<SUBMISSION>
<ACCESSION-NUMBER>0000893220-03-001788
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>7
<PERIOD>20030930
<FILING-DATE>20031103
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AMKOR TECHNOLOGY INC
<CIK>0001047127
<ASSIGNED-SIC>3674
<IRS-NUMBER>231722724
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-29472
<FILM-NUMBER>03971943
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1345 ENTERPRISE DR
<CITY>WEST CHESTER
<STATE>PA
<ZIP>19380
<PHONE>6104319600
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1345 ENTERPRISE DR
<CITY>WEST CHESTER
<STATE>PA
<ZIP>19380
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>w91175e10vq.txt
<DESCRIPTION>AMKOR TECHNOLOGY, INC.
<TEXT>
<PAGE>
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                ----------------
                                    FORM 10-Q
                                ----------------

[X]   QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003

                                       OR

[ ]   TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934


                        COMMISSION FILE NUMBER 000-29472

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

          Delaware                                     23-1722724
  (STATE OF INCORPORATION)              (I.R.S. EMPLOYER IDENTIFICATION NUMBER)

                              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

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

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


      The number of outstanding shares of the registrant's Common Stock as
                      of October 30, 2003 was 166,850,734.

================================================================================
<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1.      CONSOLIDATED FINANCIAL STATEMENTS

                             AMKOR TECHNOLOGY, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                         FOR THE THREE MONTHS ENDED          FOR THE NINE MONTHS ENDED
                                                                SEPTEMBER 30,                      SEPTEMBER 30,
                                                          -------------------------       -----------------------------
                                                            2003             2002            2003               2002
                                                          ---------       ---------       -----------       -----------
                                                                  (UNAUDITED)                        (UNAUDITED)
<S>                                                       <C>             <C>             <C>               <C>
Net revenues .......................................      $ 423,784       $ 393,563       $ 1,144,862       $ 1,032,989
Cost of revenues ...................................        322,369         346,053           922,617           998,557
                                                          ---------       ---------       -----------       -----------
Gross profit .......................................        101,415          47,510           222,245            34,432
                                                          ---------       ---------       -----------       -----------
Operating expenses:
     Selling, general and administrative ...........         45,023          45,118           131,828           137,639
     Research and development ......................          6,836           7,622            19,454            24,535
     Loss (gain) on disposal of fixed assets, net ..           (148)           (200)             (870)            2,912
     Amortization of acquired intangibles ..........          2,035           2,000             6,103             4,995
     Special charges ...............................             --          13,819                --           281,985
                                                          ---------       ---------       -----------       -----------
         Total operating expenses ..................         53,746          68,359           156,515           452,066
                                                          ---------       ---------       -----------       -----------
Operating income (loss) ............................         47,669         (20,849)           65,730          (417,634)
                                                          ---------       ---------       -----------       -----------
Other expense (income):
     Interest expense, net .........................         35,574          37,391           118,822           111,010
     Foreign currency loss (gain) ..................           (895)           (821)           (1,083)            1,881
     Other expense (income), net ...................          2,319             996            23,380               (11)
                                                          ---------       ---------       -----------       -----------
         Total other expense .......................         36,998          37,566           141,119           112,880
                                                          ---------       ---------       -----------       -----------
Income (loss) before income taxes, equity investment
     losses, minority interest and discontinued
     operations ....................................         10,671         (58,415)          (75,389)         (530,514)
Equity investment losses (see Note 12) .............             --         (14,299)           (3,555)         (166,040)
Minority interest income (expense) .................         (1,809)            423            (2,135)           (2,238)
                                                          ---------       ---------       -----------       -----------
Income (loss) from continuing operations
     before income taxes ...........................          8,862         (72,291)          (81,079)         (698,792)
                                                          ---------       ---------       -----------       -----------
Income tax benefit .................................         (6,908)        (11,078)           (6,072)          (61,891)
                                                          ---------       ---------       -----------       -----------
Income (loss) from continuing operations ...........         15,770         (61,213)          (75,007)         (636,901)
                                                          ---------       ---------       -----------       -----------
Discontinued operations (see Note 3):
Income from wafer fabrication services
   business, net of tax ............................             --           1,906             3,047             6,258
Gain on sale of wafer fabrication services
   business, net of tax ............................             --              --            51,519                --
                                                          ---------       ---------       -----------       -----------
Income from discontinued operations ................             --           1,906            54,566             6,258
                                                          ---------       ---------       -----------       -----------
Net income (loss) ..................................      $  15,770       $ (59,307)      $   (20,441)      $  (630,643)
                                                          =========       =========       ===========       ===========
Per Share Data:
Basic and diluted income (loss) per common share
   from continuing operations ......................      $    0.09       $   (0.37)      $     (0.45)      $     (3.89)
Basic and diluted income per common share
   from discontinued operations ....................             --            0.01              0.33              0.04
                                                          ---------       ---------       -----------       -----------
Basic and diluted net income (loss)
    per common share ...............................      $    0.09       $   (0.36)      $     (0.12)      $     (3.85)
                                                          =========       =========       ===========       ===========
Shares used in computing basic net
   income (loss) per common share ..................        166,628         164,489           165,883           163,854
                                                          =========       =========       ===========       ===========
Shares used in computing diluted net
   income (loss) per common share ..................        171,440         164,489           165,883           163,854
                                                          =========       =========       ===========       ===========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       2
<PAGE>
                             AMKOR TECHNOLOGY, INC.
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                           SEPTEMBER 30,      DECEMBER 31,
                                                                               2003              2002
                                                                           -------------     -------------
                                                                            (UNAUDITED)
<S>                                                                        <C>               <C>
                                   ASSETS
Current assets:
     Cash and cash equivalents .......................................      $   340,503       $   311,249
     Accounts receivable:
         Trade, net of allowance of $6,862 in 2003 and $7,122 in 2002           280,959           234,056
         Other .......................................................            6,452             8,532
     Inventories .....................................................           88,280            72,121
     Other current assets ............................................           48,071            48,661
                                                                            -----------       -----------
              Total current assets ...................................          764,265           674,619
                                                                            -----------       -----------
Property, plant and equipment, net ...................................          978,409           966,338
                                                                            -----------       -----------
Investments ..........................................................           47,281            83,235
                                                                            -----------       -----------
Other assets:
     Goodwill ........................................................          629,502           628,099
     Acquired intangibles ............................................           39,504            45,033
     Due from affiliates .............................................               --            20,852
     Other ...........................................................           76,711           114,178
     Assets of discontinued operations (see Note 3) ..................              247            25,630
                                                                            -----------       -----------
                                                                                745,964           833,792
                                                                            -----------       -----------
              Total assets ...........................................      $ 2,535,919       $ 2,557,984
                                                                            ===========       ===========

