through 2001 in China. The tax returns
for  open years  in all  jurisdictions in  which we  do business  are subject to
changes upon  examination.  We  believe  that we  have  estimated  and  provided
adequate accruals for the probable additional taxes and related interest expense
that may ultimately result from examinations related to our transfer pricing and
local   attribution   of   income   resulting   from   significant  intercompany
transactions, including ownership and use  of intellectual property, in  various
U.S.  and  non-U.S. jurisdictions.  Our estimated  tax  liability is  subject to
change as examinations  of specific tax  years are completed  in the  respective
jurisdictions. We believe that any additional taxes or related interest over the
amounts  accrued will not have  a material effect on  our financial condition or
results of operations, nor do we expect that examinations to be completed in the
near term would have a  material favorable impact. As  of December 31, 2002  and
2001,    the   accrual    for   current    taxes   and    estimated   additional
                                        76
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

taxes was $48.8 million and $53.4 million, respectively. In addition, changes in
the mix of income from our foreign subsidiaries, expiration of tax holidays  and
changes in tax laws or regulations could result in increased effective tax rates
in the future.

18.  EARNINGS PER SHARE

     Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share,"  requires dual presentation  of basic and diluted  earnings per share on
the face of the income statement. Basic EPS is computed using only the  weighted
average number of common shares outstanding for the period, while diluted EPS is
computed  assuming  conversion  of  all dilutive  securities,  such  as options,
convertible debt and warrants. For the  years ended December 31, 2002 and  2001,
we  excluded  from the  computation of  diluted  earnings per  share potentially
dilutive securities  which would  have  an antidilutive  effect  on EPS.  As  of
December   31,  2002,  the  total  number  of  potentially  dilutive  securities
outstanding was  6.6  million, 11.7  million  and 3.9  million  for  outstanding
options,  convertible notes and  warrants for common  stock, respectively. As of
December  31,  2001,  the  total  number  of  potentially  dilutive   securities
outstanding  was  12.4 million,  11.7 million  and  3.9 million  for outstanding
options, convertible  notes and  warrants for  common stock,  respectively.  The
basic  and diluted per share  amounts are the same for  the years 2002 and 2001,
due to net losses.

     Year 2000 basic and diluted per share amounts are calculated as follows:

<Table>
<Caption>
                                                                            WEIGHTED
                                                            EARNINGS     AVERAGE SHARES   PER SHARE
                                                           (NUMERATOR)   (DENOMINATOR)     AMOUNT
                                                           -----------   --------------   ---------
                                                           (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S>                                                        <C>           <C>              <C>
Earnings per Share -- Year Ended December 31, 2000
  Basic earnings per share...............................   $154,153        145,806         $1.06
  Impact of convertible notes............................      2,414          3,744
  Dilutive effect of options.............................         --          3,673
                                                            --------        -------         -----
  Diluted earnings per share.............................   $156,567        153,223         $1.02
                                                            ========        =======         =====
</Table>

19.  STOCK COMPENSATION PLANS

     1998 Director Option Plan.  A total of 300,000 shares of common stock  have
been  reserved for issuance under the Director Plan. The option grants under the
Director Plan are automatic  and non-discretionary. As of  January 1, 2003,  the
Director Plan provides for an initial grant of options to purchase 20,000 shares
of  common stock  to each  new non-employee  director of  the company  when such
individual first becomes  an outside  director. In  addition, each  non-employee
director  will automatically  be granted  subsequent options  to purchase 10,000
shares of common stock on each date on which such director is re-elected by  the
stockholders  of the company,  provided that as  of such date  such director has
served on the board of directors for at least six months. The exercise price  of
the  options is 100% of the  fair market value of the  common stock on the grant
date. The  term of  each option  is  ten years  and each  option granted  to  an
non-employee  director vests  over a three  year period. The  Director Plan will
terminate in January 2008 unless sooner terminated by the board of directors.

     1998 Stock Plan.  The 1998 Stock  Plan generally provides for the grant  to
employees, directors and consultants of stock options and stock purchase rights.
Unless  terminated sooner, the 1998 Plan will terminate automatically in January
2008. A total of 5,000,000 shares are reserved for issuance under the 1998 Stock
Plan, and there is a provision for  an annual replenishment to bring the  number
of  shares of common stock reserved for  issuance under the plan up to 5,000,000
as of each January 1.

     Unless determined  otherwise  by the  board  of directors  or  a  committee
appointed  by the board of directors,  options and stock purchase rights granted
under   the    1998   Plan    are   not    transferable   by    the    optionee.

                                        77
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Generally,  the exercise price of all stock  options granted under the 1998 Plan
must be at least  equal to the fair  market value of the  shares on the date  of
grant. In general, the options granted will vest over a four year period and the
term of the options granted under the 1998 Plan may not exceed ten years.

     1998  Stock Option Plan  for French Employees.   The 1998  French Plan will
terminate in April 2003. Amkor intends  to implement a new French Plan,  subject
to shareholder approval, in 2003. The 1998 French Plan provides for the granting
of options to employees of our French subsidiaries. A total of 250,000 shares of
common  stock are reserved for issuance under the 1998 French Plan, and there is
a provision for an annual replenishment to bring the number of shares of  common
stock  reserved for issuance under the plan up  to 250,000 as of each January 1.
In general, stock options granted  under the 1998 French  Plan vest over a  four
year  period, the exercise price  for each option granted  under the 1998 French
Plan shall be 100% of the fair market value of the shares of common stock on the
date the option is granted  and the maximum term of  the option must not  exceed
ten  years. Shares subject to the options granted under the 1998 French Plan may
not be transferred, assigned or hypothecated in any manner other than by will or
the laws of descent or  distribution before the date  which is five years  after
the date of grant.

     On  November 8,  2002, we  initiated a  voluntary stock  option replacement
program such that employees and members of our board of directors could elect to
surrender their existing options and be granted new options no earlier than  six
months  and one day after the tendered options were cancelled. We will issue new
option grants equal to the same  number of shares surrendered by the  employees.
Pursuant  to the terms and conditions of the offer to exchange, a total of 1,633
eligible employees participated  and our company  has accepted for  cancellation
options  to purchase  an aggregate of  7,115,891 shares of  our company's common
stock under the 1998 Stock Plan, an aggregate of 35,000 shares of our  company's
common  stock under the  1998 Director Option  Plan and an  aggregate of 248,200
shares of our company's common stock under the 1998 French Plan. Subject to  the
terms  and conditions of the offer to exchange, our company intends to grant new
options to purchase up to 7,399,091 shares  of our common stock no earlier  than
June  12, 2003 in  exchange for the  options tendered by  eligible employees and
members of our  board of  directors and accepted  by our  company. The  exercise
price will equal the fair market value of common stock as of the new grant date.
The  vesting term  of the new  options will  be similar to  the tendered options
except the new options  contain an additional one  year vesting period prior  to
any options becoming exercisable.

                                        78
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     A summary of the status of the stock option plans follows:

<Table>
<Caption>
                                                         WEIGHTED AVERAGE   WEIGHTED AVERAGE
                                            NUMBER OF     EXERCISE PRICE       GRANT DATE
                                              SHARES        PER SHARE         FAIR VALUES
                                            ----------   ----------------   ----------------
<S>                                         <C>          <C>                <C>
Balance at December 31, 1999..............   5,065,548        $10.15
Granted...................................   5,168,950         40.15             $22.46
                                                                                 ======
Exercised.................................     418,388         10.32
Cancelled.................................     545,909         33.87
                                            ----------        ------
Balance at December 31, 2000..............   9,270,201         25.48
Granted...................................   4,313,850         15.14             $ 8.47
                                                                                 ======
Exercised.................................     517,822          9.88
Cancelled.................................     709,863         27.60
                                            ----------        ------
Balance at December 31, 2001..............  12,356,366         22.40
Granted...................................   4,004,460         12.76             $ 7.94
                                                                                 ======
Exercised.................................     547,862         10.30
Cancelled.................................   9,239,701         24.88
                                            ----------        ------
Balance at December 31, 2002..............   6,573,263        $14.15
                                            ==========        ======
Options exercisable at:
December 31, 2000.........................   2,827,380        $10.23
December 31, 2001.........................   4,508,557         22.35
December 31, 2002.........................   3,436,469         13.95
</Table>

     Significant  option groups outstanding at December 31, 2002 and the related
weighted average exercise price and  remaining contractual life information  are
as follows:

<Table>
<Caption>
                                                OUTSTANDING            EXERCISABLE        WEIGHTED
                                            --------------------   --------------------    AVERAGE
                                                        WEIGHTED               WEIGHTED   REMAINING
                                                        AVERAGE                AVERAGE      LIFE
                                             SHARES      PRICE      SHARES      PRICE      (YEARS)
                                            ---------   --------   ---------   --------   ---------
<S>                                         <C>         <C>        <C>         <C>        <C>
Options with exercise price of:
  $ 1.61 - $ 3.22.........................     75,000    $ 2.13           --    $   --       9.7
  $ 3.23 - $ 6.46.........................    476,876    $ 5.51      356,286    $ 5.66       5.1
  $ 6.47 - $12.94.........................  2,124,872    $10.34    2,006,802    $10.36       4.4
  $12.95 - $25.90.........................  3,444,608    $14.24      720,965    $15.42       7.6
  $25.91 - $51.82.........................    451,907    $42.47      352,416    $42.64       2.8
                                            ---------              ---------
Options outstanding at December 31,
  2002....................................  6,573,263              3,436,469
                                            =========              =========
</Table>

                                        79
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In  order to calculate the fair value of stock options at date of grant, we
used the Black-Scholes option pricing model. The following assumptions were used
to calculate weighted average fair values of the options granted:

<Table>
<Caption>
                                                              FOR THE YEAR ENDED
                                                                 DECEMBER 31,
                                                              ------------------
                                                              2002   2001   2000
                                                              ----   ----   ----
<S>                                                           <C>    <C>    <C>
Expected life (in years)....................................    4      4      4
Risk-free interest rate.....................................  2.5%   4.5%   6.8%
Volatility..................................................   85%    70%    66%
Dividend yield..............................................   --     --     --
</Table>

     1998 Employee Stock Purchase Plan.   A total of 1,000,000 shares of  common
stock  are  available for  sale  under the  Stock  Purchase Plan  and  an annual
increase is to be added  as of each January 1  to restore the maximum  aggregate
number  of  shares of  common  stock available  for sale  under  the plan  up to
1,000,000. 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. The Stock 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
payday. Each participant will  be granted an  option on the first  day of a  two
year  offering period,  and shares  of common  stock will  be purchased  on four
purchase dates within  the offering  period. The  purchase price  of the  common
stock  under the Stock 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.  The Stock  Purchase  Plan will  terminate  in
January 2008, unless sooner terminated by the board of directors.

     For  the years ended December 31,  2002, 2001 and 2000, employees purchased
common stock  shares under  the  stock purchase  plan  of 996,617,  482,937  and
263,498,  respectively. The average estimated fair values of the purchase rights
granted during the  years ended December  31 2002,  2001 and 2000  based on  the
Black-Scholes  option pricing model were  $3.16, $6.53 and $12.17, respectively.
The following assumptions were used to calculate weighted average fair values of
the purchase rights granted:

<Table>
<Caption>
                                                              FOR THE YEAR ENDED
                                                                 DECEMBER 31,
                                                              ------------------
                                                              2002   2001   2000
                                                              ----   ----   ----
<S>                                                           <C>    <C>    <C>
Expected life (in years)....................................  0.5    0.5    0.5
Risk-free interest rate.....................................  2.5%   4.5%   6.8%
Volatility..................................................   85%    70%    66%
Dividend yield..............................................   --     --     --
</Table>

20.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The estimated fair value of financial instruments has been determined 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  we could realize in  a current market exchange.
Certain of these financial instruments are with major financial institutions and
expose us 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  carrying  amounts  reported  in  the  balance  sheet  for   short-term
investments,  due from affiliates, other accounts receivable, due to affiliates,
accrued  expenses  and   accrued  income  taxes   approximate  fair  value   due

                                        80
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

to  the short-term nature of these instruments. The methods and assumptions used
to estimate the fair value of other significant classes of financial instruments
is set forth below:

     Cash and Cash Equivalents.  Cash and cash equivalents are due on demand  or
carry  a maturity date  of less than  three months when  purchased. The carrying
amount of these financial instruments is a reasonable estimate of fair value.

     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.

     Long-term  debt.    The carrying  amount  of  our total  long-term  debt as
December 31, 2002  was $1,737.7 million  and the fair  value based on  available
market quotes is estimated to be $1,321.3 million.

21.  COMMITMENTS AND CONTINGENCIES

     Amkor  is  involved in  various  claims incidental  to  the conduct  of our
business. Based on consultation with legal  counsel, we do not believe that  any
claims, either individually or in the aggregate, to which the company is a party
will  have a material  adverse effect on  our financial condition  or results of
operations.

     Net future minimum lease payments under operating leases that have  initial
or remaining noncancelable lease terms in excess of one year are:

<Table>
<Caption>
                                                               DECEMBER 31,
                                                                   2002
                                                              --------------
                                                              (IN THOUSANDS)
<S>                                                           <C>
2003........................................................     $ 10,026
2004........................................................        7,798
2005........................................................        6,250
2006........................................................        7,077
2007........................................................        6,985
Thereafter..................................................       63,341
                                                                 --------
     Total (net of minimum sublease income of $7,585).......     $101,477
                                                                 ========
</Table>

     Rent expense amounted to $15.0 million, $21.8 million and $13.7 million for
2002,  2001  and 2000,  respectively.  We lease  office  space in  West Chester,
Pennsylvania from certain  of our stockholders.  The lease expires  in 2006.  We
have  the option to  extend the lease  for an additional  10 years through 2016.
Amounts paid for this lease in each of 2002, 2001 and 2000 were $1.2 million.

  Indemnifications and Guarantees

     In November 2002, the FASB issued  FIN No. 45, "Guarantor's Accounting  and
Disclosure   requirements  for  Guarantees,  Including  Indirect  Guarantees  of
Indebtedness of  Others." We  have adopted  the disclosure  requirements of  the
Interpretation  as of December 31,  2002. Disclosures about our indemnifications
and guarantees are provided below.

     We have indemnified  members of our  board of directors  and our  corporate
officers  (collectively, the  "Indemnitees") against any  threatened, pending or
completed action  or  proceeding,  whether civil,  criminal,  administrative  or
investigative  by reason of the fact that the Indemnitee is or was a director or
officer of the company. The Indemnitees  are indemnified, to the fullest  extent
permitted  by law,  against related expenses,  judgments, fines  and any amounts
paid  in  settlement.  The  maximum  amount  of  future  payments  is  generally
unlimited.  There is no amount recorded for this indemnification at December 31,
2002. Due to the nature of

                                        81
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

this indemnification, it is  not possible to make  a reasonable estimate of  the
maximum potential loss or range of loss. No assets are held as collateral and no
specific recourse provisions exist related to this indemnification.

     In connection with the termination of AEI's status as an S Corporation (see
Note  1, Receivable from Stockholder), in 1998 we indemnified and agreed to hold
harmless the Kim family against any  U.S. federal or state income tax  liability
resulting  from the Kim  family being required  to include in  income amounts in
excess of the income shown to be  reportable on the original tax returns  filed,
as  they relate  to the previously  existing S Corporation.  The carrying amount
recorded for this indemnification as of  December 31, 2002 is $15.0 million.  It
is  reasonably possible  that future  payments may  exceed amounts  accrued. The
maximum potential  loss related  to this  indemnification is  $23.3 million.  No
assets are held as collateral and no specific recourse provisions exist.

     As  of  December 31,  2002,  we have  outstanding  $1.0 million  of standby
letters of  credit. Such  standby letters  of credit  are used  in our  ordinary
course of business and are collateralized by our cash balances.

22.  SEGMENT INFORMATION

     In  accordance  with  SFAS  No.  131,  "Disclosures  about  Segments  of an
Enterprise and Related Information," we  had two reportable segments,  packaging
and  test services and  wafer fabrication services.  These segments were managed
separately because  the services  provided by  each segment  required  different
technology and marketing strategies.

     Packaging  and  Test  Services.    Through  our  factories  located  in the
Philippines, Korea, Japan, Taiwan and China, we offer a complete and  integrated
set of packaging and test services including integrated circuit ("IC") packaging
design,  leadframe  and substrate  design, IC  package assembly,  final testing,
burn-in, reliability testing and thermal and electrical characterization.

     Wafer  Fabrication  Services.    Through  our  wafer  fabrication  services
division,  we  provided marketing,  engineering and  support services  for ASI's
wafer foundry, under a long-term supply  agreement. As of February 28, 2003,  we
sold  our wafer fabrication  services business to ASI.  Beginning with the first
quarter of 2003,  we will reflect  our wafer fabrication  services segment as  a
discontinued operation and restate our historical results.

     Prior  to the  sale of  our wafer fabrication  services business  to ASI in
February 2003,  we derived  92.8%,  79.4% and  80.7%  of our  wafer  fabrication
revenues  from Texas Instruments  ("TI") for 2002,  2001 and 2000, respectively.
Effective as of February 28, 2003, we obtained a release from Texas  Instruments
regarding our contractual obligations with respect to wafer fabrication services
to  be performed subsequent  to the transfer  of the business  to ASI. Total net
revenues derived from TI  accounted for 13.9%, 10.2%  and 14.1% of  consolidated
net  revenues in  2002, 2001  and 2000,  respectively. With  the commencement of
operations of Amkor Iwate and the  acquisition of a packaging and test  facility
from  Toshiba in  2001, total  net revenues  derived from  Toshiba accounted for
12.6%  and  14.3%  of  our  consolidated   net  revenues  for  2002  and   2001,
respectively.

     The accounting policies for segment reporting are the same as those for our
consolidated  financial statements. We evaluate  our operating segments based on
operating  income.  Summarized   financial  information  concerning   reportable
segments  is  shown in  the  following table.  The  "Other" column  includes the

                                        82
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

elimination of inter-segment  balances and corporate  assets which include  cash
and  cash equivalents, non-operating balances due from affiliates, investment in
equity affiliates and other investments.

<Table>
<Caption>
                                                 PACKAGING       WAFER
                                                  AND TEST    FABRICATION    OTHER       TOTAL
                                                 ----------   -----------   --------   ----------
                                                                  (IN THOUSANDS)
<S>                                              <C>          <C>           <C>        <C>
2002
  Net revenues.................................  $1,406,178    $233,529     $     --   $1,639,707
  Gross profit.................................      95,615      22,205           --      117,820
  Operating income (loss)......................    (416,920)     13,526           --     (403,394)
  Depreciation and amortization including debt
     issue costs...............................     331,516       2,080           --      333,596
  Capital expenditures including by
     acquisition...............................      95,104          --           --       95,104
  Total assets.................................   1,978,600     164,048      415,336    2,557,984
2001
  Net revenues.................................  $1,336,674    $181,188     $     --   $1,517,862
  Gross profit.................................      52,251      17,547           --       69,798
  Operating income (loss)......................    (277,148)      8,465           --     (268,683)
  Depreciation and amortization including debt
     issue costs...............................     462,912       2,171           --      465,083
  Capital expenditures including by
     acquisition...............................     296,346         105           --      296,451
  Total assets.................................   2,540,020      87,953      595,345    3,223,318
2000
  Net revenues.................................  $2,009,701    $377,593     $     --   $2,387,294
  Gross profit.................................     567,381      37,755           --      605,136
  Operating income.............................     297,746      24,275           --      322,021
  Depreciation and amortization including debt
     issue costs...............................     330,824       2,085           --      332,909
  Capital expenditures including by
     acquisition...............................     883,752       1,124           --      884,876
  Total assets.................................   2,732,733      46,231      614,320    3,393,284
</Table>

     The following table presents net revenues by country based on the  location
of the customer:

<Table>
<Caption>
                                                               NET REVENUES
                                                   ------------------------------------
                                                      2002         2001         2000
                                                   ----------   ----------   ----------
                                                              (IN THOUSANDS)
<S>                                                <C>          <C>          <C>
United States....................................  $  660,527   $  601,066   $1,280,896
Ireland..........................................      71,237       76,786       92,548
Japan............................................     333,232      297,277       76,133
Singapore........................................     150,813      151,183      325,903
Taiwan...........................................     108,674       72,947      108,674
Other foreign countries..........................     315,224      318,603      503,140
                                                   ----------   ----------   ----------
Consolidated.....................................  $1,639,707   $1,517,862   $2,387,294
                                                   ==========   ==========   ==========
</Table>

                                        83
<PAGE>
                             AMKOR TECHNOLOGY, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The  following table  presents property, plant  and equipment  based on the
location of the asset:

<Table>
<Caption>
                                                      PROPERTY, PLANT AND EQUIPMENT
                                                    ----------------------------------
                                                      2002        2001         2000
                                                    --------   ----------   ----------
                                                              (IN THOUSANDS)
<S>                                                 <C>        <C>          <C>
United States.....................................  $ 74,088   $   87,776   $   84,351
Philippines.......................................   281,089      471,302      579,619
Korea.............................................   484,938      698,448      813,983
Taiwan............................................    76,542       90,088           --
Japan.............................................    39,727       35,074          174
China.............................................    11,996        9,093           --
Other foreign countries...........................       563          493          383
                                                    --------   ----------   ----------
Consolidated......................................  $968,943   $1,392,274   $1,478,510
                                                    ========   ==========   ==========
</Table>

     The following supplementary information presents net revenues allocated  by
product family for the packaging and test segment:

<Table>
<Caption>
                                                               NET REVENUES
                                                  --------------------------------------
                                                     2002          2001          2000
                                                  ----------   ------------   ----------
                                                              (IN THOUSANDS)
<S>                                               <C>          <C>            <C>
Traditional packages............................  $  391,338    $  438,557    $  605,637
Advanced packages...............................     915,067       790,495     1,286,289
Test............................................      99,773       107,622       117,775
                                                  ----------    ----------    ----------
Consolidated....................................  $1,406,178    $1,336,674    $2,009,701
                                                  ==========    ==========    ==========
</Table>

                                        84
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

The Stockholders and the Board of Directors
Amkor Technology Philippines, Inc.

     We  have  audited  the  accompanying  balance  sheet  of  Amkor  Technology
Philippines, Inc. (the Company,  formerly Amkor Technology Philippines  (P1/P2),
Inc.,  a company incorporated under the laws of the Republic of the Philippines)
as of December 31,  2002, and the related  statements of operations, changes  in
stockholders'  equity and  cash flows for  the year then  ended. 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 audit  in accordance  with auditing  standards  generally
accepted  in the United States of America.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on  a
test  basis, evidence  supporting the amounts  and disclosures  in the financial
statements. An audit also includes assessing the accounting principles used  and
significant  estimates made  by management,  as well  as evaluating  the overall
financial  statement  presentation.  We  believe  that  our  audit  provides   a
reasonable basis for our opinion.

     In  our opinion, the financial statements referred to above present fairly,
in  all  material   respects,  the  financial   position  of  Amkor   Technology
Philippines, Inc. as of December 31, 2002, and the results of its operations and
its cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.

                                          /s/ SYCIP GORRES VELAYO & CO.

Makati City, Philippines
January 15, 2003

                                        85
<PAGE>

THE  FOLLOWING REPORT IS  A COPY OF  A REPORT PREVIOUSLY  ISSUED BY SYCIP GORRES
VELAYO & CO., A  MEMBER FIRM OF  ARTHUR ANDERSEN, AND HAS  NOT BEEN REISSUED  BY
SYCIP GORRES VELAYO & CO.

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Stockholders and the Board of Directors
Amkor Technology Philippines (P1/P2), Inc. and
Amkor Technology Philippines (P3/P4), Inc.

     We  have audited the combined balance sheet of Amkor Technology Philippines
(P1/P2),  Inc.  and  Amkor  Technology  Philippines  (P3/P4),  Inc.,  (companies
incorporated  under the laws of the Republic of the Philippines and collectively
referred to  as the  "Companies") as  of December  31, 2001  and 2000,  and  the
related  combined statements of income, stockholders'  equity and cash flows for
the years then ended. These financial  statements are the responsibility of  the
Companies'  management. Our  responsibility is  to express  an opinion  on these
financial statements based on our audits.

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

     In our opinion, the combined financial statements referred to above present
fairly,  in  all material  respects, the  combined  financial position  of Amkor
Technology Philippines (P1/P2), Inc.  and Amkor Technology Philippines  (P3/P4),
Inc.  as  of December  31,  2001 and  2000, and  the  combined results  of their
operations and their  cash flows for  the years then  ended, in conformity  with
accounting principles generally accepted in the United States of America.

                                          /s/  SYCIP GORRES VELAYO & CO.

Makati City, Philippines
March 19, 2002

                                        86
<PAGE>

                    AMKOR TECHNOLOGY, INC. AND SUBSIDIARIES

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

<Table>
<Caption>
                                           BALANCE AT   ADDITIONS
                                           BEGINNING    CHARGED TO                         BALANCE AT
                                           OF PERIOD     EXPENSE     WRITE-OFFS   OTHER   END OF PERIOD
                                           ----------   ----------   ----------   -----   -------------
<S>                                        <C>          <C>          <C>          <C>     <C>
Year ended December 31, 2000:
  Allowance for doubtful accounts........    $2,443       $  (17)     $    --        --      $2,426
Year ended December 31, 2001:
  Allowance for doubtful accounts........    $2,426       $4,000      $(1,037)    1,453      $6,842
Year ended December 31, 2002:
  Allowance for doubtful accounts........    $6,842       $  756      $  (220)       --      $7,378
</Table>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     Not Applicable.

                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS; COMPLIANCE WITH
         SECTION 16(a) OF THE EXCHANGE ACT

DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

     The following table sets forth  the names and the  ages as of February  28,
2003  of  our  executive officers  and  our  incumbent directors  who  are being
nominated for re-election to the board of directors:

<Table>
<Caption>
NAME                                          AGE                        POSITION
----                                          ---                        --------
<S>                                           <C>    <C>
James J. Kim..............................    67     Chief Executive Officer and Chairman
John N. Boruch............................    60     Chief Operating Officer, President and Director
Bruce J. Freyman..........................    42     Executive Vice President, Manufacturing and
                                                     Product Operations
Kenneth T. Joyce..........................    55     Executive Vice President and Chief Financial
                                                     Officer
Eric R. Larson............................    47     Executive Vice President, Corporate Development
                                                     and Wafer Fab
Winston J. Churchill(1)(2)................    62     Director
Thomas D. George(1).......................    62     Director
Gregory K. Hinckley(2)....................    56     Director
Juergen Knorr.............................    70     Director
John B. Neff(2)...........................    71     Director
James W. Zug(2)...........................    62     Director
</Table>

---------------
(1) Member of Compensation Committee.

(2) Member of Audit Committee.

     JAMES J. KIM.  James J. Kim, 67, has served as our Chief Executive  Officer
and  Chairman since September 1997. Mr. Kim  founded our predecessor in 1968 and
served as  its Chairman  from 1970  to  April 1998.  Mr. Kim  is a  director  of
Electronics Boutique Holdings Corp., an electronics retail chain.

     JOHN  N. BORUCH.   John N.  Boruch, 60, has  served as our  President and a
director since September  1997 and  our Chief Operating  Officer since  February
1999.  Mr.  Boruch  has served  as  President  of Amkor  Electronics,  Inc., our
predecessor, from February 1992 through April 1998. From 1991 to 1992, he served
as

                                        87
<PAGE>

our predecessor's Corporate Vice President in charge of sales. Mr. Boruch joined
us in 1984. Prior to this he was with Motorola, a communications and electronics
company, for  18 years.  Mr. Boruch  earned  a B.A.  in Economics  from  Cornell
University.  Mr.  Boruch  is  also  a  director  of  the  Fabless  Semiconductor
Association.

     BRUCE J. FREYMAN.  Bruce J. Freyman,  42, has served as our Executive  Vice
President  of Manufacturing and Product Operations  since January of 2002. Prior
to his appointment  as Executive  Vice President, Mr.  Freyman has  served in  a
number   of  positions   at  Amkor,   including  Corporate   Vice  President  of
Manufacturing and Product  Operations (March  2001 to  January 2002),  Corporate
Vice  President  of  Product  Operations (September  1998  to  March  2001), and
Corporate Vice President of Laminate Products (January 1997 to September  1998).
Before  joining  Amkor,  Mr. Freyman  spent  several years  with  Motorola, last
serving as  the Semiconductor  Packaging Manager  for Motorola's  Communications
Sector. Mr. Freyman holds an M.B.A. from Florida Atlantic University, and a B.S.
in Chemical Engineering from the University of Massachusetts.

     KENNETH  T. JOYCE.  Kenneth T. Joyce,  55, has served as our Executive Vice
President and Chief Financial Officer since July 1999. Prior to his election  as
our  Chief  Financial  Officer,  Mr.  Joyce served  as  our  Vice  President and
Operations Controller since  1997. Prior to  joining our company,  he was  Chief
Financial  Officer of Selas Fluid Processing  Corporation, a subsidiary of Linde
AG. Mr. Joyce is also former Vice President, Finance and Chief Financial Officer
of Selas Corporation of America (Amex: SLS) and was responsible for the sale  of
Selas'  Fluid Processing  business to Linde  AG. Mr. Joyce  began his accounting
career in 1971 at KPMG Peat Marwick. Mr. Joyce is a certified public accountant.
Mr. Joyce earned  a B.S.  in Accounting from  Saint Joseph's  University and  an
M.B.A. in Finance from Drexel University.

     ERIC  R. LARSON.  Eric R. Larson, 47, served as an Executive Vice President
until March 2003 and  was responsible for  Corporate Development since  December
2000  and our wafer fabrication services segment since December 2001. Mr. Larson
resigned his executive position in March 2003 and continues to serve Amkor in an
advisory role. Prior  to December 2000,  Mr. Larson had  previously served in  a
number  of roles in the company's wafer fabrication business including Executive
Vice President (1999 to 2000); Vice  President (1997 to 1998); and President  of
the  wafer fabrication division of our predecessor  (1996 to 1998). From 1979 to
1996, Mr. Larson worked for Hewlett-Packard Company in various senior management
capacities, most recently as Worldwide Marketing Manager for disk products.  Mr.
Larson  earned a B.A. in Political Science from Colorado State University and an
M.B.A. from the University of Denver.

     WINSTON J. CHURCHILL.  Winston J. Churchill, 62, has been a director of our
company since July  1998. Mr.  Churchill is a  managing general  partner of  SCP
Private  Equity  Management,  L.P.,  which  manages  private  equity  funds  for
institutional  investors.  Mr.  Churchill  is  also  Chairman  of  CIP   Capital
management, Inc., an SBA licensed private equity fund. Previously, Mr. Churchill
was  a managing  partner of  Bradford Associates,  which managed  private equity
funds on behalf of Bessemer  Securities Corporation and Bessemer Trust  Company.
From  1967 to  1983 he practiced  law at  the Philadelphia firm  of Saul, Ewing,
Remick &  Saul  where  he  served  as Chairman  of  the  Banking  and  Financial
Institutions  Department, Chairman of the Finance  Committee and was a member of
the Executive  Committee.  Mr. Churchill  is  a  director of  Griffin  Land  and
Nurseries,  Inc.,  MedStar Health  and of  various  SCP portfolio  companies. In
addition,  he  serves  as  a  director  of  various  charities  and  educational
institutions  including American Friends of New College, Oxford, England and the
Gesu School and the Young Scholars  Charter School. From 1989-1993 he served  as
Chairman  of the Finance Committee of  the Pennsylvania Public School Employees'
Retirement System. Mr. Churchill is also a member of the Executive Committee  of
the Council of Institutional Investors.

     THOMAS D. GEORGE.  Thomas D. George, 62, has been a director of our company
since  November 1997. Mr. George was Executive Vice President, and President and
General Manager, Semiconductor Products Sector  ("SPS") of Motorola, Inc.,  from
April  1993 to May 1997. Prior to that, he held several positions with Motorola,
Inc., 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,
and is a director of Ultratech Stepper.

     GREGORY K. HINCKLEY.  Gregory K. Hinckley,  56, has been a director of  our
company  since November 1997. Mr. Hinckley has served as Director, President and
Chief Operating Officer of Mentor Graphics
                                        88
<PAGE>

Corporation, an electronics design  automation software company, since  November
2000.  From January 1997 until November 2000,  he held the position of Executive
Vice President, Chief Operating  Officer and Chief  Financial Officer of  Mentor
Graphics  Corporation.  From  November  1995 until  January  1997,  he  held the
position of Senior Vice President with VLSI Technology, Inc., a manufacturer  of
complex  integrated circuits. From August 1992 until December 1996, Mr. Hinckley
held the position of  Vice President, Finance and  Chief Financial Officer  with
VLSI Technology, Inc.

     JUERGEN KNORR.  Juergen Knorr, 70, has been a director of our company since
February  2001.  Dr. Knorr  is the  former  CEO and  Group President  of Siemens
Semiconductor Group, and a former Member  of the Executive Board of Siemens  AG.
Following  his retirement from  Siemens in 1996,  Dr. Knorr has  taken an active
role in advancing the European semiconductor  industry as a member of the  Joint
European  Submicron  Silicon  Initiative,  as  past  president  of  the European
Electronics Components Manufacturer Association,  and as president and  chairman
of Micro Electronics Development for European Applications (MEDEA).

     JOHN  B. NEFF.  John B. Neff, 71,  has been a director of our company since
January 1999. Mr.  Neff was  portfolio manager for  Windsor Fund  and Gemini  II
mutual  fund from  1964 until his  retirement in  1995. He was  also Senior Vice
President and  Managing Partner  of Wellington  Management, one  of the  largest
investment  management firms in the  United States. From 1996  to 1998, Mr. Neff
was a  director with  Chrysler  Corporation. He  is a  member  of the  board  of
directors  of Crown Holdings, Inc. and Greenwich Associates and on the executive
board of directors of Invemed Catalyst Fund, LLP.

     JAMES W. ZUG.  James W. Zug, 62,  has been a director of our company  since
January  2003. Mr. Zug retired from PricewaterhouseCoopers LLP in 2000 following
a 37-year  career at  PricewaterhouseCoopers and  Coopers &  Lybrand. From  1998
until  his  retirement  Mr.  Zug  was Global  Leader  --  Global  Deployment for
PricewaterhouseCoopers. From 1993 to 1998 he was Managing Director International
for  Coopers   &   Lybrand.  PricewaterhouseCoopers   is   Amkor's   independent
accountants;  however, Mr. Zug was not  involved with servicing Amkor during his
tenure at PricewaterhouseCoopers. Mr. Zug serves  on the boards of directors  of
SPS  Technologies, Inc., Stackpole Ltd, Brandywine Fund Inc, and Brandywine Blue
Fund Inc. He is also  on the boards of  directors of the Philadelphia  Orchestra
Association,  the Kimmel Center for the  Performing Arts, the Episcopal Academy,
and the Merion Golf Club.

BOARD MEETINGS AND COMMITTEES

     Our company's board of directors meets approximately three times a year  in
regularly  scheduled meetings, but will meet  more often if necessary. The board
of directors held three meetings and acted by unanimous written consent on  four
occasions  during 2002  and all of  the directors  attended all of  the board of
directors meetings and Committee meetings of which they were members.

     The full board of directors considers  all major decisions of our  company.
However,  the board of directors has established a compensation committee and an
audit committee, each of which is chaired  by an outside director. The board  of
directors  currently  has  no  nominating committee  or  committee  performing a
similar function.

COMPENSATION COMMITTEE

     The Compensation Committee  is presently  comprised of  Messrs. George  and
Churchill. The Compensation Committee: (1) reviews and approves annual salaries,
bonuses,  and grants of  stock options pursuant  to our 1998  Stock Plan and (2)
reviews and approves the terms and  conditions of all employee benefit plans  or
changes  to these plans. During 2002, the Compensation Committee met three times
apart from regular meetings with the entire board of directors.

THE AUDIT COMMITTEE

     The Audit Committee is  comprised of Messrs.  Churchill, Hinckley and  Neff
all of whom meet the independence and experience requirements as defined in Rule
4200(a)(15)   of  the  National  Association   of  Securities  Dealers'  listing
standards. The Audit  Committee: (1) recommends  to the board  of directors  the

                                        89
<PAGE>

annual  appointment of  our independent auditors,  (2) discusses  and reviews in
advance the scope and the fees of  the annual audit, (3) reviews the results  of
the  audit with  the independent auditors  and discusses the  foregoing with the
company's management,  (4)  reviews  and  approves  non-audit  services  of  the
independent  auditors, (5) reviews the  activities, organizational structure and
qualifications  of   the  company's   internal  audit   function,  (6)   reviews
management's  procedures and policies  relating to the  adequacy of our internal
accounting controls and compliance with  applicable laws relating to  accounting
practices  and (7)  reviews and  discusses with  our independent  auditors their
independence. The Audit Committee met ten times apart from regular meetings with
the entire board. In  connection with the execution  of the responsibilities  of
the  Audit Committee  including the review  of the  company's quarterly earnings
prior to the  public release  of the  information, the  Audit Committee  members
communicated  throughout  2002  with the  company's  management  and independent
accountants.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934 requires our  officers
and  directors, and persons who own more  than ten percent of a registered class
of our equity securities, to file reports of ownership on Form 3 and changes  in
ownership on Form 4 or 5 with the Securities and Exchange Commission (the "SEC")
and  the  National  Association  of  Securities  Dealers,  Inc.  Such  officers,
directors and ten-percent stockholders are also required by SEC rules to furnish
Amkor with copies of all forms that  they file pursuant to Section 16(a).  Based
solely  on our  review of the  copies of such  forms received by  us, or written
representations from  certain  reporting  persons that  no  other  reports  were
required  for  such  persons,  Amkor  believes  that  all  Section  16(a) filing
requirements applicable to our officers, directors and ten-percent  stockholders
were complied with in a timely fashion.

                                        90
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

     Summary  Compensation.  The following  table sets forth compensation earned
during each of the three years in the period ending 2002 by our Chief  Executive
Officer   and  the   six  employees   representing  the   company's  other  most
highly-compensated  executive  officers  (collectively,  the  "Named   Executive
Officers").