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Bank overdraft ..................................................      $     5,130       $     4,633
     Short-term borrowings and current portion of long-term debt .....           54,240            71,023
     Trade accounts payable ..........................................          195,882           180,999
     Due to affiliates ...............................................            3,109            70,243
     Accrued expenses ................................................          166,109           184,223
                                                                            -----------       -----------
              Total current liabilities ..............................          424,470           511,121
Long-term debt .......................................................        1,785,765         1,737,690
Other noncurrent liabilities .........................................           79,418            67,661
                                                                            -----------       -----------
              Total liabilities ......................................        2,289,653         2,316,472
                                                                            -----------       -----------

Minority interest ....................................................           11,224            10,145
                                                                            -----------       -----------
Commitments and contingencies
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 166,767 in 2003 and 165,156 in 2002              167               166
     Additional paid-in capital ......................................        1,179,904         1,170,227
     Accumulated deficit .............................................         (954,175)         (933,734)
     Receivable from stockholders ....................................               --            (2,887)
     Accumulated other comprehensive income (loss) ...................            9,146            (2,405)
                                                                            -----------       -----------
              Total stockholders' equity .............................          235,042           231,367
                                                                            -----------       -----------
              Total liabilities and stockholders' equity .............      $ 2,535,919       $ 2,557,984
                                                                            ===========       ===========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       3
<PAGE>
                             AMKOR TECHNOLOGY, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                       RECEIVABLE
                                             COMMON STOCK     PAID-IN    ACCUMULATED      FROM
                                            SHARES   AMOUNT   CAPITAL      DEFICIT    STOCKHOLDERS
                                            ------   ------   -------      -------    ------------
<S>                                         <C>      <C>     <C>         <C>          <C>
Balance at December 31, 2001 .............  161,782   $162   $1,123,541  $(106,975)    $(3,276)
   Net loss ..............................       --     --           --   (630,643)         --
   Unrealized loss on investments,
     net of tax ..........................       --     --           --         --          --
   Cumulative translation adjustment .....       --     --           --         --          --

   Comprehensive loss ....................

   Issuance of stock for acquisitions ....    1,827      2       35,200         --          --
   Issuance of stock through employee
     stock purchase plan and stock options      880      1        9,480         --          --
   Payment received from stockholder .....       --     --           --         --         389
                                            -------   ----   ----------  ---------     -------
Balance at September 30, 2002 ............  164,489   $165   $1,168,221  $(737,618)    $(2,887)
                                            =======   ====   ==========  =========     =======

Balance at December 31, 2002 .............  165,156   $166   $1,170,227  $(933,734)    $(2,887)
   Net loss ..............................       --     --           --    (20,441)         --
   Unrealized gain on investments,
     net of tax ..........................       --     --           --         --          --
   Cumulative translation adjustment .....       --     --           --         --          --

   Comprehensive income ..................

   Issuance of stock through employee
     stock purchase plan and stock options    1,611      1        9,677         --          --
   Payment received from stockholder .....       --     --           --         --       2,887
                                            -------   ----   ----------  ---------     -------
Balance at September 30, 2003 ............  166,767   $167   $1,179,904  $(954,175)    $    --
                                            =======   ====   ==========  =========     =======
</TABLE>

<TABLE>
<CAPTION>
                                             ACCUMULATED
                                               OTHER
                                            COMPREHENSIVE                COMPREHENSIVE
                                               INCOME                       INCOME
                                               (LOSS)         TOTAL         (LOSS)
                                               -----          -----         ------
<S>                                         <C>            <C>           <C>
Balance at December 31, 2001 .............     $(4,735)    $ 1,008,717
   Net loss ..............................          --        (630,643)    $(630,643)
   Unrealized loss on investments,
     net of tax ..........................        (655)           (655)         (655)
   Cumulative translation adjustment .....       2,435           2,435         2,435
                                                                           ---------
   Comprehensive loss ....................                                 $(628,863)
                                                                           =========
   Issuance of stock for acquisitions ....          --          35,202
   Issuance of stock through employee
     stock purchase plan and stock options          --           9,481
   Payment received from stockholder .....          --             389
                                               -------     -----------
Balance at September 30, 2002 ............     $ 2,955     $   424,926
                                               =======     ===========

Balance at December 31, 2002 .............     $(2,405)    $   231,367
   Net loss ..............................          --         (20,441)    $ (20,441)
   Unrealized gain on investments,
     net of tax ..........................       5,225           5,225         5,225
   Cumulative translation adjustment .....       6,326           6,326         6,326
                                                                           ---------
   Comprehensive income ..................                                 $  (8,890)
                                                                           =========
   Issuance of stock through employee
     stock purchase plan and stock options          --           9,678
   Payment received from stockholder .....          --           2,887
                                               -------     -----------
Balance at September 30, 2003 ............     $ 9,146     $   235,042
                                               =======     ===========
</TABLE>


        The accompanying notes are an integral part of these statements.


                                       4
<PAGE>
                             AMKOR TECHNOLOGY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                    FOR THE NINE MONTHS ENDED
                                                                                           SEPTEMBER 30,
                                                                                    -------------------------
                                                                                       2003             2002
                                                                                       ----             ----
                                                                                            (UNAUDITED)
<S>                                                                                 <C>             <C>
Cash flows from continuing operating activities:
   Loss from continuing operations ...........................................      $ (75,007)      $(636,901)
     Adjustments to reconcile loss from continuing operations
     to net cash provided by  operating activities --
     Depreciation and amortization ...........................................        165,360         264,108
     Special charges .........................................................             --         274,340
     Amortization of deferred debt issuance costs ............................         15,658           6,172
     Provision for excess and obsolete inventory .............................          2,904           3,447
     Deferred income taxes ...................................................          9,621         (56,082)
     Equity in loss of investees .............................................          3,555          24,737
     Other losses on investments .............................................          2,358         144,215
     Debt redemption premium payment .........................................         21,304              --
     Minority interest .......................................................          2,135           2,238
   Changes in assets and liabilities excluding effects of acquisitions --
     Accounts receivable .....................................................        (42,497)        (38,669)
     Other receivables .......................................................          1,869            (201)
     Inventories .............................................................        (18,369)         (8,352)
     Due to/from affiliates, net .............................................         (1,405)          1,645
     Other current assets ....................................................            413         (16,005)
     Other non-current assets ................................................          4,275          16,233
     Accounts payable ........................................................         10,522          23,321
     Accrued expenses ........................................................        (16,186)         37,188
     Other long-term liabilities .............................................         13,499           7,988
                                                                                    ---------       ---------
       Net cash provided by operating activities .............................        100,009          49,422
                                                                                    ---------       ---------
Cash flows from continuing investing activities:
   Purchases of property, plant and equipment ................................       (148,230)        (82,298)
   Acquisitions, net of cash acquired ........................................             --         (10,797)
   Proceeds from the sale of property, plant and equipment ...................          2,802           2,200
   Proceeds from disposition of equity investment ............................             --          58,139
   Proceeds from the sale (purchase) of investments, net .....................         30,981          (2,011)
   Proceeds from note receivable .............................................         18,253              --
   Other .....................................................................            829              --
                                                                                    ---------       ---------
       Net cash used in investing activities .................................        (95,365)        (34,767)
                                                                                    ---------       ---------
Cash flows from continuing financing activities:
   Net change in bank overdrafts and short-term borrowings ...................            497           1,807
   Net proceeds from issuance of long-term debt ..............................        584,529              --
   Payments of long-term debt, including redemption premium payment ..........       (589,136)        (25,475)
   Proceeds from issuance of stock through employee stock
     purchase plan and stock options .........................................          9,678           9,481
   Payment received from stockholder .........................................          2,887             389
                                                                                    ---------       ---------
       Net cash provided by (used in) financing activities ...................          8,455         (13,798)
                                                                                    ---------       ---------
Effect of exchange rate fluctuations on cash and cash equivalents related
   to continuing operations ..................................................          2,522             905
                                                                                    ---------       ---------
Cash flows from discontinued operations:
   Net cash provided by operating activities .................................         11,221          33,890
   Net cash provided by investing activities .................................          2,412              --
   Net cash used in financing activities .....................................             --            (671)
                                                                                    ---------       ---------
       Net cash provided by discontinued operations ..........................         13,633          33,219
                                                                                    ---------       ---------