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                                     LONG-TERM
                                                   ANNUAL           COMPENSATION
                                                COMPENSATION         SECURITIES
                                            ---------------------    UNDERLYING       ALL OTHER
NAME                                 YEAR    SALARY     BONUS(1)     OPTIONS(2)    COMPENSATION(3)
----                                 ----   --------   ----------   ------------   ---------------
<S>                                  <C>    <C>        <C>          <C>            <C>
James J. Kim(4)....................  2002   $790,000   $       --     250,000         $  8,454
  Chief Executive Officer            2001   $790,000   $   79,000     250,000         $  8,173
  and Chairman                       2000   $783,800   $1,740,000     250,000         $  8,200
John N. Boruch(5)..................  2002   $580,000   $       --     225,000         $  9,326
  Chief Operating Officer and        2001   $580,000   $   58,000     175,000         $ 14,780
  President                          2000   $575,400   $  633,625     150,000         $ 15,400
Bruce J. Freyman...................  2002   $385,000   $       --     200,000         $  9,807
  Executive Vice President,          2001   $352,692   $   35,000     150,000         $  6,000
  Manufacturing and Product          2000   $326,923   $  301,813     150,000         $  6,000
  Operations
Kenneth T. Joyce(6)................  2002   $235,000   $       --      70,000         $  8,286
  Executive Vice President and
     Chief                           2001   $235,000   $   23,500      40,000         $106,000
  Financial Officer                  2000   $231,200   $  218,500      40,000         $  6,000
Eric R. Larson.....................  2002   $275,000   $       --      70,000         $ 15,609
  Executive Vice President,
     Corporate                       2001   $275,000   $   27,500      40,000         $  6,000
  Development and Wafer Fab          2000   $273,100   $  219,600      40,000         $  6,000
</Table>

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

(1) Bonus  amounts include incentive  compensation earned in  the year indicated
    but that were approved by our board  of directors and paid in the  following
    year  and  payments under  the  Employee Profit  Sharing  Plan for  the year
    indicated for the prior year's results. No incentive compensation was earned
    in 2002.

(2) Long-term compensation represents stock options issued under the 1998  Stock
    Plan.

(3) All  other compensation for  all of the named  executives, except Mr. Kiwan,
    includes $6,000 paid to each executive's 401(k) plan.

(4) All other  compensation for  Mr. Kim  includes a  reimbursement for  vehicle
    expenses.

(5) All  other compensation for Mr. Boruch  includes imputed loan interest and a
    reimbursement for vehicle expenses.

(6) All other compensation for  Mr. Joyce in 2001  includes a reimbursement  for
    relocation costs.

                                        91
<PAGE>

                          OPTION GRANTS IN FISCAL 2002

     The  following table provides information  concerning each grant of options
to purchase our common stock made during 2002 to the Named Executive Officers.

<Table>
<Caption>
                                        INDIVIDUAL GRANTS                           POTENTIAL REALIZABLE VALUE
                              -------------------------------------                   MINUS EXERCISE PRICE AT
                                                                                      ASSUMED ANNUAL RATES OF
                              NUMBER OF     % OF TOTAL                             STOCK PRICE APPRECIATION FOR
                              SECURITIES     OPTIONS      EXERCISE                 -----------------------------
                              UNDERLYING    GRANTED TO    PRICE PER                       OPTION TERM(2)
                               OPTIONS     EMPLOYEES IN     SHARE     EXPIRATION   -----------------------------
            NAME              GRANTED(1)   FISCAL YEAR     ($/SH)        DATE           5%              10%
            ----              ----------   ------------   ---------   ----------   -------------   -------------
<S>                           <C>          <C>            <C>         <C>          <C>             <C>
James J. Kim................   250,000(3)       6.3%       $13.00      2/22/12      $2,043,908      $5,179,663
  Chief Executive Officer
  and Chairman
John N. Boruch..............   225,000(3)       5.6%       $13.00      2/22/12      $1,839,517      $4,661,697
  Chief Operating Officer
  and President
Bruce J. Freyman............   200,000(3)       5.0%       $13.00      2/22/12      $1,635,126      $4,143,731
  Executive Vice President,
  Manufacturing and Product
  Operations
Kenneth T. Joyce............    70,000(3)      1.75%       $13.00      2/22/12      $  572,295      $1,450,306
  Executive Vice President
  and Chief Financial
  Officer
Eric R. Larson..............    70,000(3)      1.75%       $13.00      2/22/12      $  572,295      $1,450,306
  Executive Vice President,
  Corporate Development and
  Wafer Fab
</Table>

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

(1) All options shown granted in fiscal 2002 become exercisable as to 25% of the
    share subject to the option exercisable starting one year after the date  of
    grant  and an additional 1/48 of such  shares subject to the option becoming
    exercisable each month thereafter.

(2) Potential realizable value is based on  the assumption that: (1) our  common
    stock  will appreciate at  the compound annual  rate shown from  the date of
    grant until the expiration  of the option  term and (2)  that the option  is
    exercised  at the exercise price and sold on the last day of its term at the
    appreciated price. We assume  stock appreciation of 5%  and 10% pursuant  to
    rules  promulgated  by the  Securities  and Exchange  Commission,  and these
    percentages do not reflect our estimate of future stock price growth.

(3) Each of the Named Executive Officers surrendered these options pursuant to a
    voluntary stock option  replacement program initiated  on November 8,  2002.
    This  program allowed  employees and  members of  our board  of directors to
    surrender their existing options and to receive new option grants six months
    and one day  after the tendered  options were cancelled.  We will issue  new
    option  grants  equal  to  the  same number  of  shares  surrendered  by the
    employees and members  of our board  of directors. The  exercise price  will
    equal  the fair market value of common stock  as of the new grant date which
    is expected to be no earlier than June 12, 2003.

                             YEAR-END OPTION VALUES

     The following table shows the number of shares covered by both  exercisable
and  non-exercisable stock  options held by  the named executive  officers as of
December 31, 2002. Also reported are the values for

                                        92
<PAGE>

"in-the-money" options which represent the positive spread between the  exercise
price  of any such existing  stock options and the  year-end price of our common
stock.

<Table>
<Caption>
                                                           NUMBER OF SECURITIES             DOLLAR VALUE OF
                                                                UNDERLYING                    UNEXERCISED
                                                          UNEXERCISED OPTIONS AT        IN-THE-MONEY OPTIONS AT
                                 SHARES                    DECEMBER 31, 2002(1)          DECEMBER 31, 2002(2)
                                ACQUIRED      VALUE     ---------------------------   ---------------------------
NAME                           ON EXERCISE   REALIZED   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                           -----------   --------   -----------   -------------   -----------   -------------
<S>                            <C>           <C>        <C>           <C>             <C>           <C>
James J. Kim.................        --            --          --            --             --             --
  Chief Executive Officer and
  Chairman
John N. Boruch...............    50,000      $414,450     137,317        10,418             --             --
  Chief Operating Officer and
  President
Bruce Freyman................        --            --     150,207         3,647             --             --
  Executive Vice President,
  Operations
Kenneth T. Joyce.............        --            --      22,166           834             --             --
  Executive Vice President
  and Chief Financial Officer
Eric R. Larson...............        --            --     103,874         3,126             --             --
  Executive Vice President,
  Corporate Development and
  Wafer Fab
</Table>

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

(1) On November  8, 2002,  we  initiated a  voluntary stock  option  replacement
    program  which allowed  employees and members  of our board  of directors to
    surrender their existing options and to receive new option grants six months
    and one day  after the  tendered options are  cancelled. We  will issue  new
    option  grants  equal  to  the  same number  of  shares  surrendered  by the
    employees and members  of our board  of directors. The  exercise price  will
    equal  the fair market value of common stock  as of the new grant date which
    is expected to be no earlier than  June 12, 2003. On December 11, 2002,  the
    following Named Executive Officers surrendered the following number of stock
    options pursuant to the program:

<Table>
<Caption>
                                                                SHARES
                                                              SURRENDERED
                                                              -----------
<S>                                                           <C>
James J. Kim................................................    750,000
John N. Boruch..............................................    900,000
Bruce J. Freyman............................................    500,000
Kenneth T. Joyce............................................    150,000
Eric Larson.................................................    150,000
</Table>

(2) None  of the options held by the Named Executive Officers as of December 31,
    2002 had an exercise price less than $4.76, the value of our common stock as
    of December 31, 2002 as reported by the Nasdaq Stock Market.

DIRECTOR COMPENSATION

     We do not compensate  directors who are also  employees or officers of  our
company  for their services  as directors. Non-employee  directors, however, are
eligible to receive: (1) an annual retainer  of $25,000 as of January 2003,  (2)
$2,000  per meeting of the  board of directors that  they attend, (3) $2,000 per
meeting of a committee of the board  of directors that they attend and (4)  $500
per  non-regularly scheduled  telephonic meeting  of the  board of  directors in
which they participate. We also reimburse non-employee directors for travel  and
related expenses incurred by them in attending board and committee meetings.

                                        93
<PAGE>

     1998  Director  Option  Plan:   Our  board  of directors  adopted  the 1998
Director Option Plan (the "Director Plan")  in January 1998. A total of  300,000
shares  of common stock have been reserved for issuance under the Director Plan.
The option grants under the  Director Plan are automatic and  non-discretionary.
As  of  January 1,  2003, the  Director Plan  provides for  an initial  grant of
options to  purchase 20,000  shares of  common stock  to each  new  non-employee
director  of the company when such individual first becomes an outside director.
In addition, each non-employee director will automatically be granted subsequent
options to purchase 10,000  shares of common  stock on each  date on which  such
director  is re-elected by the stockholders of  the company, provided that as of
such date such director has  served on the board of  directors for at least  six
months.  The exercise price of  the options is 100% of  the fair market value of
the common stock on  the grant date. The  term of each option  is ten years  and
each  option granted to an non-employee director vests over a three year period.
The Director Plan will terminate in January 2008 unless sooner terminated by the
board of directors.

     If all or substantially all of our assets are sold to another entity or  we
merge with or into another corporation, that acquiring entity or corporation may
either  assume all outstanding options under the Director Plan or may substitute
equivalent options. Following an assumption or substitution, if the director  is
terminated  other than upon a voluntary  resignation, any assumed or substituted
options will vest and become exercisable  in full. If the acquiring entity  does
not  either assume  all of  the outstanding options  under the  Director Plan or
substitute an equivalent option, each option issued under the Director Plan will
immediately vest  and  become  exercisable  in  full.  The  Director  Plan  will
terminate in January 2008 unless sooner terminated by the board of directors.

COMPENSATION COMMITTEE INTERLOCKS

     The  Compensation  Committee currently  consists  of Messrs.  Churchill and
George. No member of  the Compensation Committee was  an officer or employee  of
Amkor  or  any  of Amkor's  subsidiaries  during  fiscal 2002.  None  of Amkor's
Compensation Committee members or executive officers has served on the board  of
directors  or on  the compensation  committee of any  other entity  one of whose
executive officers  served on  our board  of directors  or on  our  Compensation
Committee.

                                        94
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
                        AND RELATED STOCKHOLDER MATTERS

     The following table sets forth certain information regarding the beneficial
ownership of our outstanding common stock as of February 28, 2003 by:

     - each  person or entity who is known by  us to beneficially own 5% or more
       of our outstanding common stock;

     - each of our directors; and

     - the Named Executive Officers.

<Table>
<Caption>
                                                              BENEFICIAL OWNERSHIP(A)
                                                              -----------------------
                                                              NUMBER OF    PERCENTAGE
NAME AND ADDRESS                                                SHARES     OWNERSHIP
----------------                                              ----------   ----------
<S>                                                           <C>          <C>
James J. Kim Family Control Group(b)(m).....................  73,238,641      44.3%
  1345 Enterprise Drive
  West Chester, PA 19380
J. & W. Seligman & Co. Incorporated(c)......................   9,515,860       5.8
  100 Park Avenue
  New York, New York 10017
Winston J. Churchill(d)(m)..................................      30,000         *
Thomas D. George(e).........................................      35,000         *
Gregory K. Hinckley(f)......................................      33,000         *
Dr. Juergen Knorr(m)........................................          --         *
John B. Neff(g).............................................     270,000         *
James W. Zug................................................       5,100         *
John N. Boruch(h)(m)........................................     168,595         *
Eric R. Larson(i)(m)........................................     113,369         *
Kenneth T. Joyce(j)(m)......................................      38,184         *
Bruce J. Freyman(k)(m)......................................     177,260         *
All directors and Named Executive Officers(l)...............  74,109,149      44.9
</Table>

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

 *   Represents less than 1%.

(a)  The number and  percentage of  shares beneficially owned  is determined  in
     accordance  with Rule 13d-3  under the Securities Exchange  Act of 1934, as
     amended. The  information  is  not  necessarily  indicative  of  beneficial
     ownership  for  any other  purpose. Under  this rule,  beneficial ownership
     includes any share over which the individual or entity has voting power  or
     investment power. In computing the number of shares beneficially owned by a
     person  and the percentage  ownership of that person,  shares of our common
     stock subject to options held by that person that will be exercisable on or
     before April 30, 2003 are  deemed outstanding. Unless otherwise  indicated,
     each  person or entity has sole voting and investment power with respect to
     shares shown as beneficially owned.

(b)  Represents 29,727,093 shares  held by James  J. and Agnes  C. Kim;  139,516
     shares  issuable upon the  conversion of convertible debt  held by Mrs. Kim
     that is convertible on or before April 30, 2003; 14,457,344 shares held  by
     the  David D. Kim Trust of December 31, 1987, 14,457,344 shares held by the
     John T. Kim Trust of December 31, 1987; 6,257,344 shares held by the  Susan
     Y.  Kim Trust of December 31, 1987;  and 8,200,000 shares held by the Trust
     of Susan Y. Kim dated April 16,  1998 established for the benefit of  Susan
     Y.  Kim's minor children,  with Susan Y.  Kim as the  Trustee. James J. and
     Agnes C. Kim are husband and wife  and, accordingly, each may be deemed  to
     beneficially

                                        95
<PAGE>

     own shares of our common stock held in the name of the other. David D. Kim,
     John  T. Kim and  Susan Y. Kim are  children of James J.  and Agnes C. Kim.
     Each of the David D. Kim Trust of  December 31, 1987, John T. Kim Trust  of
     December 31, 1987 and Susan Y. Kim Trust of December 31, 1987 has in common
     Susan  Y. Kim and John  F.A. Earley as co-trustees,  in addition to a third
     trustee (John T. Kim in the case of the Susan Y. Kim Trust and the John  T.
     Kim  Trust, and David  D. Kim in the  case of the David  D. Kim Trust) (the
     trustees of each trust  may be deemed  to be the  beneficial owners of  the
     shares  held by such  trust). All of  the above-referenced trusts, together
     with their  respective  trustees and  James  J. and  Agnes  C. Kim  may  be
     considered  a "group" under Section 13(d) of  the Exchange Act on the basis
     that the trust agreement for each  of these trusts encourages the  trustees
     of the trusts to vote the shares of our common stock held by them, in their
     discretion,  in concert with James Kim's extended family. This group may be
     deemed to have beneficial ownership  of 73,238,641 shares or  approximately
     44.3%  of the outstanding shares of our common stock. Each of the foregoing
     persons stated  that the  filing of  their beneficial  ownership  reporting
     statements  shall not be construed as an admission that such person is, for
     the purposes of Section 13(d) or 13(g) of the Exchange Act, the  beneficial
     owner  of the shares of our common  stock reported as beneficially owned by
     the other such persons.

(c)  J. & W. Seligman  & Co. Incorporated ("JWS")  reported in a Schedule  13G/A
     filed  with the Commission on February  11, 2003 that it beneficially owned
     these shares as  of December 31,  2002. JWS also  reported that William  C.
     Morris,  as the owner of a majority of the outstanding voting securities of
     JWS, may be  deemed to beneficially  own the shares  beneficially owned  by
     JWS.  JWS  is  the  investment  adviser  for  Seligman  Communications  and
     Information Fund,  Inc. (the  "Fund").  Of the  9,515,860 shares  that  JWS
     beneficially owns, the Fund beneficially owns 9,060,000 shares.

(d)  Includes 20,000 shares issuable upon the exercise of stock options that are
     exercisable by Mr. Churchill on or before April 30, 2003.

(e)  Includes 25,000 shares issuable upon the exercise of stock options that are
     exercisable by Mr. George on or before April 30, 2003.

(f)  Includes 25,000 shares issuable upon the exercise of stock options that are
     exercisable by Mr. Hinckley on or before April 30, 2003.

(g)  Includes 20,000 shares issuable upon the exercise of stock options that are
     exercisable by Mr. Neff on or before April 30, 2003.

(h) Includes 156,140 shares issuable upon the exercise of stock options that are
    exercisable by Mr. Boruch on or before April 30, 2003.

(i)  Includes  106,374 shares issuable  upon the exercise  of stock options that
     are exercisable by Mr. Larson on or before April 30, 2003.

(j)  Includes 22,833 shares issuable upon the exercise of stock options that are
     exercisable by Mr. Joyce on or before April 30, 2003.

(k)  Includes 153,124 shares issuable  upon the exercise  of stock options  that
     are exercisable by Mr. Freyman on or before April 30, 2003.

(l)  Includes  682,134 shares issuable  upon the exercise  of stock options that
     are exercisable on or before April 30, 2003.

(m) On November  8, 2002,  we  initiated a  voluntary stock  option  replacement
    program  which allowed  employees and members  of our board  of directors to
    surrender their existing options and to receive new option grants six months
    and one day  after the  tendered options are  cancelled. We  will issue  new
    option  grants  equal  to  the  same number  of  shares  surrendered  by the
    employees and members  of our board  of directors. The  exercise price  will
    equal  the fair market value of common stock  as of the new grant date which
    is expected to be no earlier than June 12, 2003. The vesting term of the new
    options will  be similar  to the  tendered options  except the  new  options
    contain   an   additional   one   year   vesting   period   prior   to   any

                                        96
<PAGE>

    options becoming  exercisable. On  December 11,  2002, the  following  Named
    Executive  Officers and Directors surrendered  the following number of stock
    options pursuant to the program:

<Table>
<Caption>
                                                                SHARES
                                                              SURRENDERED
                                                              -----------
<S>                                                           <C>
James J. Kim................................................    750,000
John N. Boruch..............................................    900,000
Bruce J. Freyman............................................    500,000
Kenneth T. Joyce............................................    150,000
Eric Larson.................................................    150,000
Winston J. Churchill........................................     15,000
Juergen Knorr...............................................     20,000
</Table>

     The calculation of beneficial  ownership does not  include any shares  that
were surrendered pursuant to the voluntary stock option replacement program.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We  have  had a  long-standing relationship  with Anam  Semiconductor, Inc.
("ASI"). ASI was founded in 1956 by Mr. H. S. Kim, the father of Mr. James  Kim,
our  Chairman and  Chief Executive Officer.  Through our  supply agreements with
ASI, we historically had a first right to substantially all of the packaging and
test services capacity of ASI and the exclusive right to all of the wafer output
of ASI's wafer fabrication facility.  With our acquisition of  K1, K2 and K3  in
May  2000, we no longer received packaging and test services from ASI. Under the
wafer fabrication services  supply agreement  which was  consummated in  January
1998  and terminated as of February 28, 2003, we had the exclusive right but not
the requirement to purchase all of  the wafer output of ASI's wafer  fabrication
facility  on pricing terms negotiated annually. As  part of our strategy to sell
our investment in ASI and to divest our wafer fabrication services business,  we
entered into a series of transactions beginning in the second half of 2002:

     - In  September 2002,  we sold  20 million  shares of  ASI common  stock to
       Dongbu Group for $58.1 million in net cash proceeds and 42 billion Korean
       Won (approximately $35.4 million at a  spot exchange rate as of  December
       31,  2002) of interest  bearing notes from  Dongbu Corporation payable in
       two equal principal  payments in  September 2003 and  February 2004.  The
       Dongbu  Group comprises  Dongbu Corporation,  Dongbu Fire  Insurance Co.,
       Ltd. and  Dongbu  Life Insurance  Co.,  Ltd.,  all of  which  are  Korean
       corporations   and   are  collectively   referred  herein   as  "Dongbu."
       Additionally, we  divested one  million  shares of  ASI common  stock  in
       connection  with the  payment of  certain advisory  fees related  to this
       transaction.

     - As of February 28, 2003, we sold our wafer fabrication services  business
       to ASI for total consideration of $62 million.

     - In  separate transactions designed to  facilitate a future merger between
       ASI and Dongbu, (i) we  acquired a 10% interest  in Acqutek from ASI  for
       $1.9  million; (ii) we  acquired the Precision  Machine Division (PMD) of
       Anam Instruments, a  related party to  Amkor, for $8  million; and  (iii)
       Anam  Instruments, which  had been partially  owned by  ASI, utilized the
       proceeds from  the  sale of  PMD  to  us to  buy  back all  of  the  Anam
       Instruments  shares  owned  by  ASI. Acqutek  supplies  materials  to the
       semiconductor industry  and  is  publicly  traded  in  Korea.  An  entity
       controlled  by the family of James  Kim, our Chairman and Chief Executive
       Officer, held a  25% ownership  interest in Acqutek  at the  time of  our
       acquisition  of our interest  in Acqutek. We  have historically purchased
       and  continue  to   purchase  leadframes  from   Acqutek.  PMD   supplies
       sophisticated  die mold systems and tooling to the semiconductor industry
       and historically over 90% of its sales were to Amkor. At the time of  our
       acquisition  of PMD, Anam Instruments  was owned 20% by  ASI and 20% by a
       family member of James Kim.

                                        97
<PAGE>

     Each of  the  transactions  with  Dongbu,  ASI  and  Anam  Instruments  are
interrelated  and it is possible that if each of the transactions were viewed on
a stand-alone basis without regard to the other transactions, we could have  had
different conclusions as to fair value.

     As of February 28, 2003, we sold our wafer fabrication services business to
ASI.  In addition, pursuant to the  definitive agreements with Dongbu, (1) Amkor
and Dongbu agreed to use reasonable best efforts to cause Dongbu Electronics and
ASI to be merged together as soon as practicable, (2) Amkor and Dongbu agreed to
cause ASI to use the proceeds ASI received  from its sale of stock to Dongbu  to
purchase  shares in Dongbu  Electronics and (3)  Amkor and Dongbu  agreed to use
their best efforts  to provide  releases and indemnifications  to the  chairman,
directors  and  officers of  ASI, either  past  or incumbent,  from any  and all
liabilities arising  out of  the  performance of  their  duties at  ASI  between
January  1,  1995 and  December 31,  2001.  The last  provision would  provide a
release and indemnification for James Kim, our CEO and Chairman, and members  of
his  family. We  are not aware  of any  claims or other  liabilities which these
individuals  would  be   released  from   or  for  which   they  would   receive
indemnification.

     At  January 1, 2002 Amkor owned 47.7  million shares or 42% of ASI's voting
stock. During 2002, we divested 21 million  shares of ASI stock and at  December
31,  2002 Amkor owned 26.7  million shares of ASI or  21%. The carrying value of
our remaining investment in ASI at December 31, 2002 was $77.5 million, or $2.90
per share. On  March 24, 2003,  we sold an  additional 7 million  shares of  ASI
common  stock to an investment  bank for 24.4 billion  Korean won ($19.5 million
based on the spot exchange rate  as of the transaction date) which  approximates
the  carrying  value of  those  shares. As  part of  that  sale, we  purchased a
nondeliverable call option for  $6.7 million that expires  December 2003 and  is
indexed  to ASI's share  price with a strike  price of $1.97  per share. The net
proceeds from the exercise of the option could be less than the current carrying
value and could expire unexercised losing  our entire investment in the  option.
As  of March  24, 2003, we  owned 19.7  million shares of  ASI, or  16% of ASI's
voting stock. Beginning March 24, 2003, we ceased accounting for our  investment
in  ASI under the equity  method of accounting and  commenced accounting for our
investment as a marketable security that is available for sale.

     Historically, we have had other relationships with ASI affiliated companies
for financial services, construction services, materials and equipment. Each  of
these  transactions was conducted on an arms-length basis in the ordinary course
of business. In addition, ASI's  former construction subsidiary is currently  in
reorganization  and its affairs are  managed by a number  of creditor banks; all
transactions between Amkor and this entity are subject to review and approval by
these banks. Total  purchases from ASI  and its affiliates  included in cost  of
revenue  for  the years  ended  December 31,  2002,  2001 and  2000  were $212.6
million, $161.6  million and  $499.8 million.  Additionally, financial  services
performed  by ASI and its  affiliates included in interest  expense for the year
ended December 31, 2000  was $1.6 million.  Construction services and  equipment
purchases  received from  ASI and  its affiliates  capitalized during  the years
ended December 31,  2002, 2001  and 2000 were  $2.8 million,  $14.7 million  and
$38.8 million, respectively.

     Total purchases from Acqutek included in cost of revenue for 2002, 2001 and
2000  were  $16.0 million,  $14.0 million  and  $29.2 million,  respectively. We
believe these transactions with Acqutek  were conducted on an arms-length  basis
in the ordinary course of business.

     We entered into indemnification agreements with our officers and directors.
These agreements contain provisions which may require us, 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).  We also
agreed to advance them any expenses for proceedings against them that we  agreed
to indemnify them from.

     As  of December 31, 2002, Mr. James Kim and members of his immediate family
beneficially owned approximately 44% of our outstanding common stock.

     Amkor Electronics, Inc. (AEI), which was merged into our company just prior
to the initial public offering of our  company in May 1998, elected to be  taxed
as  an S Corporation under  the provisions of the  Internal Revenue Code of 1986
and comparable state  tax provisions. As  a result, AEI  did not recognize  U.S.
federal  corporate income taxes. Instead, the  stockholders of AEI were taxed on
their proportionate share

                                        98
<PAGE>

of AEI's taxable income. Accordingly, no provision for U.S. federal income taxes
was recorded for AEI. Just prior to the initial public offering, AEI  terminated
its  S Corporation status  at which point  the profits of  AEI became subject to
federal and state  income taxes  at the corporate  level. We  consummated a  tax
indemnification  agreement between  us, our  predecessor and  James Kim  and his
family  (collectively,  the  "Kim  Family").  James  Kim,  is  our  founder  and
significant stockholder, and currently serves as our Chairman and CEO. Under the
terms  of the tax indemnification agreement, Amkor indemnifies the former owners
of AEI for the settlement of AEI's  S Corporation federal and state tax  returns
and  any  adjustments  to the  reported  taxable  income. At  the  time  AEI was
converted to a C Corporation, AEI and the Kim Family identified certain  federal
and  state  tax  overpayments  associated  with  the  results  of  AEI  during S
Corporation status years  and AEI, in  May 1998,  paid such amounts  to the  Kim
Family.  These amounts, which  principally related to  the finalization of AEI's
federal tax  return, are  reflected  as a  receivable  from stockholder  in  the
stockholders'  equity section of our balance sheets.  As the refunds are paid by
the associated  taxing authorities  and  received by  the  Kim Family,  the  Kim
Family,  in turn, remits  the funds to  Amkor. During 2002,  $0.4 million of tax
refunds were received by  the Kim Family  and used to  pay down the  stockholder
loan.  The  loan  balance will  be  further  reduced as  AEI's  tax  returns are
finalized and refunds remitted by the associated taxing authorities.

     We lease office  space in West  Chester, Pennsylvania from  certain of  our
stockholders.  The lease expires in 2006. We have the option to extend the lease
for an additional 10  years through 2016.  Amounts paid for  this lease in  2002
were $1.2 million.

     We  have historically maintained split-value life insurance policies on the
joint lives of James  J. Kim and Agnes  C. Kim for the  benefit of the Trust  of
James  J. Kim dated September  30, 1992 (the "1992  Trust"). No premium payments
were made by Amkor in 2002. In the event  of the death of James J. Kim or  Agnes
C.  Kim we will receive in  death benefits an amount equal  to the lesser of the
total net premiums paid  in cash by us  or the net cash  surrender value of  the
policy as of the date of such death.

     In  January 1998, we loaned $120,000 to Mr. Boruch, our President and Chief
Operating Officer, of which $99,000 was outstanding as of December 31, 2002  and
repaid in 2003. This loan was interest bearing at a rate of 7% per year.

                                    PART IV

ITEM 14.  CONTROLS AND PROCEDURES

     (a)  Within  the  90-day period  prior to  the date  of this  report, Amkor
          carried  out  an  evaluation,  under  the  supervision  and  with  the
          participation of our management, including the Chief Executive Officer
          and  Chief Financial Officer,  of the effectiveness  of the design and
          operation of our disclosure controls  and procedures pursuant to  Rule
          13a-14  of the Securities  Exchange Act of  1934 (the "Exchange Act").
          Based upon  that evaluation,  the Chief  Executive Officer  and  Chief
          Financial   Officer  concluded   that  our   disclosure  controls  and
          procedures  are  effective  in   timely  alerting  them  to   material
          information  relating  to  our  company  (including  its  consolidated
          subsidiaries) required to be included in our Exchange Act filings.

     (b)  There were no significant changes  in our company's internal  controls
          or  in other  factors that  could significantly  affect these controls
          subsequent to the date of their evaluation. There were no  significant
          deficiencies  or  material  weaknesses, and  therefore  there  were no
          corrective actions taken.

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  Financial Statements and Financial Statement Schedules

     The financial statements and schedule filed  as part of this Annual  Report
on Form 10-K are listed in the index under Item 8.

                                        99
<PAGE>

     (b)  Reports on Form 8-K

     We filed the following reports on Form 8-K with the Securities and Exchange
Commission during the quarterly period ended December 31, 2002:

     Current  Report on Form 8-K  dated and filed October  18, 2002 related to a
press release dated October 18, 2002 announcing the termination of  negotiations
with Fujitsu Limited to acquire a business located in Kagoshima, Japan.

     Current  Report on Form  8-K/A filed October 29,  2002 amending the Current
Report on  Form  8-K dated  and  filed on  March  29, 2002  filing  the  amended
consolidated  financial statements of  Anam Semiconductor, Inc.  for each of the
three years ended December 31, 2001.

     Current Report on Form 8-K dated October 29, 2002 (filed October 30,  2002)
related  to  press  releases dated  October  29, 2002  announcing  our financial
results for the third quarter ended September 30, 2002.

     (c)  Exhibits

<Table>
<C>    <S>
 3.1   Certificate of Incorporation.(1)
 3.2   Certificate of Correction to Certificate of
       Incorporation.(4)
 3.3   Restated Bylaws.(4)
 4.1   Specimen Common Stock Certificate.(3)
 4.2   Convertible Subordinated Notes Indenture dated as of May 13,
       1998 between the Registrant and State Street Bank and Trust
       Company, including form of 5 3/4% Convertible Subordinated
       Notes due 2003.(3)
 4.3   Senior Notes Indenture dated as of May 13, 1999 between the
       Registrant and State Street Bank and Trust Company,
       including form of 9 1/4% Senior Note Due 2006.(5)
 4.4   Senior Subordinated Notes Indenture dated as of May 6, 1999
       between the Registrant and State Street Bank and Trust
       Company, including form of 10 1/2% Senior Subordinated Note
       Due 2009.(5)
 4.5   Convertible Subordinated Notes Indenture dated as of March
       22, 2000 between the Registrant and State Street Bank and
       Trust Company, including form of 5% Convertible Subordinated
       Notes due 2007.(6)
 4.6   Registration Agreement between the Registrant and the
       Initial Purchasers named therein dated as of March 22,
       2000.(6)
 4.7   Indenture dated as of February 20, 2001 for 9 1/4% Senior
       Notes due February 15, 2008.(7)
 4.8   Registration Rights Agreement dated as of February 20, 2001
       by and among Amkor Technology, Inc., Salomon Smith Barney
       Inc. and Deutsche Banc Alex. Brown Inc.(7)
 4.9   Convertible Subordinated Notes Indenture dated as of May 25,
       2001 between the Registrant and State Street Bank and Trust
       Company, as Trustee, including the form of the 5.75%
       Convertible Subordinated Notes due 2006.(8)
 4.10  Registration Rights Agreement between the Registrant and
       Initial Purchasers named therein dated as of May 25,
       2001.(8)
 4.11  Amended and restated credit agreement dated as of March 30,
       2001 between the Registrant and the Initial Lenders and
       Initial Issuing Banks and Salomon Smith Barney Inc.,
       Citicorp USA, Inc. and Deutsche Banc Alex. Brown, Inc.(8)
 4.12  Amendment No. 1 to the Amended and restated credit agreement
       dated as of March 30, 2001 between the Registrant and the
       Initial Lenders and Initial Issuing Banks and Salomon Smith
       Barney Inc., Citicorp USA, Inc. and Deutsche Banc Alex.
       Brown, Inc.(8)
 4.13  Amendment No. 2 to the Amended and restated credit agreement
       dated as of March 30, 2001 between the Registrant and the
       Initial Lenders and Initial Issuing Banks and Salomon Smith
       Barney, Inc., Citicorp USA, Inc. and Deutsche Banc Alex.
       Brown, Inc.(9)
 4.14  Amendment No. 3 to the Amended and restated credit agreement
       dated as of June 24, 2002 between the Registrant and the
       Issuing Banks and Salomon Smith Barney, Inc., Citicorp USA,
       Inc. and Deutsche Banc Alex. Brown, Inc.(10)
</Table>

                                       100
<PAGE>

<Table>
<S>        <C>
     4.15  Amendment No. 4 to the Amended and restated credit agreement dated as of September 26, 2002 between the
           Registrant and the Issuing Banks and Salomon Smith Barney, Inc., Citicorp USA, Inc. and Deutsche Banc
           Alex. Brown, Inc.(11)
    10.1   Form of Indemnification Agreement for directors and officers.(3)
    10.2   1998 Stock Plan and form of agreement thereunder.(3)
    10.3   Form of Tax Indemnification Agreement between Amkor Technology, Inc., Amkor Electronics, Inc. and certain
           stockholders of Amkor Technology, Inc.(3)
    10.4   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.(1)
    10.5   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.(1)
    10.6   Contract of Lease between Corinthian Commercial Corporation and Amkor/Anam Pilipinas Inc., dated October
           1, 1990.(1)
    10.7   Contract of Lease between Salcedo Sunvar Realty Corporation and Automated Microelectronics, Inc., dated
           May 6, 1994.(1)
    10.8   Lease Contract between AAP Realty Corporation and Amkor/Anam Advanced Packaging, Inc., dated November 6,
           1996.(1)
    10.9   Immunity Agreement between Amkor Electronics, Inc. and Motorola, Inc., dated June 30, 1993.(1)
    10.10  1998 Director Option Plan and form of agreement thereunder.(1)
    10.11  1998 Employee Stock Purchase Plan.(3)
    10.12  1998 Stock Option Plan for French Employees.(1)
    10.13  Share Sale and Purchase Agreement between the Registrant and Dongbu Corporation dated as of July 10,
           2002(10)
    10.14  Shareholders Agreement between the Registrant, Dongbu Corporation, Dongbu Fire Insurance Co., Ltd., and
           Dongbu Life Insurance Co., Ltd. dated as of July 29, 2002(10)
    10.15  Amendment to share sale and purchase agreement and shareholders agreement the Registrant and Dongbu
           Corporation dated as of September 27, 2002(11)
    10.16  Business Transfer Agreement between Amkor Technology Limited, Anam Semiconductor, Inc., Anam USA, Inc. and
           the Registrant dated as of January 27, 2003
    10.17  Assignment and Assumption Agreement between the Registrant, Anam Semiconductor, Inc. and Texas Instruments
           Incorporated dated as of February 28, 2003
    12.1   Computation of Ratio of Earnings to Fixed Charges.
    21.1   List of Subsidiaries of the Registrant.
    23.1   Consent of PricewaterhouseCoopers LLP.
    23.2   Consent of Sycip Gorres Velayo & Co., a member practice of Ernst & Young Global
    23.3   Consent of Sycip Gorres Velayo & Co., a member firm of Arthur Andersen(12)
    23.4   Consent of Samil Accounting Corporation
    99.1   Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
           as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
</Table>

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

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

 (2) Incorporated by reference to the  Company's Registration Statement on  Form
     S-1  filed on October  6, 1997, as  amended on December  31, 1997 (File No.
     333-37235).

 (3) Incorporated by reference to the  Company's Registration Statement on  Form
     S-1  filed  on October  6, 1997,  as amended  on March  31, 1998  (File No.
     333-37235).

 (4) Incorporated by reference to the  Company's Registration Statement on  Form
     S-1  filed  on April  8,  1998, as  amended on  August  26, 1998  (File No.
     333-49645).

                                       101
<PAGE>

 (5) Incorporated  by reference to  the Company's Quarterly  Report on Form 10-Q
     filed May 17, 1999.

 (6) Incorporated by reference to the Company's Annual Report on Form 10-K filed
     March 30, 2000.

 (7) Incorporated by reference to  the Company's Quarterly  Report on Form  10-Q
     filed May 15, 2001.

 (8) Incorporated  by reference to  the Company's Quarterly  Report on Form 10-Q
     filed August 14, 2001.

 (9) Incorporated by reference to  the Company's Quarterly  Report on Form  10-Q
     filed November 14, 2001.

(10) Incorporated  by reference to  the Company's Quarterly  Report on Form 10-Q
     filed August 14, 2002.

(11) Incorporated by reference to  the Company's Quarterly  Report on Form  10-Q
     filed November 14, 2002.

(12) The  financial statements of Amkor Technology Philippines (P1/P2), Inc. and
     Amkor Technology Philippines  (P3/P4), Inc.,  consolidated subsidiaries  of
     the  Registrant, for each of the two years in the period ended December 31,
     2001, have been audited by the independent public accountants Sycip  Gorres
     Velayo  & Co.,  a member  firm of Arthur  Andersen, (referred  to herein as
     Arthur Andersen). However,  the Registrant  has been unable  to obtain  the
     written  consent of  Arthur Andersen with  respect to  the incorporation by
     reference of  such financial  statements in  the Registrant's  Registration
     Statements  on Form  S-3 (File Nos.  333-39642 and 333-81334)  and Form S-8
     filings  (File  Nos.   333-62891,  333-63430,   333-76254,  333-86161   and
     333-100814)  (collectively, the  "Registration Statements".  Therefore, the
     Registrant has dispensed with the  requirement to file the written  consent
     of  Arthur Andersen  in reliance  upon Rule 437a  of the  Securities Act of
     1933, as amended. As a result, you may not be able to recover damages  from
     Arthur Andersen under Section 11 of the Securities Act of 1933, as amended,
     for  any untrue  statements of  material fact or  any omissions  to state a
     material fact,  if  any,  contained  in the  financial  statements  of  the
     registrant   for   the  aforementioned   financial  statements   which  are
     incorporated by reference in the Registration Statements.

                                       102
<PAGE>

                                   SIGNATURES

     Pursuant  to  the requirements  of Section  13 or  15(d) of  the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report on  Form
10-K to be signed, on its behalf by the undersigned, thereunto duly authorized.

                                          AMKOR TECHNOLOGY, INC.