Net increase in cash and cash equivalents ....................................         29,254          34,981
Cash and cash equivalents, beginning of period ...............................        311,249         200,057
                                                                                    ---------       ---------
Cash and cash equivalents, end of period .....................................      $ 340,503       $ 235,038
                                                                                    =========       =========

Supplemental disclosures of cash flow information:
   Cash paid during the period for:
     Interest ................................................................      $ 107,869       $ 103,174
     Income taxes ............................................................      $   7,553       $   5,754
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       5
<PAGE>
                             AMKOR TECHNOLOGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   INTERIM FINANCIAL STATEMENTS

     Basis of Presentation. The consolidated financial statements and related
disclosures as of September 30, 2003 and for the three and nine months ended
September 30, 2003 and 2002 are unaudited, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In our opinion, these financial
statements include all adjustments (consisting only of normal recurring
adjustments) necessary for the fair presentation of the results for the interim
periods. These financial statements should be read in conjunction with our
latest annual report as of December 31, 2002 filed on Form 10-K, as amended,
with the Securities and Exchange Commission. The results of operations for the
three and nine months ended September 30, 2003 are not necessarily indicative of
the results to be expected for the full year. Certain previously reported
amounts have been reclassified to conform with the current presentation.

     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, fluctuation in operating results, the decline in average
selling prices, our high leverage and the restrictive covenants contained in the
agreements governing our indebtedness, our investment in ASI, the absence of
significant backlog in our business, our dependence on international operations
and sales, difficulties integrating acquisitions, our dependence on materials
and equipment suppliers, the increased litigation incident to our business,
rapid technological change, competition, our need to comply with existing and
future environmental regulations, the enforcement of intellectual property
rights by or against us, continued control by existing stockholders, stock price
volatility and economic uncertainty resulting from terrorist activities.

     Consolidation of Variable Interest Entities. In January 2003, the Financial
Accounting Standards Board (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 required to be adopted by December
31, 2003. We have elected early adoption as of July 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. Beginning July 1, 2003, we have consolidated these Philippine
realty corporations within our financial statements. As of September 30, 2003,
the combined book value of the assets and liabilities associated with these
Philippine realty corporations included in our consolidated balance sheet were
$21.6 million and $1.6 million (which excludes an intercompany payable of $22.9
million that eliminates during consolidation), respectively. There was no net
effect to our consolidated statements of income as a result of the consolidation
of the Philippine realty corporations as these entities were previously
accounted for as equity investments with our proportionate share of gains and
losses recorded in our historical consolidated statements of income. In
addition, the consolidation of Philippine realty companies was reflected as a
non-cash transaction in the consolidated statements of cash flows.

     Receivable from Stockholders. 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


                                       6
<PAGE>
amounts to the Kim Family. These amounts, which principally related to the
finalization of AEI's federal tax return, have been reflected as a receivable
from stockholders in the stockholders' equity section of our balance sheets.
During the three months ended September 30, 2003, the loan was repaid in full.

2.   STOCK COMPENSATION

     We apply Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees," and related Interpretations, to our stock based
plans. No compensation expense has been recognized related to our employee stock
based plans. If compensation costs for our stock based 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 and income
per share for the three months ended September 30, 2003 would have decreased and
our net loss and loss per share would have increased for all other periods
presented.

     The following table illustrates the effect on net income (loss) and income
(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 THREE MONTHS ENDED          FOR THE NINE MONTHS ENDED
                                                                SEPTEMBER 30,                      SEPTEMBER 30,
                                                     -------------------------------    -------------------------------
                                                          2003             2002              2003             2002
                                                     -------------     ------------     -------------     -------------
                                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                  <C>               <C>              <C>               <C>
Net income (loss):
   Net income (loss), as reported................    $      15,770     $     (59,307)   $     (20,441)    $    (630,643)
   Deduct: Total stock-based employee
      compensation determined under fair value
      based method...............................            7,934            10,033           22,259            30,695
                                                     -------------     -------------    -------------     -------------
Pro forma net income (loss)......................    $       7,836     $     (69,340)   $     (42,700)    $    (661,338)
                                                     =============     =============    =============     =============

Income (loss) per share:
   Basic and diluted:
     As reported.................................    $        0.09     $      (0.36)    $      (0.12)     $      (3.85)
     Pro forma...................................    $        0.05     $      (0.42)    $      (0.26)     $      (4.04)
</TABLE>

     For the pro forma net income (loss), 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 in 2003 and 2002 and our recognition of a
valuation allowance against the associated net operating loss carryforwards.

     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. Pursuant to the
terms and conditions of the offer to exchange, a total of 1,633 eligible
employees participated. On June 16, 2003, we granted 6,978,563 shares of our
common stock under the 1998 Plan and 35,000 shares of our common stock under the
Director's Plan for the options tendered by eligible employees and members of
our board of directors and accepted by our company. For options that were
previously granted under the 1998 French Plan and were surrendered pursuant to
this program, we granted an additional 248,200 replacement options under the
1998 Plan. We have issued new option grants equal to the same number of shares
surrendered by the employees. The exercise price of the new options was $10.79,
which was equal to the fair market value of our stock price on the date of
grant. The vesting term of these new options are similar to the tendered options
except the new options contain an additional one-year vesting period prior to
any options becoming exercisable.