                                          By:       /s/ JAMES J. KIM

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

Date: March 27, 2003

                               POWER OF ATTORNEY

     KNOW  ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose signature
appears below constitutes and appoints James J. Kim and Kenneth Joyce, and  each
of them, his attorneys-in-fact, and agents, each with the power of substitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and  all amendments to this Report on Form 10-K, and all documents in connection
therewith, with  the  Securities and  Exchange  Commission, granting  unto  said
attorneys-in-fact  and agents, and each of them,  full power and authority to do
and perform each and every act and  thing requisite and necessary to be done  in
and  about the  premises, as fully  to all intents  and purposes as  he might or
could  do   in  person,   hereby  ratifying   and  conforming   all  that   said
attorneys-in-fact  and agents  of any  of them,  or his  or their  substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the  Securities Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

<Table>
<Caption>
                       NAME                                        TITLE                      DATE
                       ----                                        -----                      ----
<S>     <C>                                         <C>                                  <C>
                 /s/ JAMES J. KIM
 ------------------------------------------------       Chief Executive Officer and
                   James J. Kim                                  Chairman                March 27, 2003

                /s/ JOHN N. BORUCH
 ------------------------------------------------
                  John N. Boruch                          President and Director         March 27, 2003

                /s/ KENNETH JOYCE                         Chief Financial Officer
 ------------------------------------------------   (Principal Financial and Accounting
                  Kenneth Joyce                                  Officer)                March 27, 2003

             /s/ WINSTON J. CHURCHILL
 ------------------------------------------------
               Winston J. Churchill                              Director                March 27, 2003

               /s/ THOMAS D. GEORGE
 ------------------------------------------------
                 Thomas D. George                                Director                March 27, 2003

             /s/ GREGORY K. HINCKLEY
 ------------------------------------------------
               Gregory K. Hinckley                               Director                March 27, 2003
</Table>

                                       103
<PAGE>

<Table>
<Caption>
                       NAME                                        TITLE                      DATE
                       ----                                        -----                      ----

<S>     <C>                                         <C>                                  <C>
                 /s/ JOHN B. NEFF
 ------------------------------------------------
                   John B. Neff                                  Director                March 27, 2003

                /s/ JUERGEN KNORR
 ------------------------------------------------
                  Juergen Knorr                                  Director                March 27, 2003

                 /s/ JAMES W. ZUG
 ------------------------------------------------
                   James W. Zug                                  Director                March 27, 2003
</Table>

                                       104
<PAGE>

                          SECTION 302(a) CERTIFICATION

I, James J. Kim, certify that:

     1. I have  reviewed this annual  report on Form  10-K of Amkor  Technology,
Inc.;

     2.  Based on my knowledge,  this annual report does  not contain any untrue
statement of a material fact or omit to state a material fact necessary to  make
the  statements made, in light of  the circumstances under which such statements
were made, not  misleading with  respect to the  period covered  by this  annual
report;

     3.  Based on  my knowledge, the  financial statements,  and other financial
information included  in this  annual  report, fairly  present in  all  material
respects  the financial condition,  results of operations and  cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's  other certifying  officers and I  are responsible  for
establishing  and maintaining disclosure controls  and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          a) Designed such  disclosure controls  and procedures  to ensure  that
     material information relating to the registrant, including its consolidated
     subsidiaries,  is  made  known  to  us  by  others  within  those entities,
     particularly during  the  period  in  which this  annual  report  is  being
     prepared;

          b) Evaluated the effectiveness of the registrant's disclosure controls
     and procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and

          c)   Presented  in  this  annual  report  our  conclusions  about  the
     effectiveness of  the  disclosure  controls and  procedures  based  on  our
     evaluation as of the Evaluation Date;

     5.  The registrant's other certifying officers  and I have disclosed, based
on our  most recent  evaluation,  to the  registrant's  auditors and  the  audit
committee  of registrant's board of  directors (or persons performing equivalent
functions):

          a) All significant deficiencies in the design or operation of internal
     controls which could adversely affect  the registrant's ability to  record,
     process,  summarize and report  financial data and  have identified for the
     registrant's auditors any material weaknesses in internal controls; and

          b) Any fraud,  whether or  not material, that  involves management  or
     other  employees who have  a significant role  in the registrant's internal
     controls; and

     6. The registrant's other certifying officers and I have indicated in  this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                          /s/ JAMES J. KIM
                                          --------------------------------------
                                          By: James J. Kim
                                          Title: Chief Executive Officer

Date: March 27, 2003

                                       105
<PAGE>

                          SECTION 302(a) CERTIFICATION

I, Kenneth T. Joyce, certify that:

     1.  I have reviewed  this annual report  on Form 10-K  of Amkor Technology,
Inc.;

     2. Based on my  knowledge, this annual report  does not contain any  untrue
statement  of a material fact or omit to state a material fact necessary to make
the statements made, in light of  the circumstances under which such  statements
were  made, not  misleading with  respect to the  period covered  by this annual
report;

     3. Based on  my knowledge,  the financial statements,  and other  financial
information  included  in this  annual report,  fairly  present in  all material
respects the financial condition,  results of operations and  cash flows of  the
registrant as of, and for, the periods presented in this annual report;

     4.  The registrant's  other certifying officers  and I  are responsible for
establishing and maintaining disclosure controls  and procedures (as defined  in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          a)  Designed such  disclosure controls  and procedures  to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is  made  known  to  us  by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;

          b) Evaluated the effectiveness of the registrant's disclosure controls
     and procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and

          c)  Presented  in  this  annual  report  our  conclusions  about   the
     effectiveness  of  the  disclosure  controls and  procedures  based  on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on  our  most recent  evaluation,  to the  registrant's  auditors and  the audit
committee of registrant's board of  directors (or persons performing  equivalent
functions):

          a) All significant deficiencies in the design or operation of internal
     controls  which could adversely affect  the registrant's ability to record,
     process, summarize and report  financial data and  have identified for  the
     registrant's auditors any material weaknesses in internal controls; and

          b)  Any fraud,  whether or not  material, that  involves management or
     other employees who have  a significant role  in the registrant's  internal
     controls; and

     6.  The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                          /s/ KENNETH T. JOYCE
                                          --------------------------------------
                                          By: Kenneth T. Joyce
                                          Title: Chief Financial Officer

Date: March 27, 2003

                                       106

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>3
<FILENAME>w84305exv10w16.txt
<DESCRIPTION>BUSINESS TRANSFER AGREEMENT
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.16

                                                                [EXECUTION COPY]

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

                           BUSINESS TRANSFER AGREEMENT

                                 by and between

                            Amkor Technology Limited
                             (f/k/a C.I.L. Limited)

                            Anam Semiconductor, Inc.
                        (f/k/a Anam Industrial Co., Ltd.)

                                 Anam USA, Inc.

                             Amkor Technology, Inc.
                         (f/k/a Amkor Electronics, Inc.)

                          dated as of January 27, 2003

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

<PAGE>

                           BUSINESS TRANSFER AGREEMENT

THIS BUSINESS TRANSFER AGREEMENT (this "Agreement"), dated as of January 27,
2003 (the "Effective Date") is entered into by and between AMKOR TECHNOLOGY,
INC. ("Amkor") a Delaware corporation with a place of business at 1345
Enterprise Drive, West Chester, Pennsylvania 19380; AMKOR TECHNOLOGY LIMITED
("ATL"), a Cayman Islands corporation with a place of business at P.O. Box 10513
APO Georgetown, Grand Cayman, Cayman Islands; ANAM SEMICONDUCTOR, INC. ("ASI") a
Korean corporation with a place of business at 891-10, Daechi-dong, Kangnam-gu,
Seoul 133-523, Korea; and ANAM USA, INC. ("Anam USA") a Pennsylvania corporation
with a place of business at 1345 Enterprise Drive, West Chester, Pennsylvania
19380 (each a "Party", collectively the "Parties").

                              W I T N E S S E T H:

         WHEREAS, ASI is engaged in the business of providing Foundry Services,
and owns and operates a semiconductor foundry in Korea;

         WHEREAS, Amkor operates a foundry services business unit whereby it
supplies Products to Customers utilizing Foundry Services provided by ASI (the
"Foundry Services Business");

         WHEREAS, the Parties entered into a certain Foundry Agreement dated
January 1, 1998, as amended, (the "Foundry Agreement") pursuant to which ASI
manufactures semiconductor wafers and otherwise performs Foundry Services for
Amkor;

         WHEREAS, ASI wishes to have Purchaser (as defined under Article 2
hereof) acquire of the Foundry Services Business from Amkor; and

         WHEREAS, Amkor wishes to transfer the Foundry Services Business to such
Purchaser.

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained herein, the Parties hereby agree to transfer
the Foundry Services Business in accordance with the terms and conditions
herein.

                             ARTICLE 1. DEFINITIONS

         SECTION 1.1. DEFINITIONS. Any capitalized terms used, but not defined
elsewhere in this Agreement shall have the meanings ascribed to them in this
Section 1.1.

         (a)      "Affiliate" of a Party means an entity that is controlled by
such Party or by an entity controlling such Party. For the purposes of the
foregoing, "control" means ownership, directly or indirectly, of at least 50% of
the voting stock of the controlled entity.

         (b)      "Assets" means those assets set forth in Schedule 1.10 which
are to be transferred to Purchaser (as defined under Article 2 hereof) in
connection with the transfer of the Foundry Services Business.

                                       1
<PAGE>

         (c)      "Assumed Liabilities" means those liabilities to be assumed by
Purchaser in connection with the transfer of the Foundry Services Business,
which are set forth more specifically in Schedule 1.10.

         (d)      "Books and Records" shall have the meaning set forth in
Section 3.1(c).

         (e)      "Change of Control" means, with respect to a Party: (A) the
direct or indirect acquisition of either (i) the majority of the voting stock of
such Party or (ii) all or substantially all of the assets of such Party, by
another entity in a single transaction or series of related transactions; or (B)
the merger of such Party with, or into, another entity. The reincorporation of a
Party shall not be considered a Change of Control.

         (f)      "Closing Date" shall be February 28, 2003, or such other date
as the Parties mutually agree upon.

         (g)      "Customer" means a third party with whom Amkor or ATL enters
into a contractual arrangement to provide Foundry Services.

         (h)      "Foundry Fees" shall have the meaning set forth in the Foundry
Agreement.

         (i)      "Foundry Services" means the manufacturing and testing of
Products, including semiconductor wafers and die, and related services provided
to a Customer.

         (j)      "Leases" means the real property leases set forth on Schedule
1.10.

         (k)      "Products" means semiconductor wafers, die, and other
materials or deliverables provided by Amkor and its affiliate for Customers.

         (l)      "Purchase Price" shall have the meaning set forth in Section
2.1.

         (m)      "Purchaser" shall have the meaning set forth in Section 2.1.

         (n)      "Taxes" means all taxes, customs duty, charges, fees, levies
or other assessments, including income, gross receipts, excise, property, stamp,
registrations, sales, license, payroll, consumption, value added, withholding
and franchise taxes and any secondary tax liability, imposed by Korea, the
United States or any other country or any local government or taxing authority
or political subdivision or agency thereof or therein, and such term shall
include any interest, penalties or additions attributable to such taxes,
charges, fees, levies or other assessments.

                       ARTICLE 2. PURCHASE PRICE & PAYMENT

         SECTION 2.1. FORMATION OF A U.S. SUBSIDIARY OF ASI AS PURCHASER. ASI
shall establish in the United States a new subsidiary which will serve as the
purchaser of the Foundry Service Business ("Purchaser") within three (3) weeks
from the date following the Effective date.

                                       2
<PAGE>

         SECTION 2.2. PURCHASE PRICE. In consideration of Amkor's transfer of
the Foundry Services Business, Purchaser shall pay Amkor a purchase price in the
amount of US$62,000,000 (the "Purchase Price").

         SECTION 2.3. PAYMENT. On the Closing Date, Purchaser shall pay to Amkor
the Purchase Price.

         SECTION 2.4. FLOW OF FUNDS AMONG THE PARTIES.

         (a)      The Parties of this Agreement shall agree to the following
order of the flows of funds in cash or immediately available funds as of the
Closing Date:

                  (i)      Amkor shall make a payment in the amount of
                           US$62,000,000 to Anam USA as its payment of accounts
                           payable owed to Anam USA under the Foundry Agreement;

                  (ii)     Immediately upon receipt of the payment by Amkor in
                           the amount of US$62,000,000 as provided in (i) above,
                           Anam USA shall remit US$62,000,000 to ASI as its
                           payment of accounts payable owed to ASI under the
                           Foundry Agreement;

                  (iii)    Immediately upon receipt of the payment by Anam USA
                           in the amount of US$62,000,000 as provided in (ii)
                           above, ASI shall make capital injection into
                           Purchaser in the amount that is at least equal to the
                           Purchase Price; and

                  (iv)     Immediately upon receipt of the capital injection by
                           ASI in the amount that is at least equal to the
                           Purchase Price as provided in (iii) above, Purchaser
                           shall make the payment of the Purchase Price to Amkor
                           as provided under Section 2.3 hereof.

         (b)      The Parties agree that certain escrow arrangements are
advisable to make certain that the funds shall flow as set forth in (a) above,
and, in order to implement such escrow arrangements, the Parties shall negotiate
in good faith to provide for details of such escrow arrangements prior to the
Closing Date. The escrow arrangements shall require each of Amkor, Anam USA, ASI
and Purchaser (x) to establish a bank account with the escrow agent which is a
banking institution licensed to do business in the United States, (y) to give
such escrow agent a payment instruction as noted in Section 2.4. (a) above prior
to the Closing Date and (z) to authorize such escrow agent to make the flows of
funds as noted in Section 2.4 (a) above, but not otherwise in any event:
provided, however, that the fund flows as provided in Section 2.4 (a) (i) and
Section 2.4 (a) (ii) may be consolidated.

         (c)      The Parties understand and agree that the Closing Date shall
be a date on or after Amkor secures sufficient cash reserves from collection of
the outstanding receivables due from the Clients to Amkor. After the Closing
Date, Amkor shall remit to Anam USA any receivables collected from Customers.
Such payments shall only be made as the receivables are actually collected in
satisfaction of Amkor's outstanding payable to Anam USA.

                                       3
<PAGE>

         SECTION 2.5. APPROVALS. ASI shall be responsible for (i) initiating and
complying with all relevant legal procedures and (ii) obtaining the Korean
approvals (including but not limited to the approvals under the Foreign Exchange
Transaction Act), necessary to establish Purchaser and cause Purchaser pay the
Purchase Price to Amkor. In the event that for whatever reason ASI's fails to
obtain such Korean approvals, the Parties to this Agreement shall negotiate in
good faith an alternative structure to consummate the sale and purchase
transaction provided hereunder. Further, ASI shall be jointly and severally
liable (together with Purchaser) for the performance of the obligations of
Purchaser under this Agreement, including the obligation to make the payment of
the Purchase Price by Purchaser to Amkor.

                          ARTICLE 3. TRANSFER OF ASSETS

         SECTION 3.1. SALE AND PURCHASE. On the Closing Date, subject to the
terms and conditions contained in this Agreement, and in consideration of
Purchaser's payment of the Purchase Price and assumption of the Assumed
Liabilities, Amkor shall (or shall cause its Affiliate to) sell, convey,
transfer, assign and deliver to Purchaser, and Purchaser shall (or shall cause
its Affiliate to) purchase and acquire from Amkor (or shall cause its
Affiliate), all right, title and interest in and to the following assets of
Amkor used in the Business (the "Transferred Assets"):

                  (a) all personal property Assets set forth on Schedule 1.10;

                  (b) the real property Leases relating to the Foundry Services
Business as set forth on Schedule 1.10;

                  (c) all marketing and other rights under the Foundry
Agreement; and

                  (d) certain records relating solely and exclusively to the
Foundry Services Business, including customer lists, drawings, notebooks,
specifications, advertising and promotional materials, marketing materials, and
engineering materials (the "Books and Records").

         SECTION 3.2. ASSUMPTION OF LIABILITIES. From and after the Closing
Date, Purchaser shall assume, on the terms and subject to the conditions set
forth herein, the obligations and liabilities set forth in Schedule 1.10
("Assumed Liabilities").

         SECTION 3.3. NO WARRANTY. The Assets are sold to Purchaser strictly on
an "as-is" basis. Except as otherwise specifically set forth in this Agreement,
TO THE FULLEST EXTENT PERMITTED BY LAW, AMKOR HEREBY EXPRESSLY DISCLAIMS ALL
WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, REGARDING ANY OF THE ASSETS,
OR REGARDING THEIR MERCHANTABILITY OR THEIR FITNESS FOR ANY PARTICULAR PURPOSE.
Purchaser hereby acknowledges and confirms that it has had the opportunity to
inspect and has inspected the Assets and accepts them "as-is" and further will
not hold Amkor (or its Affiliates) liable for any malfunctioning, irreparable or
unusable state of the Assets.

         SECTION 3.4. Each Party shall use commercially reasonable efforts to
facilitate the transfer of the Transferred Assets contemplated hereby.

         SECTION 3.5. ALLOCATION OF THE PURCHASE PRICE. Amkor and Purchaser
covenant to use their respective best efforts to, on or prior to the Closing
Date, agree on the allocation of the Purchase Price

                                       4
<PAGE>

on Assets among the equipment, current assets, transferred intellectual
property, other assets and goodwill. Amkor and Purchaser shall (i) be bound by
any Allocation for purposes of determining any Taxes, (ii) prepare and file its
tax returns on a basis consistent with any Allocation, and (iii) take no
position inconsistent with any Allocation on any applicable tax return or in any
action before any governmental authority or otherwise. In the event that the
Allocation is disputed by any governmental authority, the party receiving notice
of the dispute shall promptly notify the other party hereto concerning
resolution of the dispute. Amkor and Purchaser agree to cooperate fully to
record and file any and all government filings to report information concerning
amount of consideration in the transaction and its allocation among the assets.

                        ARTICLE 4. TRANSFER OF EMPLOYEES

         SECTION 4.1. On or before the Closing Date, Purchaser shall hire those
employees of Amkor and/or its Affiliates which are set forth on Schedule 4.1.
Such employment shall be on terms substantially similar to the employees'
existing terms and conditions of employment. Amkor shall be responsible for
payment of the severance obligations associated with any termination of such
employees, as set forth in more detail in Schedule 4.1 hereto.

                         ARTICLE 5. TRANSITION SERVICES

         SECTION 5.1. Each Party shall use all commercially reasonable efforts
to cooperate and assist in the transition of existing Customers to Purchaser.
Such assistance and cooperation shall include transfer of the Customer billing
function to Purchaser.

         SECTION 5.2. ASI shall provide, or cause any if its Affiliates to
provide, reasonable access to documents, financial statements, etc. to the
extent necessary to support any required future Amkor SEC filings, financial
reporting requirements and similar obligations.

         SECTION 5.3. ASI shall use all commercially reasonable efforts to
provide assistance and cooperation as necessary to support Amkor's collection of
any outstanding amounts due from Customers, including, without limitation, those
amounts due in connection with disputed warranty and similar claims.

         SECTION 5.4. Within five (5) days following execution of this
Agreement, the Parties shall meet to discuss and develop an integration process
to complete the transfer of the Transferred Assets to Purchaser, and terminate
ASI's use of any IT databases and resources shared between AWFS, Amkor, and ASI
(as detailed in Schedule 5.4). Such transition process shall be completed within
a period not to exceed one hundred and twenty (120) days following the Closing
Date.

         SECTION 5.5. Each Party shall otherwise use commercially reasonable
efforts to do such other things and take such other actions as are necessary to
effect the transactions contemplated by this Agreement.

                   ARTICLE 6. TERMINATION OF FOUNDRY AGREEMENT

         SECTION 6.1. Subject to Section 6.2, effective as of the Closing Date,
the Foundry Agreement

                                       5
<PAGE>

shall terminate.

         SECTION 6.2. Notwithstanding anything to the contrary herein, the
following provisions of the Foundry Agreement shall not be affected by
termination of the Foundry Agreement, and such provisions shall survive
termination of the Foundry Agreement and continue in full force and effect as if
set forth in their entirety herein: Article 8 (Confidential Information);
Article 12 (Warranties); Article 13 (Indemnities).

         SECTION 6.3. This Agreement represents the full and final agreement and
settlement between the Parties with respect to all obligations under the Foundry
Agreement. Except with respect to those obligations specifically undertaken by
the Parties as set forth in this Agreement, each Party, on behalf of itself and
its Affiliates, hereby fully releases and discharges the other Parties and their
Affiliates from any and all obligations under the Foundry Agreement, and waive
any and all claims of any kind against the other Parties and their Affiliates
arising under the Foundry Agreement.

                            ARTICLE 7. PENDING CLAIMS

         SECTION 7.1. Notwithstanding anything to the contrary herein, Purchaser
shall assume and retain all responsibility and liability for any and all claims
of any type, arising out of or relating in any way to its provision of Foundry
Services to Amkor or its Affiliates under the Foundry Agreement prior to the
Closing Date of this Agreement, including, without limitation, the pending
Alcatel claim and pending litigation proceedings in Paris, France (Docket nos.
2002015641, 2002042245, 2002/10999, 2002024616).

                             ARTICLE 8. ARBITRATION

         SECTION 8.1. ARBITRATION OF DISPUTES.

                  (a) Any controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance or breach of
this Agreement, including any claim based on contract, tort or statute, shall be
settled, at the request of any Party, by arbitration conducted in Philadelphia,
Pennsylvania or such other location upon which the Parties may mutually agree,
before and in accordance with the then-existing Rules of Commercial Arbitration
of the American Arbitration Association ("AAA"), and judgment upon any award
rendered by the arbitrator may be entered by any court having jurisdiction
thereof.

                  (b) The Parties hereby consent to the jurisdiction of an
arbitration panel and of the courts located in, and venue in, Philadelphia,
Pennsylvania with respect to any dispute arising under this Agreement.

                  (c) Any controversy concerning whether a dispute is an
arbitral dispute hereunder shall be determined by the one or more arbitrators
selected in accordance with Section 8.3.

                  (d) The Parties intend that this agreement to arbitrate be
valid, specifically enforceable and irrevocable.

                                       6
<PAGE>

         SECTION 8.2. INITIATION OF ARBITRATION. A Party may initiate
arbitration hereunder by filing a written demand for arbitration with each other
Party to the dispute in accordance with Section 10.10 and with the AAA.
Arbitration hereunder shall be conducted on a timely, expedited basis.

         SECTION 8.3. SELECTION OF ARBITRATOR. Any arbitration shall be held
before a single arbitrator, who shall be selected in accordance with the
procedures of the AAA, and shall be a member of the Large Complex Case Panel
with significant intellectual property (patent and copyright) law and
semiconductor manufacturing experience. If the Parties are unable to agree on a
single arbitrator, then Amkor and ASI shall each select an arbitrator and such
arbitrators shall select a third arbitrator. Such arbitration shall then be held
before such three arbitrators.

         SECTION 8.4. AWARDS. The arbitrator(s) may, in its discretion, award
to the prevailing Party in any arbitration proceeding commenced hereunder, and
the court shall include in its judgment for the prevailing Party in any claim
arising hereunder, the prevailing Party's costs and expenses (including expert
witness expenses and reasonable attorneys' fees) of investigating, preparing and
presenting such arbitration claim or cause of action.

                                ARTICLE 9. TAXES

         SECTION 9.1. TAX WITHHOLDING. If Purchaser is required by the relevant
laws to deduct or withhold any sales and/or other Taxes payable with respect to
the relevant part of the Purchase Price, and other Taxes in connection with the
purchase or perfection of transfer of the Foundry Services Business or any of
the Assets, Purchaser (i) may deduct or withhold, and shall pay such Taxes to
the relevant tax authorities and (ii) shall provide Amkor with the receipts
evidencing payment of such relevant Taxes within five (5) days from such
payment.

         SECTION 9.2. GOVERNMENTAL APPROVAL. In execution and delivery of this
Agreement and in performance of obligations hereunder, both Parties agree where
material approvals from governmental entities (if any) are deemed appropriate or
necessary by any Party to this Agreement, these items shall have been timely
obtained.

                               ARTICLE 10. GENERAL

         SECTION 10.1. CONSTRUCTION. All references in this Agreement to
"Articles," "Sections", "Schedules" and "Exhibits" refer to the articles,
sections, schedules and exhibits of this Agreement. The words "hereof," "herein"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any subdivision contained in this Agreement. The words
"include" and "including" when used herein are not exclusive and mean "include,
without limitation" and "including, without limitation," respectively.

         SECTION 10.2. INDEPENDENT CONTRACTORS. The Parties hereto are
independent contractors. Nothing contained herein or done pursuant to this
Agreement shall constitute any Party the agent of any other Party for any
purpose or in any sense whatsoever, or constitute the Parties as partners or
joint venturers. Neither party shall have any authority to bind the other party
to any contract with any third Party, except as specifically set forth herein.

                                       7
<PAGE>

         SECTION 10.3. ASSIGNABILITY. No Party shall assign or delegate this
Agreement, or any of its rights or duties hereunder, directly, indirectly, by
operation of law, or otherwise, or in connection with a Change of Control,
except to an Affiliate, and any such purported assignment or delegation shall be
void, except with the express written consent of the other Parties, which
consent shall not be unreasonably withheld. Without limiting the foregoing, any
permitted assigns or successors of the Parties shall be bound by all terms and
conditions of this Agreement and this Agreement shall inure to the benefit of
such permitted successors or assigns.

         SECTION 10.4. AMENDMENT. No alteration, amendment, waiver, cancellation
or any other change in any term or condition of this Agreement shall be valid or
binding on any Party unless mutually assented to in writing by all Parties.

         SECTION 10.5. FORCE MAJEURE. No Party shall be liable for delay in
performance or failure to perform, in whole or in part, to the extent due to
labor dispute, strike, war or act of war, insurrection, riot, civil unrest, act
of public enemy, fire, flood, or other acts of God, or the acts of any
governmental authority, or other causes beyond the control of such Party. The
Party experiencing such cause or delay shall immediately notify the other
Parties of the circumstances which may prevent or significantly delay its
performance hereunder, and shall use its best efforts to alleviate the effects
of such cause or delay.

         SECTION 10.6. COMPLIANCE WITH LAWS. Each Party shall comply with all
applicable United States and Korean laws, rules, statutes and regulations in
performing its obligations hereunder.

         SECTION 10.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO THAT STATE'S LAW
REGARDING CHOICE OF LAWS. THE UNITED NATIONS CONVENTION ON THE INTERNATIONAL
SALE OF GOODS SHALL NOT APPLY TO THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED
HEREBY.

         SECTION 10.8. NO WAIVER . The failure of a Party to enforce at any time
any of the provisions of this Agreement, or the failure to require at any time
performance by any other Party of any of the provisions of this Agreement, shall
in no way be construed to be a present or future waiver of such provisions, nor
in any way affect the validity thereof or a Party's right to enforce each and
every such provision thereafter. The express waiver by a Party of any provision,
condition or requirement of this Agreement shall not constitute a waiver of any
future obligation to comply with such provision, condition or requirement.

         SECTION 10.9. SEVERABILITY. If, for any reason, a court of competent
jurisdiction finds any provision of this Agreement, or portion thereof, to be
invalid or unenforceable, such provision of the Agreement will be enforced to
the maximum extent permissible so as to effect the intent of the Parties, and
the remainder of this Agreement will continue in full force and effect. The
Parties agree to negotiate in good faith an enforceable substitute provision for
any invalid or unenforceable provision that most nearly achieves the intent and
economic effect of such provision.

                                       8
<PAGE>

         SECTION 10.10. NOTICES. All notices, requests, demands, waivers, and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given: (i) when delivered by hand or confirmed
facsimile transmission; (ii) one day after delivery by receipted overnight
delivery; or (iii) four days after being mailed by certified or registered mail,
return receipt requested, with postage prepaid to the appropriate address set
forth at the beginning of this Agreement or to such other person or address as
any Party shall furnish to the other Parties in writing pursuant to the above.

         SECTION 10.11. TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

         SECTION 10.12. COUNTERPARTS. This Agreement may be executed in
counterparts which, taken together, shall constitute one and the same document.

         SECTION 10.13. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective heirs,
successors and permitted assigns.

         SECTION 10.14. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement
shall confer any rights upon any person or entity other than the Parties hereto
and their respective heirs, successors and permitted assigns.

         SECTION 10.15. LANGUAGE. This Agreement is entered into in the English
language. In the event of any dispute concerning the construction or meaning of
this Agreement, the text of the Agreement as written in the English language
shall prevail over any translation of this Agreement that may have been or will
be made.

         SECTION 10.16.APPROVALS. Each Party represents and warrants that it has
obtained all necessary board and/or shareholder approvals and taken all other
corporate action required to enter into this Agreement and consummate the
transaction contemplated hereby.

         SECTION 10.17. ENTIRE AGREEMENT. The terms and conditions herein
contained constitute the entire agreement between the Parties with respect to
the subject matter hereof and supersede all previous and contemporaneous
agreements and understandings, whether oral or written, between the Parties with
respect to the subject matter hereof.

                                       9
<PAGE>

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized officers or representatives to be effective as
of the date first above written.

AMKOR TECHNOLOGY, INC.                  AMKOR TECHNOLOGY LIMITED

By:    /s/ John Boruch                  By:    /s/ Kenneth Joyce
       -------------------------              --------------------------

Name:  John Boruch                      Name:  Kenneth Joyce

Title: President                        Title: Director and Chairman

ANAM SEMICONDUCTOR, INC.                ANAM USA, INC.

By:    /s/ Kwang Jo An                  By:    /s/ Hong Taek Chung
       -------------------------              --------------------------

Name:  Kwang Jo An                      Name:  Hong Taek Chung

Title: Senior Vice President            Title: President

                                       10
<PAGE>

                                  SCHEDULE 1.10
                            PERSONAL PROPERTY ASSETS

                                  SEE ATTACHED

                                       11
<PAGE>
<Table>
<Caption>
                    ORACLE
LOCATION            ASSET #                  DESCRIPTION
<S>                 <C>                 <C>
BLDG & LHILHI

Boise, ID           L12154              EXPANSION OF COMPUTER ROOM
Boise, ID           L12153              AIR CONDITIONING SYSTEM FOR
Boise, ID           L12148              EXPANSION OF COMPUTER ROOM
Boise, ID           L12147              NEW FLOOR COVERING SOUNDPR
Boise, ID           L12152              ADD OUTLETS AND DROPS AND 2
Boise, ID           L12149              PIPEWORK AND CIRCUITRY
Boise, ID           L12151              WIRING WORK ORDER 0101
Boise, ID           L12150              AIR CONDITIONING FOR LAN ROO
Boise, ID           L12146              REMODELING
Boise, ID           L12144              WIRING WORK ORDER 0101
Boise, ID           L12142              COFFEE STATION PARTIAL PY
Boise, ID           L12139              REMODELING
Boise, ID           L12138              COFFEE STATION FINAL PYMT
Santa Clara, CA     L12156              INSTALL CABLING
Santa Clara, CA     L12155              28 WORKSTATION OUTLETS
Santa Clara, CA     L12145              ELECTRICAL WORK
Santa Clara, CA     L12143              INSTALL CABLING
Santa Clara, CA     L12141              ADD'L WORKSTATION OUTLETS
Santa Clara, CA     L12140              ADD'L WORK SANTA CLARA

HIP & COM.OP AND COM

Boise, ID           L12335              FORMER PIP SUPPLY CHAIN PR
Boise, ID           L12334              FORMER PIP SUPPLY CHAIN P
Boise, ID           L12333              NOV98 TRF FROM PIP TO DP F
Boise, ID           L12332              NOV98 TRF FROM PIP TO DP FA
Boise, ID           L12330              SILICON EMSEMBLE DSM AND SO
Boise, ID           L12315              NETAPP F740 FILER SYSTEM
Boise, ID           L12322              NOV98 TRF FROM PIP TO DP F
Boise, ID           L12313              FORMER PP SUPPLY CHAIN PR
Boise, ID           L12311              FORMER PP SUPPLY CHAIN P
Boise, ID           L12300              SUN WORKSTATION INCLUDING M
Boise, ID           L12314              300MHZ ULTRA 2
Boise, ID           L12305              TWO 250MHZ PROCESSORS AND C
Boise, ID           L12277              ORACLE 8 ENTERPRISE V.8F S
Boise, ID           L12297              CRI INTERNET PROJECT AND
Boise, ID           L12255              ULTRA10 440
Boise, ID           L12288              NOV98 TRF FROM PIP TO DP F
Boise, ID           L12234              ASM 3500 SOLARS
Boise, ID           L12336              FORMER PIP LIBRARY
Boise, ID           L12329              DRACULA/VIRTUOSO SOFTWARE
Boise, ID           L12328              TRF FROM PIP LIBRARY A
Boise, ID           L12326              VARIOUS COMPUTER EQUIP
Boise, ID           L12318              NET APP F740 FILER SYSTEM
Boise, ID           L12320              VARIOUS HARDWARD AND SOFTWA
Boise, ID           L12310              R4861 STATION AND PROBE AND
Boise, ID           L12316              TRF FROM PIP LIBRARY A
Boise, ID           L12308              THERMAL CENTRAL CONTROL SYS
Boise, ID           L12307              UPDATE AA18LP LIBRARIES TO
Boise, ID           L12306              SEMICONDUCTOR PARAMETER ANA
Boise, ID           L12304              STORAGE HDs
Boise, ID           L12301              INFINIUM OSCILLOSCOPE
Boise, ID           L12299              ODYSSEY CONSULTING LIBRARY
Boise, ID           L12298              ULTRAMD 4450 4MB CACHE
Boise, ID           L12292              3 SUN ULTRA 10 MODEL 40 WOR
Boise, ID           L12287              VIRTUSO SCHEMATIC COMPOSER
Boise, ID           L12294              HP PULSE GENERATOR TEK DP
Boise, ID           L12281              ULTRA 10 MODEL 440 WORKSTAT
Boise, ID           L12280              4 THINKPAD 570 PII MODEL 26
Boise, ID           L12285              STORAGE HDs AND CABLE
</Table>


                                       19
<PAGE>
<Table>
<Caption>
                      ORACLE
LOCATION              ASSET #                         DESCRIPTION
----------------      -------               ------------------------------
BLDG & LHI, I HI
--------------------------------------------------------------------------
<S>                 <C>                     <C>
Boise, ID             L12270                 DEVELOP A DESIGN AVANT VIE
--------------------------------------------------------------------------
Boise, ID             L12288                 4 COMPAQ DESKPROS
--------------------------------------------------------------------------
Boise, ID             L12265                 5 COMPAQ DESKPROS
--------------------------------------------------------------------------
Boise, ID             L12260                 TIME INTERVAL MEASUREMENTS
--------------------------------------------------------------------------
Boise, ID             L12264                 CISCO 3620
--------------------------------------------------------------------------
Boise, ID             L12258                 NETAPP HDW SUPPORT   F740
--------------------------------------------------------------------------
Boise, ID             L12242                 MZ 15EC AND ESD SIMULATOR
--------------------------------------------------------------------------
Boise, ID             179657                 ThinkPad
--------------------------------------------------------------------------
Boise, ID             L12236                 MODEL 228A VOLTAGE CURRENT
--------------------------------------------------------------------------
Boise, ID             L12228                 BD 150GB BMM MAMMOTH2 TAP
--------------------------------------------------------------------------
Boise, ID             L12263                 3 COMPAQ WORKSTATIONS
--------------------------------------------------------------------------
Boise, ID             L12232                 COMPAQ PRO RELIANT
--------------------------------------------------------------------------
Boise, ID             L12226                 SYNTH SIGNAL GENERATOR
--------------------------------------------------------------------------
Boise, ID             L12225                 HP LT 8500N
--------------------------------------------------------------------------
Boise, ID             L12222                 BACKUP SOFTWARE
--------------------------------------------------------------------------
Boise, ID             L12218                 2 COMPAQ DISKPRO
--------------------------------------------------------------------------
Boise, ID             L12212                 1 JET PRINTER AND 1 BW PRI
--------------------------------------------------------------------------
Boise, ID             L12235                 PROJECTOR
--------------------------------------------------------------------------
Boise, ID             L12201                 BACKUP SOFTWARE
--------------------------------------------------------------------------
Boise, ID             L12200                 IBM THINKPAD
--------------------------------------------------------------------------
Boise, ID             L12279                 VARIOUS COMPUTER EQUIPMENT
--------------------------------------------------------------------------
Boise, ID             L12198                 DEVELOP A DESIGN AVANT VI
--------------------------------------------------------------------------
Boise, ID             L12227                 18P TAPE BACKUP AUTOLOADER
--------------------------------------------------------------------------
Boise, ID             L12273                 256MB 1 BGB HDD PROLIANT
--------------------------------------------------------------------------
Boise, ID             L12215                 COMPAQ HARD DRIVES
--------------------------------------------------------------------------
Boise, ID             L12213                 TELECOM NETWORK ITEMS
--------------------------------------------------------------------------
Boise, ID             L12266                 3 PERSONAL COMPUTERS AND 1
--------------------------------------------------------------------------
Boise, ID             L12207                 2 17IN MONITORS AND 2 COM
--------------------------------------------------------------------------
Boise, ID             L12204                 VARIOUS IBM HARDWARE DRIVE
--------------------------------------------------------------------------
Boise, ID             L12257                 258MB MEMORY AND 4.2GB INT
--------------------------------------------------------------------------
Boise, ID             L12251                 HP PRINTER
--------------------------------------------------------------------------
Boise, ID             L12250                 FOUR PENTIUM II 266MHZ
--------------------------------------------------------------------------
Boise, ID             L12193                 TRANSPORT NX 15.0
--------------------------------------------------------------------------
Boise, ID             L12237                 THINKPAD LAPTOP
--------------------------------------------------------------------------
Boise, ID             L12186                 MICRON LAPTOP 2.4GB
--------------------------------------------------------------------------
Boise, ID             L12233                 VARIOUS COMPUTER EQUIPMENT
--------------------------------------------------------------------------
Boise, ID             L12183                 ADDITIONAL MEMORY
--------------------------------------------------------------------------
Boise, ID             L12169                 VP VEE 5.0 FOR WINDOWS
--------------------------------------------------------------------------
Boise, ID             L12208                 THINKPAD 765L
--------------------------------------------------------------------------
Boise, ID             L12192                 IBP POWER PC750 MICROPROCES
--------------------------------------------------------------------------
Boise, ID             L12189                 12GB DAT DRIVE
--------------------------------------------------------------------------
Boise, ID             L12185                 ARCK SERVE ENTERPRISE AND B
--------------------------------------------------------------------------
Boise, ID             L12175                 MONITOR AND CDROM AND KEYB
--------------------------------------------------------------------------
Boise, ID             L12173                 COMPUTER EQUIPMENT
--------------------------------------------------------------------------
Boise, ID             L12171                 HEWLETT PACKARD LASERJET PR
--------------------------------------------------------------------------
Boise, ID             L12167                 USE TAX ON 1997 PURCHASE
--------------------------------------------------------------------------
Boise, ID             L12158                 S AND H FOR INVOICE NO 3957
--------------------------------------------------------------------------
Boise, ID             L12161                 AD1200 129L 1
--------------------------------------------------------------------------
Boise, ID             L12162                 15 TATUNG DIGITAL MONITOR
--------------------------------------------------------------------------
Boise, ID             L12165                 HTDM RATE CHANGE/FACILITY C
--------------------------------------------------------------------------
Boise, ID             L12176                 AD 1200 129L1
--------------------------------------------------------------------------
Boise, ID             L12199                 2 DESKPRO 2000 AND ACCESSOR
--------------------------------------------------------------------------
Boise, ID             L12206                 4 MULTISCAN 17E2T AND ACCES
--------------------------------------------------------------------------
Boise, ID             L12223                 HP PRINTER
--------------------------------------------------------------------------
Boise, ID             L12230                 9.10GB SCSI ULTRAWIDE PLUG
--------------------------------------------------------------------------
Boise, ID             L12240                 512 KMB KIT FOR COMPAQ
--------------------------------------------------------------------------
Boise, ID             L12269                 4 DESKPRO 6000 AND ACCESSO
--------------------------------------------------------------------------
Boise, ID             L12271                 SWITCH COMPONENT
--------------------------------------------------------------------------
Boise, ID             L12272                 SWITCH COMPONENT
--------------------------------------------------------------------------
Boise, ID             L12275                 DESKPRO 6000 UPS MODEL 3000
--------------------------------------------------------------------------
</Table>