   2003 Nonstatutory Inducement Grant Stock Plan

     On September 9, 2003, we initiated the 2003 Nonstatutory Inducement Grant
Stock Plan (the "2003 Plan"). The 2003 Plan generally provides for the grant to
employees, directors and consultants of stock options and stock purchase rights.
The 2003 Plan terminates at the discretion of the Board of Directors. A total of
300,000 shares are reserved for issuance under the 2003 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 300,000 as of each January 1.


                                       7
<PAGE>
3.    DISCONTINUED OPERATIONS

      On February 28, 2003, we sold our wafer fabrication services business to
Anam Semiconductor, Inc. ("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 reflect our wafer
fabrication services segment as a discontinued operation and have restated our
historical results. In connection with the disposition of our wafer fabrication
business, during the first quarter of 2003 we recorded $1.0 million in severance
and other exit costs to close our wafer fabrication services operations in
Boise, Idaho and Lyon, France. Also in the first quarter of 2003, we recognized
a pre-tax gain on the disposition of our wafer fabrication services business of
$58.6 million ($51.5 million, net of tax), which is reflected in income from
discontinued operations. The carrying value of the sold net assets associated
with the business as of February 28, 2003 was $2.4 million.

A summary of the results from discontinued operations for the nine months ended
September 30, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                                                    FOR THE NINE MONTHS ENDED
                                                                                           SEPTEMBER 30,
                                                                                           -------------
                                                                                        2003          2002
                                                                                        ----          ----
                                                                                          (IN THOUSANDS)
<S>                                                                                 <C>             <C>
Net sales .....................................................................      $ 34,636       $180,464
Gross profit ..................................................................         3,451         16,851
Operating income ..............................................................         3,455         10,093
Gain on sale of wafer fabrication services business ...........................        58,600             --
Other (income) expense ........................................................           (11)            44
Tax expense ($7.1 million associated with gain on sale of the business in 2003)         7,500          3,791
Net income from discontinued operations .......................................        54,566          6,258
</TABLE>

A summary of the assets of our discontinued operations are as follows:

<TABLE>
<CAPTION>
                                                                    SEPTEMBER 30,          DECEMBER 31,
                                                                        2003                  2002
                                                                        ----                  ----
                                                                              (IN THOUSANDS)
<S>                                                                 <C>                    <C>
Accounts receivable .............................................      $   247               $23,025
Property, plant and equipment, net of accumulated depreciation of
     $8.4 million at December 31, 2002 ..........................           --                 2,605
                                                                       -------               -------
                                                                       $   247               $25,630
                                                                       =======               =======
</TABLE>

4.    SPECIAL CHARGES

      Special charges during 2002 consist of the following:

<TABLE>
<CAPTION>
                                                       THREE                      NINE
                                                    MONTHS ENDED              MONTHS ENDED
                                                    SEPTEMBER 30,             SEPTEMBER 30,
                                                        2002                      2002
                                                        ----                      ----
                                                               (IN THOUSANDS)
<S>                                                 <C>                       <C>
Impairment of long-lived assets (Note 6) .......      $     --                  $190,266
Impairment of goodwill (Note 5) ................            --                    73,080
Lease termination and other exit costs (Note 14)        13,819                    18,639
                                                      --------                  --------
                                                      $ 13,819                  $281,985
                                                      ========                  ========
</TABLE>

5.    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


                                       8
<PAGE>
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 previously accounted for under the equity
method of accounting.

     As of the adoption date of the standard, we reassessed the useful lives of
our identified intangibles and found them to be appropriate. Goodwill and other
intangible assets were attributable to two reporting units, packaging and test
services. Goodwill is allocated to each reporting unit proportionate to the fair
values of the acquired packaging and test assets. 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.

     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 when a significant adverse change in the business climate occurs and
when long-lived assets are tested for recoverability. Our test services assets
and several packaging services assets remained at low utilization rates during
the second quarter of 2002 and as of such date, were no longer expected to reach
previously anticipated utilization levels. As discussed in Note 6, 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 in 2002. The determination of fair value was based
on projected cash flows. During the second quarter of 2003, we performed our
annual review of goodwill for impairment. Based on our review, we concluded that
goodwill, as of June 30, 2003, was not impaired.

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, 2003............     $     628,099    $         --      $     628,099
Translation adjustments..................             1,403              --              1,403
                                              -------------    -------------     -------------
Balance as of September 30, 2003.........     $     629,502    $         --      $     629,502
                                              =============    =============     =============

Balance as of January 1, 2002............     $     586,344    $      72,786     $     659,130
Goodwill acquired........................            35,845              --             35,845
Goodwill impairment......................               --           (73,080)          (73,080)
Translation adjustments..................             1,524              294             1,818
                                              -------------    -------------     -------------
Balance as of September 30, 2002.........     $     623,713    $         --      $     623,713
                                              =============    =============     =============
</TABLE>

6.    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


                                       9
<PAGE>
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.

        During 2001, the semiconductor industry declined an unprecedented 32%,
which impacted the utilization rates of our packaging and test assets. During
the second quarter of 2002, total packaging and test revenues grew over 21% as
compared to the first quarter of 2002. We experienced significant recovery in
most of our company's packaging services. However, our test services assets and
several packaging services assets:

      -     did not contribute significantly to the growth experienced during
            the second quarter of 2002,

      -     remained at low utilization rates relative to our projections and

      -     were no longer expected to reach previously anticipated utilization
            levels.

     In addition, as of June 30, 2002, we experienced a 72% decline in our
market capitalization as compared to March 31, 2002. These events triggered an
impairment review in accordance with SFAS No. 144. This review included a
company-wide evaluation of underutilized assets and a detailed update of our
operating and cash flow projections.

     Based on our company-wide evaluation of underutilized assets, we identified
$19.8 million of test and packaging 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.
As of September 30, 2003, we disposed of $15.8 million of these assets.

     Upon the completion of the process to identify the packaging and test net
assets to be disposed, we reviewed our assets to be held and used for
impairment. Based on the June 30, 2002 operating and cash flow projections, we
determined that the carrying value of our test services assets and several
packaging services assets being held and used, including intangible assets that
we are amortizing, exceeded the anticipated cash flows attributable to those
assets. We grouped our long-lived assets with other assets and liabilities at
the lowest level for which identifiable cash flows were largely independent of
the cash flows of other assets and liabilities. For our company, the lowest
level of identifiable cash flows is at the test reporting unit level and for our
packaging services reporting unit at the package type level.

     Our test reporting unit and the outsourced integrated circuit test services
industry were adversely impacted by excess capacity at the large integrated
device manufacturers. We expected that when the semiconductor industry
recovered, the integrated device manufacturers' demand for outsourced test
services would also recover. However, that anticipated recovery failed to
materialize in connection with the initial recovery we noted in the
semiconductor industry during the first half of 2002 due to continued excess
test capacity held by the large integrated device manufacturers. We expected, at
the time, that the demand for our test services on our existing technology
platforms would no longer return to the previously anticipated rates. Several of
our package types based on more mature technologies and processes, including
older leadframe and laminate package types, were adversely impacted by a
technology shift to matrix and high density leadframes and the movement from
multi-layer laminate substrates to tape and chip arrays and stacked-die
packages. We expected that when the semiconductor industry recovered there would
still be sufficient demand for these more mature products. However, that
anticipated recovery failed to materialize in connection with the initial
recovery we noted in the semiconductor industry during the first half of 2002
due to these technology shifts and the related significant excess capacity in
the industry. We expected, at the time, that the demand for these package types
would no longer return to the previously anticipated rates. Additionally, we
experienced insufficient demand related to select investments in advanced
package technologies principally as a result of alternative advanced package
technologies which became industry standard.

     As of June 30, 2002, we recognized a $171.6 million impairment charge to
reduce the carrying value of test and packaging assets to be held and used to
their fair value. The components of the charge were as follows:


                                       10

<PAGE>

<TABLE>
<CAPTION>
                                                           CARRYING     FAIR    IMPAIRMENT
                                                            VALUE      VALUE      CHARGE
                                                           --------   --------  ----------
                                                                   (IN THOUSANDS)
<S>                                                        <C>        <C>        <C>
Test assets:
  Property, plant and equipment and acquired intangibles   $ 95,400   $ 21,900   $ 73,500

Packaging assets:
  Property, plant and equipment ........................    157,700     59,600     98,100
                                                           --------   --------   --------
                                                           $253,100   $ 81,500   $171,600
                                                           ========   ========   ========
</TABLE>

      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.

7.    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 were
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 was 1.7 billion Japanese yen. In April 2003, we made a payment
of 300.0 million Japanese yen, or $2.5 million based on the exchange rate on the
date of the payment. We are withholding payment of 1.4 billion yen ($12.6
million based on the spot exchange rate at September 30, 2003) of this amount
pending resolution of a controversy relating to the patents acquired in
connection with the acquisition. 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 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 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, Taiwan Semiconductor
Technology Corporation ("TSTC") and Sampo Semiconductor Corporation ("SSC") in
Taiwan. 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.

      In January 2001, Amkor Iwate Corporation commenced operations and acquired
from Toshiba a packaging and test facility located in the Iwate prefecture in
Japan. We currently own 60% of Amkor Iwate and Toshiba owns the balance of the
outstanding shares. In January 2004 we are required to purchase the remaining
40% ownership interest 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 ($9.0 million to $35.9 million based on the spot
exchange rate at September 30, 2003). 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 January 2006.

8.    OUR INVESTMENT IN ANAM SEMICONDUCTOR, INC. (ASI)

      At January 1, 2002, we owned 47.7 million shares, or 42%, of ASI voting
common stock. Accordingly, we accounted for this investment under the equity
method of accounting and evaluated our investments for impairment due to
declines in market value that were considered other than temporary. In the event
of a determination that a decline in market value was other than temporary, a
charge to earnings was recorded for the unrealized loss, and a new cost basis in
the investment was 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


                                       11
<PAGE>
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
market value.

      As part of our strategy to sell our investment in ASI and to divest our
wafer fabrication services business (see Note 3), 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 5,700 Korean won per share, the market value of ASI
            common stock as traded on the Korean Stock Exchange at the time we
            entered into the share sale agreement. We received $58.1 million in
            net cash proceeds and 42 billion Korean won (approximately $36.5
            million at a spot exchange rate as of September 30, 2003) 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."
            Associated with this transaction, we recorded a $1.8 million loss.
            Additionally, we divested one million shares of ASI common stock in
            connection with the payment of certain advisory fees related to this
            transaction. On September 30, 2003, we received 21 billion Korean
            won, or $18.3 million based on the spot exchange rate at September
            30, 2003, consisting of principal.

      -     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, the market value of the shares as
            publicly traded in Korea; (ii) we acquired the Precision Machine
            Division ("PMD") of Anam Instruments, a related party to Amkor, for
            $8 million, its fair value; 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. On September 17, 2003, we sold our
            entire ownership interest in Acqutek (see Note 12). PMD supplies
            sophisticated die mold systems and tooling to the semiconductor
            industry and historically over 90% of its sales were to Amkor. We
            determined the fair value of PMD based on projected cash flows
            discounted at a rate commensurate with the risk involved. At the
            time of our acquisition of PMD, Anam Instruments was owned 20% by
            ASI and 20% by a family member of James Kim.

      -     On February 28, 2003, we sold our wafer fabrication services
            business to ASI for total consideration of $62.0 million (see Note
            3). We negotiated the fair value of our wafer fabrication services
            business with ASI and Dongbu. The parties calculated fair value
            based on an assessment of projected cash flows discounted at a rate
            commensurate with the risk involved. 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.

      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. It is likely that we would not have
entered into the Acqutek or PMD transactions absent the share sale to Dongbu and
the sale of the wafer fabrication services business to ASI. Had these
transactions not been interrelated, we may have utilized a different negotiation
strategy for the investment in Acqutek and the acquisition of PMD, which could
have resulted in us reaching a different conclusion of the fair value of both of
these transactions.

      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.

      Subsequent to the sale of a portion of our investment in ASI to Dongbu in
2002, we were unable to identify another strategic buyer. ASI's common stock,
which is listed on the Korean Stock Exchange, is relatively thinly traded and
subject to volatile swings in daily trading volumes. In an effort to continue to
monetize our investment in ASI's common stock, we evaluated, in consultation
with a financial institution, the most efficient method to divest a large block
of shares into the


                                       12
<PAGE>
market without destabilizing the share price of ASI's common stock. As of March
24, 2003, we consummated a series of transactions proposed by the financial
institution. We irrevocably sold a block of 7 million shares of ASI common stock
to the financial institution for 24.4 billion Korean won ($19.5 million based on
the spot exchange rate as of the transaction date, or $2.81 per share). We also
entered into a nondeliverable call option with the financial institution for
$6.8 million, the fair value of the option at that date plus the transaction
costs. For the three months ended March 31, 2003, we recorded a charge of $2.2
million to adjust for the value of the option as a result of ASI's share price
declining from 3,511 Korean won per share, or $2.81 per share, at March 24, 2003
to 3,150 Korean won at March 31, 2003. In May 2003, we exercised the
nondeliverable call option realizing $5.6 million of cash proceeds, and for the
three months ended June 30, 2003 we recorded a gain of $1.0 million related to
the excess amount of the exercise proceeds above the nondeliverable call
option's book value.