                                       20
<PAGE>
<Table>
<Caption>
                           ORACLE
LOCATION                   ASSET #                  DESCRIPTION
--------------------------------------------------------------------------------
BLDG & LIII.LHI
--------------------------------------------------------------------------------
<S>                     <C>          <C>
Boise, ID                   L12283       SURE STORE DLT AND ACCESSOR
--------------------------------------------------------------------------------
Boise, ID                   L12284       ARMADA PENTIUM AND DESKPRO
--------------------------------------------------------------------------------
Boise, ID                   L12289       COPIER
--------------------------------------------------------------------------------
Boise, ID                   L12295       COMPAQ PROLIANT 6000 WITH 1
--------------------------------------------------------------------------------
Boise, ID                   L12296       SWITCH COMPONENT
--------------------------------------------------------------------------------
Santa Clara, CA             L12326       VARIOUS COMPUTER EQUIPMENT
--------------------------------------------------------------------------------
Santa Clara, CA             L12327       PRODUCTS SHOWN IN QUOTE 5 3
--------------------------------------------------------------------------------
Santa Clara, CA             L12319       VARIOUS HARDWARE AND SOFTWARE
--------------------------------------------------------------------------------
Santa Clara, CA             L12302       ULTRA60 MODL2450 DUAL 450
--------------------------------------------------------------------------------
Santa Clara, CA             L12309       COMPUTER EQUIPMENT
--------------------------------------------------------------------------------
Santa Clara, CA             L12303       CAPITALIZED SALARIES SCP
--------------------------------------------------------------------------------
Santa Clara, CA             L12278       IBM THINKPAD AND ACCESSORIES
--------------------------------------------------------------------------------
Santa Clara, CA             L12256       8 9.1GB INTERNAL DISKS 72
--------------------------------------------------------------------------------
Santa Clara, CA             L12290       2 COMPAQ DESKPROS AND 1 ROU
--------------------------------------------------------------------------------
Santa Clara, CA             L12286       LAN SEGMENTATION
--------------------------------------------------------------------------------
Santa Clara, CA             L12274       4 PENTIUM DESKPRO PCS
--------------------------------------------------------------------------------
Santa Clara, CA             L12221       IBM THINKPAD AND ACCESSORIES
--------------------------------------------------------------------------------
Santa Clara, CA             L12261       NOV96 TRF FROM PIP TO DP F
--------------------------------------------------------------------------------
Santa Clara, CA             L12259       1 MX3000 MATRIX UPS AND 4 S
--------------------------------------------------------------------------------
Santa Clara, CA             L12248       MEMORY UPGRADES
--------------------------------------------------------------------------------
Santa Clara, CA             L12191       3 9.1GB INTERNAL DISK DRI
--------------------------------------------------------------------------------
Santa Clara, CA             L12239       COMPUTER EQUIPMENT
--------------------------------------------------------------------------------
Santa Clara, CA             L12238       DESKSIDE AUTORAID ARRAY MOD
--------------------------------------------------------------------------------
Santa Clara, CA             L12182       DC HARDWARE DATAMATRIX VERI
--------------------------------------------------------------------------------
Santa Clara, CA             L12179       THT PRINTER AND ACCESS
--------------------------------------------------------------------------------
Santa Clara, CA             L12219       IBM THINKPAD P166
--------------------------------------------------------------------------------
Santa Clara, CA             L12220       IBM THINKPAD P166
--------------------------------------------------------------------------------
Santa Clara, CA             L12214       16P SURESTORE DAT24X6E
--------------------------------------------------------------------------------
Santa Clara, CA             L12211       3 CPU DESKPRO
--------------------------------------------------------------------------------
Santa Clara, CA             L12202       NOVELL NETWARE V4.11 25
--------------------------------------------------------------------------------
Santa Clara, CA             L12197       11 ETHERNETS
--------------------------------------------------------------------------------
Santa Clara, CA             L12196       IBM THINKPAD 600
--------------------------------------------------------------------------------
Santa Clara, CA             L12194       IBM THINKPAD P166
--------------------------------------------------------------------------------
Santa Clara, CA             L12187       SUPERSTACK SWITCH AND LAN S
--------------------------------------------------------------------------------
Santa Clara, CA             L12166       9.1GB INTERNAL DISK 7200 FO
--------------------------------------------------------------------------------
Santa Clara, CA             L12181       QMS ACCESS PROJECT TRF F
--------------------------------------------------------------------------------
Santa Clara, CA             L12177       SUPERSTACK DESKTOP SWITCH
--------------------------------------------------------------------------------
Santa Clara, CA             L12164       SWI PROJ 98 SOFTWARE
--------------------------------------------------------------------------------
Santa Clara, CA             L12160       USE TAX ON INVOICE 251794 0
--------------------------------------------------------------------------------
Santa Clara, CA             L12157       S&H FOR EIS INSTALLATION
--------------------------------------------------------------------------------
Santa Clara, CA             L12159       OVERHEAD PROJECTOR TABLE
--------------------------------------------------------------------------------
Santa Clara, CA             L12163       NEC MONITOR
--------------------------------------------------------------------------------
Santa Clara, CA             L12166       NEC MONITOR AND ACCESSORIES
--------------------------------------------------------------------------------
Santa Clara, CA             L12170       HP LASERJET PRINTER
--------------------------------------------------------------------------------
Santa Clara, CA             L12172       IBM SELECTADOCK II NEC MONI
--------------------------------------------------------------------------------
Santa Clara, CA             L12174       2 NEC MONITORS AND ACCESSOR
--------------------------------------------------------------------------------
Santa Clara, CA             L12178       HP COLOR PRINTER AND ACCESS
--------------------------------------------------------------------------------
Santa Clara, CA             L12180       HP LASERJET PRINTER AND ACC
--------------------------------------------------------------------------------
Santa Clara, CA             L12184       3 NEC MONITORS
--------------------------------------------------------------------------------
Santa Clara, CA             L12186       2 PRINTERS
--------------------------------------------------------------------------------
Santa Clara, CA             L12190       INSTALLATION LABOR AND MATE
--------------------------------------------------------------------------------
Santa Clara, CA             L12195       HP LASERJET PRINTER
--------------------------------------------------------------------------------
Santa Clara, CA             L12203       IBM CUP TPAD
--------------------------------------------------------------------------------
Santa Clara, CA             L12205       HARDDRIVE AND CD ROM UPGRA
--------------------------------------------------------------------------------
Santa Clara, CA             L12209       IBM CPU TPAD
--------------------------------------------------------------------------------
Santa Clara, CA             L12210       PROJECTOR AND SOFTBOARD AND
--------------------------------------------------------------------------------
Santa Clara, CA             L12216       ETHERNET AND HSS 3 PORT
--------------------------------------------------------------------------------
Santa Clara, CA             L12217       FULL SIZE SOFT BOARD FOR WI
--------------------------------------------------------------------------------
Santa Clara, CA             L12224       2 COMPAQ DESKPRO AND ACCESS
--------------------------------------------------------------------------------
Santa Clara, CA             L12229       IBM THINKPAD AND ACCESSORIES
--------------------------------------------------------------------------------
</Table>

                                       21
<PAGE>
<Table>
<Caption>
                           ORACLE
LOCATION                   ASSET#             DESCRIPTION
-----------------------------------------------------------------------------
BLDG & LHI, LHI
-----------------------------------------------------------------------------
<S>                        <C>                <C>
Santa Clara, CA            L12231             IBM THINKPAD AND ACCESSORIE
-----------------------------------------------------------------------------
Santa Clara, CA            L12241             HP COLOR LASERJET PRINTER A
-----------------------------------------------------------------------------
Santa Clara, CA            L12243             CPU DESKPRO AND ACCESSORIES
-----------------------------------------------------------------------------
Santa Clara, CA            L12244             IBM THINKPAD AND ACCESSORIE
-----------------------------------------------------------------------------
Santa Clara, CA            L12245             IBM THINKPAD AND ACCESSORIE
-----------------------------------------------------------------------------
Santa Clara, CA            L12246             IBM THINKPAD AND ACCESSORIE
-----------------------------------------------------------------------------
Santa Clara, CA            L12247             IBM THINKPAD AND ACCESSORIE
-----------------------------------------------------------------------------
Santa Clara, CA            L12249             IBM THINKPAD AND ACCESSORIE
-----------------------------------------------------------------------------
Santa Clara, CA            L12252             IBM THINKPAD AND ACCESSORIE
-----------------------------------------------------------------------------
Santa Clara, CA            L12253             3 COMPAQ DESKPROS AND MONITO
-----------------------------------------------------------------------------
Santa Clara, CA            L12254             IBM CPU TPAD
-----------------------------------------------------------------------------
Santa Clara, CA            L12262             2 IBM THINKPADS AND ACCESSO
-----------------------------------------------------------------------------
Santa Clara, CA            L12276             SWI NETBUILDER2 EXBLT SYS
-----------------------------------------------------------------------------
Santa Clara, CA            L12282             FIREWALL AND GOLD SERVICE
-----------------------------------------------------------------------------
Santa Clara, CA            L12291             1GB MEMORY FOR E3000
-----------------------------------------------------------------------------
Santa Clara, CA            L12293             10 NEC MONITORS AND 3 IBM T
-----------------------------------------------------------------------------
Santa Clara, CA            L12312             10 CPU THINKPADS
-----------------------------------------------------------------------------
Santa Clara, CA            L12317             4 SUN ULTRA AND 1 ULTRA 30
-----------------------------------------------------------------------------
Santa Clara, CA            L12321             1 GB MEMORY FOR E3000 AND SS
-----------------------------------------------------------------------------
Santa Clara, CA            L12323             ENTERPRISE 3000 ENCLOSURE A
-----------------------------------------------------------------------------

-----------------------------------------------------------------------------
FURN & FIX,OFF EQUIP
-----------------------------------------------------------------------------
Boise, ID                  L12404             10 CUBICLES
-----------------------------------------------------------------------------
Boise, ID                  L12403             CUBICLE FURNITURE
-----------------------------------------------------------------------------
Boise, ID                  L12399             CUBICLES DELIVERED AND INST
-----------------------------------------------------------------------------
Boise, ID                  L12402             HERMAN MILLER FURNITURE
-----------------------------------------------------------------------------
Boise, ID                  L12398             VARIOUS FURNITURE PIECES
-----------------------------------------------------------------------------
Boise, ID                  L12401             OFFICE FURNITURE 50PCT DEPO
-----------------------------------------------------------------------------
Boise, ID                  L12395             3 OIL PAINTINGS
-----------------------------------------------------------------------------
Boise, ID                  L12391             EIGHT OFFICES OF FURNITURE
-----------------------------------------------------------------------------
Boise, ID                  L12389             HERMAN MILLER FURNITURE
-----------------------------------------------------------------------------
Boise, ID                  L12384             1 CONFERENCE TOP AND 11 CON
-----------------------------------------------------------------------------
Boise, ID                  L12377             5 CHAIRS
-----------------------------------------------------------------------------
Boise, ID                  L12381             CONFERENCE TOP
-----------------------------------------------------------------------------
Boise, ID                  L12380             SOFA AND 2 RECLINERS AND 11
-----------------------------------------------------------------------------
Boise, ID                  L12374             FURN. FOR C. MAROUN DESK
-----------------------------------------------------------------------------
Boise, ID                  L12372             2 CHAIRS AERON
-----------------------------------------------------------------------------
Boise, ID                  L12375             4 LEATHER CHAIRS
-----------------------------------------------------------------------------
Boise, ID                  L12371             CONFERENCE TABLE AND 6 CHAI
-----------------------------------------------------------------------------
Boise, ID                  L12370             8 SIDE CHAIRS FOXTROT EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12369             BOOKCASE AND LATERAL FILE
-----------------------------------------------------------------------------
Boise, ID                  L12363             WORKBENCH
-----------------------------------------------------------------------------
Boise, ID                  L12365             2 EXECUTIVE MILESTONE CHAIR
-----------------------------------------------------------------------------
Boise, ID                  L12364             CREDENZA AND BRIDGE AND LAT
-----------------------------------------------------------------------------
Boise, ID                  L12366             HERMAN MILLER BRAND FURNITU
-----------------------------------------------------------------------------
Boise, ID                  L12362             2 MID BACK WAYFARE HUNTER
-----------------------------------------------------------------------------
Boise, ID                  L12361             LEXEC CHAIR AND CREDENZA AN
-----------------------------------------------------------------------------
Boise, ID                  L12343             2 DRAWER LATERAL FILE MA
-----------------------------------------------------------------------------
Boise, ID                  L12360             PEDESTAL
-----------------------------------------------------------------------------
Boise, ID                  L12359             FOXTROT MAHOGANY CHAIR
-----------------------------------------------------------------------------
Boise, ID                  L12358             EXEC CHAIR CRESCENDO SPRUCE
-----------------------------------------------------------------------------
Boise, ID                  L12357             1 EXEC CHAIR AMBIANCE CONCO
-----------------------------------------------------------------------------
Boise, ID                  L12356             7 LEATHER CHAIRS AND 1 CABI
-----------------------------------------------------------------------------
Boise, ID                  L12350             2 SIDE CHAIR FOXTROT CHERRY
-----------------------------------------------------------------------------
Boise, ID                  L12351             2 SIDE CHAIR FOXTROT EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12352             2 SIDE CHAIR FOXTROT EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12353             2 SIDE CHAIR FOXTROT EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12354             2 SIDE CHAIR FOXTROT EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12355             2 FOXTROT EBONY FRAME CHAIR
-----------------------------------------------------------------------------
Boise, ID                  L12348             VENEER TABLE TOP AND BASE
-----------------------------------------------------------------------------

</Table>


                                       22

<PAGE>
<Table>
<Caption>
                           ORACLE
LOCATION                   ASSET#             DESCRIPTION
-----------------------------------------------------------------------------
<S>                        <C>                <C>
BLDG & I III.I III
-----------------------------------------------------------------------------
Boise, ID                  L12344             EXEC CHAIR MILESTONE EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12345             EXEC CHAIR MILESTONE EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12346             EXEC CHAIR MILESTONE EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12347             EXEC CHAIR MILESTONE EBONY
-----------------------------------------------------------------------------
Boise, ID                  L12342             AERON EXEC DARK GREY CHAIR
-----------------------------------------------------------------------------
Boise, ID                  L12341             2 CONFERENCE CHAIRS
-----------------------------------------------------------------------------
Boise, ID                  L12340             1 KNEE TILT OPEN ARM CHAIR
-----------------------------------------------------------------------------
Boise, ID                  L12339             SPLIT TOP TABLE
-----------------------------------------------------------------------------
Boise, ID                  L12337             FAB BOARD F WN F
-----------------------------------------------------------------------------
Santa Clara                L12400             7 HERMAN MILLER BRAND CHAIR
-----------------------------------------------------------------------------
Santa Clara                L12397             HERMAN MILLER BRAND FURNITU
-----------------------------------------------------------------------------
Santa Clara                L12396             CUBICLES PARTIAL PYMT
-----------------------------------------------------------------------------
Santa Clara                L12388             20 EXECUTIVE CHAIRS
-----------------------------------------------------------------------------
Santa Clara                L12394             6 COMPLETE OFFICES
-----------------------------------------------------------------------------
Santa Clara                L12383             HERMAN MILLER BRAND FURNITU
-----------------------------------------------------------------------------
Santa Clara                L12385             6 COMPLETE OFFICES
-----------------------------------------------------------------------------
Santa Clara                L12392             15 CHAIRS
-----------------------------------------------------------------------------
Santa Clara                L12390             CUBICLE WORKSTATIONS
-----------------------------------------------------------------------------
Santa Clara                L12367             HERMAN MILLER FURNITURE FIN
-----------------------------------------------------------------------------
Santa Clara                L12382             24 CHAIRS
-----------------------------------------------------------------------------
Santa Clara                L12379             HERMAN MILLER BRAND FURNITU
-----------------------------------------------------------------------------
Santa Clara                L12378             8 CHAIRS
-----------------------------------------------------------------------------
Santa Clara                L12376             4FT TABLE AND CREDENZA AND
-----------------------------------------------------------------------------
Santa Clara                L12373             2 DESK SET UPS TABLE AND CR
-----------------------------------------------------------------------------
Santa Clara                L12368             HERMAN MILLER BRAND FURNITU
-----------------------------------------------------------------------------
Santa Clara                L12367             2 WORKSTATION OUTLETS
-----------------------------------------------------------------------------
Santa Clara                L12349             AERON CHAIR AND HERMAN MILL
-----------------------------------------------------------------------------
Santa Clara                L12338             FREIGHT FOR 24 CHAIRS
-----------------------------------------------------------------------------

-----------------------------------------------------------------------------
MAIN EQUIP. & MACH & EQUIP
-----------------------------------------------------------------------------
Buchon Fab                 L12408             USED PROBER
-----------------------------------------------------------------------------
Boise, ID                  L12407             ODYSSEY LIBRARY CNSLT BUS H
-----------------------------------------------------------------------------
Buchon Fab                 L12406             MODEL 34A PICOPROBE WITH TI
-----------------------------------------------------------------------------

</Table>


                                       23


<PAGE>

                                  SCHEDULE 1.10
                               ASSUMED LIABILITIES

-        All financing obligations or other liabilities arising after the
         Closing Date which relate to the personal property Assets transferred
         pursuant to Section 3.1(a).

-        All obligations and liabilities arising after the Closing Date under
         the real property Leases transferred pursuant to Section 3.1(b).

                                       17
<PAGE>

                                  SCHEDULE 1.10
                                     LEASES
                                (COPIES ATTACHED)

-        Lease Agreement between Amkor Technology, Inc. and MK Plaza Trust dated
         August 14, 1997 for office space located at 720 Park Boulevard, Suite
         230, Boise, Idaho 83712.

-        Sublease Agreement between Amkor Technology, Inc. (Sublessor) and
         Department of Environmental Quality, State of Idaho (Sublessee) dated
         June 1, 2001 for office space located at 720 Park Boulevard, Suite 230,
         Boise Idaho 83712.