      On September 17, 2003, we sold an additional 5 million shares of ASI
common stock to the same financial institution for 21.8 billion Korean won
($18.5 million based on the spot exchange rate as of the transaction date, or
$3.69 per share) and recorded an associated gain of $4.7 million during the
three months ended September 30, 2003. We also entered into a nondeliverable
call option with the financial institution for $6.5 million, the fair value of
the option at that date plus the transaction costs. The call option is scheduled
to expire June 2004 and is indexed to ASI's share price with a strike price of
$2.62 per share, or approximately 70% of the then market value of ASI's common
stock. The value of the option declined $4.4 million as of September 30, 2003 as
a result of ASI's share price declining from 4,305 Korean won per share (or
$3.69 per share based on the spot exchange rate at September 17, 2003) to 3,395
Korean won per share (or $2.95 per share based on the spot exchange rate at
September 30, 2003), and we recorded the loss of $4.4 million during the three
months ended September 30, 2003.

      The call options allowed us to continue to monetize our investment in ASI
at a fixed price with unlimited upside and limited downside economics. In
addition, it provided us with the economic benefits of selling shares through a
dollar averaging sales program without incurring the transaction costs
associated with multiple small quantity sales. The call premiums provided the
financial institution some downward protection if the market for ASI's common
stock destabilizes as it sold its investment in ASI's common stock into the
market. If ASI's share price declines below the exercise price of the call
option, then the net proceeds from the exercise of the September 17, 2003 option
could be less than the $6.5 million we paid for the call option. All ownership
rights and privileges associated with the 12 million shares of ASI's common
stock sold during 2003 were irrevocably transferred to the financial
institution. In no event could the financial institution put the shares back to
Amkor nor was there a provision in the agreements for Amkor to reacquire the
shares.

      As of September 30, 2003, we owned 14.7 million shares of ASI, or 12% 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.
<PAGE>
9.    INVENTORIES

      Inventories, net of reserves for excess and obsolete inventory of $19.7
million and $20.2 million at September 30, 2003 and December 31, 2002,
respectively, consist of raw materials and purchased components that are used in
the semiconductor packaging process.

<TABLE>
<CAPTION>
                                         SEPTEMBER 30,   DECEMBER 31,
                                             2003            2002
                                         -------------   -------------
                                                (IN THOUSANDS)
<S>                                      <C>             <C>
Raw materials and purchased components   $      73,646   $      61,806
Work-in-process.......................          14,634          10,315
                                         -------------   -------------
                                         $      88,280   $      72,121
                                         =============   =============
</TABLE>

10.   PROPERTY, PLANT AND EQUIPMENT

      Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
                                                    SEPTEMBER 30,   DECEMBER 31,
                                                        2003            2002
                                                    -------------   -------------
                                                           (IN THOUSANDS)
<S>                                                 <C>             <C>
Land ............................................   $     110,818   $      88,744
Buildings and improvements.......................         546,012         537,288
Machinery and equipment..........................       1,607,238       1,512,191
Furniture, fixtures and other equipment..........         127,558         121,727
Construction in progress.........................             990           1,707
                                                    -------------   -------------
                                                        2,392,616       2,261,657
Less -- Accumulated depreciation and amortization      (1,414,207)     (1,295,319)
                                                    -------------   -------------
                                                    $     978,409   $     966,338
                                                    =============   =============
</TABLE>

11.   ACQUIRED INTANGIBLES

      Acquired intangibles consist of the following:

<TABLE>
<CAPTION>
                                   SEPTEMBER 30,   DECEMBER 31,
                                       2003            2002
                                   -------------   -------------
                                          (IN THOUSANDS)
<S>                                <C>             <C>
Patents and technology rights...   $      62,587   $      61,994
Less -- Accumulated amortization         (23,083)        (16,961)
                                   -------------   -------------
                                   $      39,504   $      45,033
                                   =============   =============
</TABLE>

      Amortization expense was $2.0 million and $2.1 million for the three
months ended September 30, 2003 and 2002, respectively. Amortization expense was
$6.1 million and $5.3 million for the nine months ended September 30, 2003 and
2002, respectively. The estimated annual amortization expense for each of the
next five years ending on December 31 is $8.0 million. The weighted average
amortization period for the patents and technology rights is 8 years.

12.   INVESTMENTS

                                       14
<PAGE>
      Investments and noncurrent marketable securities are as follows:

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,   DECEMBER 31,
                                                                       2003            2002
                                                                 -------------   -------------
                                                                        (IN THOUSANDS)
<S>                                                              <C>             <C>
Marketable securities classified as available for sale:
   ASI (ownership of 12% and 21% at September 30, 2003
    and December 31, 2002, respectively) (see Note 8).........   $      43,414   $      77,450
  Other marketable securities classified as available for sale           3,867           4,590
                                                                 -------------   -------------
    Total marketable securities...............................          47,281          82,040
Equity investments (20% - 50% owned)..........................              --           1,195
                                                                 -------------   -------------
                                                                 $      47,281   $      83,235
                                                                 =============   =============
</TABLE>

      Our investment in ASI is classified as available for sale in the table
above. ASI was previously accounted for as an equity investment through March
24, 2003 (see Note 8).

      Included in other marketable securities classified as available for sale
at December 31, 2002 was our investment in Acqutek. Acqutek is publicly traded
on the Korean Stock Exchange. On September 17, 2003, our investment in Acqutek
was sold at a loss of $0.3 million. We previously recorded, during the second
quarter of 2003, a $0.9 million charge to earnings to reflect the decline in
market value of Acqutek, which was considered to be other than temporary. Total
purchases from Acqutek included in cost of revenue for the three months ended
September 30, 2003 and 2002 were $4.8 million and $6.0 million, respectively.
Total purchases from Acqutek included in cost of revenue for the nine months
ended September 30, 2003 and 2002 were $11.5 million and $12.5 million,
respectively, which we believe were conducted on an arms-length basis in the
ordinary course of business.

      Equity investment losses (gains), as recorded in our consolidated
statements of income, are comprised of the following:

<TABLE>
<CAPTION>
                                          FOR THE THREE     FOR THE NINE MONTHS ENDED
                                          MONTHS ENDED             SEPTEMBER 30,
                                          SEPTEMBER 30,   -----------------------------
                                               2002            2003             2002
                                          -------------   -------------   -------------
                                           (UNAUDITED)             (UNAUDITED)
<S>                                       <C>             <C>             <C>
Equity in loss of investees............   $     (12,532)  $      (3,555)  $     (24,737)
Loss on impairment of equity investment             --              --         (139,536)
Loss on equity investment..............          (1,767)            --           (1,767)
                                          -------------   -------------   -------------
                                          $     (14,299)  $      (3,555)  $    (166,040)
                                          =============   =============   =============
</TABLE>

13.   ACCRUED EXPENSES

      Accrued expenses consist of the following:

<TABLE>
<CAPTION>
                                                          SEPTEMBER 30,   DECEMBER 31,
                                                              2003            2002
                                                          -------------   -------------
                                                                 (IN THOUSANDS)
<S>                                                       <C>             <C>
Accrued payroll........................................   $      39,169   $      29,295
Accrued income taxes...................................          32,709          48,787
Accrued interest.......................................          32,537          32,690
Other accrued expenses.................................          61,694          73,451
                                                          -------------   -------------
                                                          $     166,109   $     184,223
                                                          =============   =============
</TABLE>


                                       15
<PAGE>
14.   RESTRUCTURING RESERVES

      During the second, third and fourth quarters of 2002, we recorded $4.8
million, $13.8 million and $10.0 million, respectively, 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 2002 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 completed 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, $4.5
million and $6.1 million remained outstanding as of September 30, 2003 and
December 31, 2002, respectively, and is reflected in accrued expenses. The
outstanding liability is principally future lease payments of which $2.4 million
is expected be paid during the remainder of 2003. The remaining lease payments
are expected to be paid through 2007 unless the leases can be terminated
earlier. During the nine months ended September 30, 2003, the restructuring
reserve was reduced by $1.6 million for cash expenditures.

15.   DEBT

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

<TABLE>
<CAPTION>
                                                                                   SEPTEMBER 30,   DECEMBER 31,
                                                                                       2003            2002
                                                                                   -------------   -------------
                                                                                             (IN THOUSANDS)
<S>                                                                                <C>             <C>
New senior secured credit facilities:
    Term loan, LIBOR plus 4% due January 2006...................................   $     169,150   $          --
    $30.0 million revolving line of credit, LIBOR plus 4.25% due October 2005...              --              --
Old senior credit facilities:
    Term B loans, LIBOR plus 4% due September 2005..............................              --          97,118
    $100.0 million revolving line of credit, LIBOR plus 3.75% due March 2005....              --              --
9.25% Senior notes due May 2006.................................................              --         425,000
9.25% Senior notes due February 2008............................................         470,500         500,000
7.75% Senior notes due May 2013.................................................         425,000              --
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......................................................................          66,605          77,845
                                                                                   -------------   -------------
                                                                                       1,840,005       1,808,713
Less -- Short-term borrowings and current portion of long-term debt                      (54,240)        (71,023)
                                                                                   -------------   -------------
                                                                                   $   1,785,765   $   1,737,690
                                                                                   =============   =============
</TABLE>

      Interest expense related to short-term borrowings and long term debt is
presented net of interest income of $1.3 million and $1.0 million for the three
months ended September 30, 2003 and 2002, respectively, in the accompanying
consolidated statements of income. Interest expense related to short-term
borrowings and long-term debt is presented net of interest income of $5.0
million and $2.9 million for the nine months ended September 30, 2003 and 2002,
respectively, in the accompanying consolidated statements of income.

      On April 22, 2003, we entered into a new $200.0 million senior secured
credit facility consisting of a $170.0 million term loan maturing January 31,
2006 and a $30.0 million revolving line of credit that is available through
October 31, 2005.


                                       16
<PAGE>
The term loan bears interest at LIBOR plus 4.00% and the revolving line of
credit bears interest at LIBOR plus 4.25%. The term loan principal repayments
are due $1.3 million, $1.7 million, $125.4 million and $41.6 million in 2003,
2004, 2005 and 2006, respectively. In addition, the term loan includes certain
financial covenants including minimum EBITDA, as defined by the credit facility,
minimum daily liquidity and maximum annual capital expenditures. This new credit
facility replaces the existing $196.9 million secured credit facility, which
included a $96.9 million term loan and a $100.0 million revolving credit
facility that were scheduled to mature September 30, 2005 and March 31, 2005,
respectively. The funds available under this new credit facility were used to
repay the $96.9 million term loan outstanding under the existing credit facility
and for general corporate purposes. In connection with the redemption of our
term loan, we recorded a charge of $2.4 million during the second quarter of
2003 for the associated unamortized deferred debt issuance costs.

      In May 2003, we sold $425.0 million of 7.75% senior notes due May 2013. We
sold these notes to qualified institutional investors and used the net proceeds
of the issuance to redeem our outstanding 9.25% senior notes due 2006. The notes
have a coupon rate of 7.75 % annually and interest payments are due
semi-annually. In connection with the redemption, we recorded charges during the
second quarter of 2003 of $19.7 million related to the premium paid to redeem
these notes, $6.0 million for the associated unamortized deferred debt issuance
costs and $2.5 million of other costs.

      In connection with the May 2003 offering of the $425 million senior notes
due 2013 ("original notes"), we entered into a registration rights agreement
with the initial purchasers of the original notes in which we agreed to use
commercially reasonable efforts to commence an exchange offer for the original
notes within 210 days of their issuance. In the exchange offer, the original
note holders are entitled to exchange their original notes for exchange notes
("exchange notes"), with substantially identical terms as the original notes.
The terms of the exchange notes are identical in all material respects to those
of the original notes except the exchange notes will not be subject to transfer
restrictions and holders of the exchange notes, with limited exceptions, will
have no registration rights. We will issue registered exchange notes on or
promptly after the expiration of the exchange offer. In July 2003, we filed a
Form S-4 Registration Statement with the Securities and Exchange Commission to
effect this exchange offer which became effective October 22, 2003.

      During 2003, we received board of director approval to purchase up to
$150.0 million of the 9.25% senior notes due 2008, and we have been purchasing
these notes in the open market. As of September 30, 2003, we purchased $29.5
million of the 9.25% senior notes due 2008 for which we recognized a loss on
this retirement of debt of $1.6 million and a charge of $0.4 million for the
associated unamortized deferred debt issuance costs during the three and nine
months ended September 30, 2003.

      Other debt as of September 30, 2003 and 2002 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 September 30, 2003, the foreign
debt had interest rates ranging from 1.0% to 4.35%. These debt instruments do
not include significant financial covenants.

16.   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 three months ended September 30,
2003, we included approximately 4.8 million shares outstanding in the
computation of diluted earnings per share. For the nine months ended September
30, 2003 and the three months and nine months ended 2002, we excluded from the
computation of diluted earnings per share potentially dilutive securities which
would have an antidilutive effect on EPS. As of September 30, 2003, the total
number of potentially dilutive securities outstanding was 16.2 million, 11.7
million and 3.9 million for outstanding options, convertible notes and warrants
for common stock, respectively. As of September 30, 2002, the total number of
potentially dilutive securities outstanding was 14.8 million, 11.7 million and
3.9 million for outstanding options, convertible notes and warrants for common
stock, respectively.