                                       18
<PAGE>

                                  SCHEDULE 4.1
                  TRANSFERRING EMPLOYEES/SEVERANCE OBLIGATIONS

                                       24
<PAGE>

                                  SCHEDULE 5.4

            SHARED IT DATABASES AND RESOURCES BETWEEN ATI, AWFS & ASI
                               REVISION 1/10/2002

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                     SYSTEM DESCRIPTION                                                 LOCATION                  TYPE
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                       <C>
ATK Network - Connects FAB to Amkor International Network in
Korea for data transfer to Amkor/AWFS systems                                       ATK                       Network
--------------------------------------------------------------------------------------------------------------------------
Amkor International Network - Allows data flow  from FAB to                         West Chester to           Network
Amkor Systems                                                                       Korea
--------------------------------------------------------------------------------------------------------------------------
Amkor Domestic Wide Area Network - Connects Amkor West                              West Chester,             Network
Chester computer center to other AWFS locations in Boise and                        Boise, Santa Clara
Santa Clara
--------------------------------------------------------------------------------------------------------------------------
Amkor European Network - Tail circuit from Amkor Ferney                             Europe                    Network
Voltaire office to AWFS office in Lyon. AWFS then rides our
international circuit from Ferney to Amkor Domestic Network
--------------------------------------------------------------------------------------------------------------------------
Internet services via West Chester Internet Connection -                            West Chester              Network
Provides path for Web Browsing, SMTP email, and Ecommerce.
Includes firewalls.
--------------------------------------------------------------------------------------------------------------------------
Voice Tie Lines - Voice riding on our data network and no cost /                    Boise, Santa Clara,       Network
minute                                                                              FAB
--------------------------------------------------------------------------------------------------------------------------
Internet Services via Boise Internet Connection  - Provides                         Boise                     Network
Internet  access for engineering design exchanges
--------------------------------------------------------------------------------------------------------------------------
CSS AS400 database - provides a central data store for                              West Chester              Application
manufacturing reporting.  Fed by FAB
--------------------------------------------------------------------------------------------------------------------------
Web.Data Ecommerce support - Provides infrastructure and                            West Chester              Application
systems to provide web based reports to customers over the internet
--------------------------------------------------------------------------------------------------------------------------
HR systems                                                                          Chandler                  Application
--------------------------------------------------------------------------------------------------------------------------
Email/Groupware - In addition to dedicated server for                               All Sites                 Application
Boise for email, AWFS utilizes the Amkor Domino system for
email distribution to other sites
--------------------------------------------------------------------------------------------------------------------------
Finance / Accounting for Lyon - Currently provided by Amkor                         Europe                    Application
Ferney Voltaire office
--------------------------------------------------------------------------------------------------------------------------
Finance / Accounting for AWFS Boise - ??                                            Boise                     Application
--------------------------------------------------------------------------------------------------------------------------
SPAM filtering - Email Spam filtering provided by Amkor                             Boise, Santa Clara        Application
outsourced vender
--------------------------------------------------------------------------------------------------------------------------
Software Licenses - Included Lotus Notes Client, Lotus Domino                       Boise, Santa Clara,       Software
Server, Lotus Sametime, Cadence Designs SW, MS Office,                              FAB
Cold Fusion, Anti Virus SW, Novel, Oracle DB (off Amkor Oracle
Enterprise License),
--------------------------------------------------------------------------------------------------------------------------
WorkStations - PC and Sun workstations                                              Boise, Santa Clara,       Hardware
                                                                                    FAB
--------------------------------------------------------------------------------------------------------------------------
Billing Services - Amkor loads AWFS invoice data into Amkor                         Boise, West Chester       Application
Financial Systems
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       25

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>4
<FILENAME>w84305exv10w17.txt
<DESCRIPTION>ASSIGNMENT AND ASSUMPTION AGREEMENT
<TEXT>
<PAGE>
                                                                  Exhibit 10.17

                       ASSIGNMENT and ASSUMPTION AGREEMENT


      This Assignment and Assumption Agreement ("Agreement") is entered into
effective as of the 28th day of February, 2003 (the "Effective Date"), by and
between Amkor Technology, Inc. ("Amkor"), Anam Semiconductor, Inc. ("Anam") and
Texas Instruments Incorporated ("TI").

      WHEREAS, Amkor, Anam and TI entered into a Second Amended and Restated
Manufacturing and Purchase Agreement dated December 31, 2001 (attached hereto as
Exhibit A) (the "MPA"); and

      WHEREAS, Amkor, Anam and TI entered into a Phase 3 Technical Assistance
Agreement dated July 1, 2000 (attached hereto as Exhibit B) (the "TAA"); and

      WHEREAS, Amkor wishes to assign its rights and delegate its duties and
obligations under the MPA and the TAA to Anam, and Anam wishes to obtain such
rights and assume such duties and obligations under the MPA and the TAA; and

      NOW THEREFORE, for good and valuable consideration, and intending to be
legally bound hereby, the parties agree as follows:

      1.    Assignment. By this Agreement, and except with respect to the
            duties, obligations and liabilities of Amkor created by,
            acknowledged, or arising out of this Agreement, Amkor hereby: (i)
            assigns to Anam all right, title and interest in, to and under the
            MPA and the TAA; and (ii) delegates to Anam all duties and
            obligations of performance under the MPA and the TAA; and (iii)
            fully releases and discharges TI from any and all duties,
            obligations and liabilities that TI may have to Amkor under the MPA,
            the TAA, or any transaction relating thereto from the Effective
            Date. Notwithstanding the foregoing, nothing herein shall relieve TI
            of its obligation to pay any undisputed outstanding trade payables
            ("Amounts") invoiced to TI and due to Amkor incurred by TI in the
            ordinary course of business under the MPA as of the Effective Date,
            which Amounts TI shall pay to Amkor in accordance with the terms of
            the MPA.

      2.    Assumption. Anam hereby acknowledges and accepts such assignment,
            and hereby assumes and agrees to fully perform all of Amkor's
            duties, obligations and liabilities under the MPA and TAA. Anam
            shall defend, indemnify and hold Amkor harmless from and against any
            and all claims arising out of Anam's performance or failure to
            perform, satisfy or discharge Amkor's duties, obligations and
            liabilities under the MPA and/or the TAA, as assumed by Anam
            hereunder.

      3.    Consent. Subject to completion by Anam and Amkor of the contemplated
            transaction whereby Amkor will sell, assign, and otherwise transfer
            to Anam, and/or its wholly-owned U.S. subsidiary, Amkor's assets
            related to the

                                        1
<PAGE>
            provision of foundry marketing services, and except with respect to
            the duties, obligations and liabilities of Amkor created by,
            acknowledged, or arising out of this Agreement, TI hereby: (i)
            acknowledges and consents to the assignment of the MPA and the TAA
            as set forth above; and (ii) agrees to look solely to Anam for
            performance and satisfaction of all duties, obligations and
            liabilities under the MPA and the TAA from the Effective Date; and
            (iii) fully releases and discharges Amkor from any and all such
            duties, obligations and liabilities under the MPA and the TAA from
            the Effective Date.

      4.    Confidentiality. Notwithstanding anything else in this Agreement to
            the contrary, Amkor hereby expressly acknowledges and agrees that
            its confidentiality and indemnification duties, obligations and
            liabilities as set forth in Article 13 of the MPA shall continue
            (including without limitation those confidentiality and
            indemnification duties, obligations and liabilities under Articles
            10 and 14.04 of the TAA and under Article 10 of the Phase 2
            Technology Assistance Agreement dated January 1, 1998).

      5.    Waiver. 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 as a bar to the
            exercise or enforcement of any rights at any time or at times
            hereafter.

      6.    Notices. All notices, orders and other 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. Kevin Ritchie
                           13353 TI Boulevard, M/S 344
                           Dallas, Texas 75243
                           Fax:  972-995-5086

            with a copy to:

                           General Counsel
                           7839 Churchill Way M/S 3999
                           Dallas, Texas 75251
                           Fax: 972-917-4418

            if to Amkor:

                           Mr. Eric R. Larson
                           1900 South Price Road
                           Chandler, AZ 85248
                           Fax: 480-821-2616

                                        2
<PAGE>
            with a copy to:

                           Kevin J. Heron, Esq.
                           General Counsel
                           Amkor Technology, Inc.
                           1345 Enterprise Drive
                           West Chester, PA 19380
                           Fax: 610-431-7189

            if to Anam:

                           Kwang Jo An
                           DaeGeun Yoon
                           Anam Semiconductor, Inc.
                           891-10 Daechi-dong, Kangnam-gu
                           Seoul 133-523, Korea
                           Fax: 011 82 2 3484-2818

                           KiSuk (Richard) Chang
                           Anam Semiconductor, Inc.
                           891-10 Daechi-dong, Kangnam-gu
                           Seoul 133-523, Korea
                           Fax: 011 82 2 3484-2851

      7.    No Publicity. 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 the contents
            of this Agreement or the transactions contemplated hereby.

      8.    Severability. 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.

      9.    Further Actions. The parties agree to execute and deliver to each
            other all additional instruments, to provide all information, and to
            do all further acts and things as may be reasonably necessary or as
            may be reasonably requested by any party hereto, to accomplish the
            purposes contemplated hereby; provided that compliance with this
            section does not cause undue or unreasonable burden or expense to
            the complying party.

      10.   Governing Law. This Agreement shall be governed by, 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 Texas. The
            parties hereby irrevocably consent to the jurisdiction of the courts
            of the state of Texas and the Federal courts of the U.S.A. located
            in the state of Texas.

      11.   Counterparts. 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.

                                        3
<PAGE>
      12.   No Other Changes. Except as modified hereby, the MPA, and the TAA
            shall remain in full force and effect.

      13.   Entire Agreement. This Agreement contains the parties' entire,
            integrated agreement relating to the subject matter hereof, and
            supersedes all prior oral and written understanding and agreements
            relating thereto, and may not be modified, discharged or terminated
            except by the written consent of the parties.

      14.   No Conflicts. Anam and Amkor hereby represent and warrant that the
            execution and performance of this Agreement is not in conflict with,
            does not constitute a default under or violate (i) any terms,
            conditions or provisions of any of their respective organization or
            governance documents, (ii) any of the terms, conditions or
            provisions of any document, agreement or other instrument to which
            it is a party or by which it is bound, (iii) any applicable law or
            regulation, or (iv) any applicable judgment, writ, injunction,
            decree order or ruling of any court or governmental authority. TI
            hereby represents and warrants that the execution and performance of
            this Agreement is not in conflict with, does not constitute a
            default under or violate (i) any terms, conditions or provisions of
            any of the organization or governance documents of TI, (ii) any of
            the terms, conditions or provisions of any document, agreement or
            other instrument to which TI is a party or by which it is bound,
            (iii) any law or regulation binding upon TI, or (iv) any judgment,
            writ, injunction, decree order or ruling of any court or
            governmental authority binding on TI.

      WHEREBY, the parties have caused this Agreement to be executed by their
duly authorized representatives effective as of the date first set forth above.


AMKOR TECHNOLOGY, INC.

/s/ Eric R. Larson
--------------------------------------
By:      Eric R. Larson
Title:   Executive Vice President
         Corporate Development


TEXAS INSTRUMENTS INCORPORATED

/s/ Kevin Ritchie
--------------------------------------
By:      Kevin Ritchie
Title:   Senior Vice President
         Worldwide MAKE Operations Manager


                                       4
<PAGE>
ANAM SEMICONCUCTOR, INC.

/s/ Kwang Jo An
--------------------------------------
By:      Kwang Jo An
Title:   Executive Vice President


                                       5
<PAGE>
                                    EXHIBIT A

        Second Amended and Restated Manufacturing and Purchase Agreement
                             Dated December 31, 2001

                                 (see attached)

























                                       6
<PAGE>
                                    EXHIBIT B

                     Phase 3 Technical Assistance Agreement
                               Dated July 1, 2000

                                 (see attached)




















                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>5
<FILENAME>w84305exv12w1.txt
<DESCRIPTION>COMPUTATION OF RATIO OF EARNINGS
<TEXT>
<PAGE>
                                                                    EXHIBIT 12.1

                             AMKOR TECHNOLOGY, INC.
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                        (IN THOUSANDS EXCEPT RATIO DATA)



<TABLE>
<CAPTION>
                                                                    YEAR ENDED DECEMBER 31,
                                              -----------------------------------------------------------------
                                                1998           1999          2000          2001          2002
                                              ---------     ---------     ---------     ---------     ---------
<S>                                           <C>           <C>           <C>           <C>           <C>
Earnings
   Income (loss) before income taxes and
     equity in income (loss) of investees
     and minority interest ..............     $ 100,735     $ 105,288     $ 197,429     $(429,950)     (550,847)

   Interest expense .....................        25,860        61,803       127,027       152,067       143,441

   Amortization of debt issuance costs ..         1,217         3,466         7,013        22,321         8,251

   Interest portion of rent .............         2,584         3,481         4,567         7,282         4,995

   Less loss of affiliates ..............            --         2,622            --            --            --
                                              ---------     ---------     ---------     ---------     ---------

                                              $ 130,396     $ 176,660     $ 336,036     $(248,280)    $(394,160)
                                              =========     =========     =========     =========     =========


Fixed Charges
   Interest expense .....................        25,860        61,803       127,027       152,067       143,441

   Amortization of debt issuance costs ..         1,217         3,466         7,013        22,321         8,251

   Interest portion of rent .............         2,584         3,481         4,567         7,282         4,995
                                              ---------     ---------     ---------     ---------     ---------

                                              $  29,661     $  68,750     $ 138,607     $ 181,670     $ 156,687
                                              =========     =========     =========     =========     =========

Ratio of earnings to fixed charges ......          4.4x          2.6x          2.4x          -- x(1)       -- x(1)
                                              =========     =========     =========     =========     =========
</TABLE>


(1) The ratio of earnings to fixed charges was less than 1:1 for the year ended
December 31, 2002. In order to achieve a ratio of earnings to fixed charges of
1:1, we would have had to generate an additional $550.8 million of earnings
during the year ended December 31, 2002. We recorded charges totaling $292.0
million for the year ended December 31, 2002 for goodwill and long-lived asset
impairments, lease terminations and other exit costs. The ratio of earnings to
fixed charges was less than 1:1 for the year ended December 31, 2001. In order
to achieve a ratio of earnings to fixed charges of 1:1, we would have had to
generate an additional $430.0 million of earnings in the year ended December 31,
2001.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>6
<FILENAME>w84305exv21w1.txt
<DESCRIPTION>LIST OF SUBSIDIARIES OF THE REGISTRANT
<TEXT>
<PAGE>
                                                                    EXHIBIT 21.1

                             AMKOR TECHNOLOGY, INC.

                              LIST OF SUBSIDIARIES

A.    Amkor Technology Hong Kong, Ltd. a limited liability corporation organized
      under the laws of Hong Kong (incorporated November 1, 2000).
B.    Wafer Fabrication Services SARL, a corporation organized under the laws of
      France.
C.    60% ownership in Amkor/Iwate, KK, a corporation incorporated under the
      laws of Japan.
D.    13% ownership in Amkor Technology Taiwan (Linkou), Ltd., a corporation
      organized under the laws of the Republic of China (acquired July 26, 2001)
E.    Amkor Assembly and Test (Shanghai) Co., Ltd., a wholly owned corporation
      organized under the laws of the Republic of China (incorporated March 8,
      2001)
F.    Amkor Investments Holdings, Co. - a Delaware Corporation (incorporated
      September 26, 2002)
G.    Guardian Assets, Inc., a Delaware corporation, and its wholly owned
      subsidiaries:
      1)    Amkor Technology Euroservices SARL, a corporation organized under
            the laws of France.
      2)    Amkor Technology Japan, KK., a corporation organized under the laws
            of Japan (incorporated July 23, 1999).
      3)    Amkor International Holdings, a corporation organized under the laws
            of the British Cayman Islands, and its wholly owned subsidiary:
            a)    P-Four, Inc., a corporation organized under the laws of the
                  Philippines and its subsidiary:
                  (i)   60% ownership of Amkor Technology Philippines, Inc.,
                        organized under the laws of the Philippines (40%
                        ownership by Amkor Technology Limited):
            b)    Amkor Technology, Limited, a wholly owned corporation
                  organized under the laws of the British Cayman Islands; and
                  its subsidiary:
                  (i)   AT Korea , a wholly owned corporation organized under
                        the laws of the Republic of Korea.
                  (ii)  SemiSys Co., Ltd., a wholly owned corporation organized
                        under the laws of the Republic of Korea.
                  (iii) 40% ownership of Amkor Technology Philippines Inc.,
                        organized under the laws of the Philippines (60%
                        ownership by P-Four, Inc.).
                  (iv)  84% ownership of Amkor Technology Taiwan (Linkou), Ltd.,
                        a corporation organized under the laws of the Republic
                        of China (acquired July 26, 2001)
                  (v)   98% ownership in Amkor Technology Taiwan (Lung Tan).
                        Ltd., a corporation organized under the laws of the
                        Republic of China (acquired July 10, 2001)
                  (a)   Amkor Greater China, Ltd. (formerly Sampo Investments,
                        Ltd.), a corporation organized under the laws of the
                        Republic of China (acquired July 10, 2001)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>7
<FILENAME>w84305exv23w1.txt
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS LLP
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (File Nos. 333-39642, 333-68032, and 333-81334) and Form
S-8 (File Nos. 333-62891, 333-63430, 333-76254, 333-86161 and 333-100814) of
Amkor Technology, Inc. of our report dated January 29, 2003, except for the
information in Note 7 describing the transaction involving the Company's wafer
fabrication business, for which the date is February 28, 2003 and the sale of
the Company's investment in ASI for which the date is March 24, 2003, relating
to the financial statements and financial statement schedule, which appears in
this Form 10-K.


PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
March 27, 2003

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>8
<FILENAME>w84305exv23w2.txt
<DESCRIPTION>CONSENT OF SYCIP GORRES VELAYO & CO.
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.2

                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (File Nos. 333-39642, 333-68032 and 333-81334) and Form
S-8 filings (File Nos. 333-62891, 333-63430, 333-76254, 333-86161 and
333-100814) of Amkor Technology, Inc. of our report dated January 15, 2003
relating to the financial statements of Amkor Technology Philippines, Inc.
(formerly Amkor Technology Philippines (P1/P2), Inc.) which appears in this Form
10-K.


SyCip Gorres Velayo & Co.

Makati City, Philippines
March 27, 2003



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>9
<FILENAME>w84305exv23w3.txt
<DESCRIPTION>CONSENT OF SYCIP GORRES VELAYO + CO.
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.3








                           [INTENTIONALLY OMITTED]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.4
<SEQUENCE>10
<FILENAME>w84305exv23w4.txt
<DESCRIPTION>CONSENT OF SAMIL ACCOUNTING CORPORATION
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.4


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (File Nos. 333-39642, 333-68032, and 333-81334) and Form
S-8 (File Nos. 333-62891, 333-63430, 333-76254, 333-86161 and 333-100814) of
Amkor Technology, Inc. of our report dated January 17, 2003, except for Note 21,
which is as of January 27, 2003, relating to the consolidated financial
statements of Anam Semiconductor, Inc. and its subsidiary which appears in this
Current Report on Form 8-K.


Samil Accounting Corporation

Seoul, Korea
March 27, 2003

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>11
<FILENAME>w84305exv99w1.txt
<DESCRIPTION>CERTIFICATION OF CEO AND CFO
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.1

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



      I, James J. Kim, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual
Report of Amkor Technology, Inc. on Form 10-K for the year ended December 31,
2002 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that information contained in such Form 10-K
fairly presents in all material respects the financial condition and results of
operations of Amkor Technology, Inc.




                                   By:  /s/James J. Kim
                                        ------------------------------------
                                   Name:   James J. Kim
                                   Title:  Chief Executive Officer




      I, Kenneth T. Joyce, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the
Annual Report of Amkor Technology, Inc. on Form 10-K for the year ended December
31, 2002 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that information contained in such Form 10-K
fairly presents in all material respects the financial condition and results of
operations of Amkor Technology, Inc.




                                   By:  /s/Kenneth T. Joyce
                                        ------------------------------------
                                   Name:   Kenneth T. Joyce
                                   Title:  Chief Financial Officer









</TEXT>
</DOCUMENT>
</SUBMISSION>