      For the three months ended September 30, 2003, basic and diluted EPS was
calculated as follows:

                                       17
<PAGE>
<TABLE>
<CAPTION>
                                                       WEIGHTED
                                       EARNINGS       AVG. SHARES     PER SHARE
                                     (NUMERATOR)     (DENOMINATOR)      AMOUNT
                                    --------------   --------------   ----------
                                    (IN THOUSANDS)   (IN THOUSANDS)
<S>                                 <C>              <C>              <C>
Earnings Per Share - Three Months
   Ended September 30, 2003
      Basic earnings per share...   $       15,770          166,628   $     0.09
      Dilutive effect of options.               --            4,812           --
                                    --------------   --------------   ----------
      Dilutive earnings per share   $       15,570          171,440   $     0.09
                                    ==============   ==============   ==========
</TABLE>

17.   COMMITMENTS AND CONTINGENCIES

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 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
indemnities are indemnified, to the fullest extent permitted by law, against
related expenses, judgments, fines and any amounts paid in settlement. We also
maintain Directors and Officers insurance coverage in order to mitigate our
exposure to these indemnification obligations. The maximum amount of future
payments is generally unlimited. There is no amount recorded for this
indemnification at September 30, 2003. Due to the nature of 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, in
1998 we indemnified and agreed to hold harmless James Kim, our Chairman and
Chief Executive Officer, and members of his family, against any U.S. federal or
state income tax liability resulting from such persons 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 September 30, 2003 is
$3.0 million. While it is reasonably possible that future payments may exceed
amounts accrued, we recorded a net tax benefit during the three months ended
September 30, 2003 of $10.4 million to reduce our tax accruals based on related
tax periods no longer open. The maximum potential loss related to this
indemnification is $8.0 million. No assets are held as collateral and no
specific recourse provisions exist.

      As of September 30, 2003, we have outstanding $2.2 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.

      We generally provide a standard ninety-day warranty on our services. Our
warranty activity has historically been immaterial and is expected to continue
to be immaterial in the foreseeable future.

Litigation

     We currently are a party to various legal proceedings, including those
noted below. While we currently believe 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.

      Recently, we have become party to an increased number of litigation
matters, relative to historic levels. Much of the recent increase in litigation
relates to an allegedly defective epoxy mold compound formerly used in some of
our products. In 2002, we were served with a third party complaint in an action
between Fujitsu Limited and Cirrus Logic, Inc., in which Fujitsu alleged that
semiconductor devices it purchased from Cirrus Logic were 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. This case is
pending in the


                                       18
<PAGE>
U.S. District Court for the Northern District of California. The complaint, as
amended to date, alleges damages in excess of $100 million, although, as of this
date, Fujitsu has not indicated how it will substantiate this amount of damages.
Cirrus Logic filed a third party complaint against us alleging that any
liability for chip defects should be assigned to us because we assembled the
subject semiconductor devices. Upon receipt of the third party complaint, we
filed an answer denying all liability, and our own third party complaint against
Sumitomo Bakelite Co., Ltd., the Japanese manufacturer of the allegedly
defective epoxy mold compound. In conjunction with this matter, Fujitsu has
recently filed a direct claim against us for damages. In response, we filed an
answer to the complaint denying all liability to Fujitsu. More recently, we have
been drawn into four additional actions related to this epoxy mold compound. In
March 2003, we were served with a cross-complaint in an action between Seagate
Technology and Atmel Corporation. Atmel's complaint seeks indemnification from
us for any damages incurred from the claims by Seagate Technology. We have
answered Atmel's cross-complaint, denying all liability, and have filed a
cross-complaint against Sumitomo Bakelite Co., Ltd., the manufacturer of the
allegedly defective mold compound. No trial date has been set in this case,
which is pending in the Superior Court of California, Santa Clara County. In
April 2003, we were served with a cross-complaint in an action between Maxtor
Corporation and Koninklijke Philips Electronics ("Philips"). Philips' complaint
seeks indemnification from us for any damages incurred from the claims by Maxtor
Corporation. Philips subsequently filed a cross-complaint directly against
Sumitomo Bakelite Co., Ltd., alleging, among other things, that Sumitomo
Bakelite Co., Ltd. breached its contractual obligations to both us and Philips
by supplying a defective mold compound resulting in the failure of certain
Philips semiconductor devices. We have denied all liability in this matter and
have also asserted a cross-complaint against Sumitomo Bakelite Co., Ltd. A trial
date has been set for April 2004 and this case is pending in the Superior Court
of California, Santa Clara County. In August 2003 and September 2003, we were
served with complaints filed by Maxim Integrated Products Inc., and Fairchild
Semiconductor Corporation, respectively. Both parties are seeking damages
related to our use of Sumitomo Bakelite Co., Ltd.'s epoxy mold compound in
assembling their semiconductor packages. These cases are pending in the Superior
Court of California, Santa Clara County. On September 5, 2003, we filed a
pleading to have the Maxim case dismissed and are awaiting a hearing on that
action. On October 31, 2003, we filed a pleading to have the Fairchild case
dismissed and are awaiting a hearing on that action. If our motions against
Fairchild and Maxim are not granted, we expect to fully deny all liability and
to file cross-claims against Sumitomo Bakelite Co., Ltd.

      In the case of each of these matters, all of which are at an early stage,
we believe we have meritorious defenses and valid third party claims against
Sumitomo Bakelite Co., Ltd., should the epoxy mold compound be found to be
defective. However, we cannot be certain that we will be able to recover any
amount from Sumitomo Bakelite Co., Ltd. if we are held liable in these matters,
or that any adverse result would not have a material impact upon us. Moreover,
other customers of ours have made inquiries about the epoxy mold compound, which
was widely used in the semiconductor industry, and no assurance can be given
that claims similar to these will not be made against us by other customers in
the future.

      On August 16, 2002, we 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 was 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 (the
"Immunity Agreement") dated June 30, 1993 between Amkor and Motorola.

      We and Motorola resolved the controversy with respect to all issues
relating to the Immunity Agreement, and all claims and counterclaims filed by
the parties in the case relating to the Immunity Agreement were dismissed or
otherwise disposed of without further litigation. The claims relating to the
License Agreement and the '133 and '278 Patents remained pending.

      We and Motorola both filed motions for summary judgment on the remaining
claims, and oral arguments were heard on September 3, 2003. On October 6, 2003,
the Superior Court of Delaware ruled in favor of Amkor and issued an Opinion and
Order granting Amkor's motion for summary judgment and denying Motorola's motion
for summary judgment. On October 22, 2003 Motorola filed an appeal in the
Supreme Court of Delaware. We believe we will prevail on the same merits in such
appeal. In addition, should Motorola prevail at the appellate level, we believe
we have 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.

                                       19
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

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

      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 and (4)
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 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 and nine months ended
September 30, 2003 and 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 quarterly report as
well as other reports we file with the Securities and Exchange Commission.

COMPANY OVERVIEW

      Amkor is one of 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 electronic systems used in communications, computing,
consumer, industrial, automotive and military applications. Our customers
include, among others, Atmel Corporation, Intel Corporation, LSI Logic
Corporation, Mediatek Inc., Philips Electronics N.V., R.F. Microdevices, ST
Microelectronics PTE, Sony Semiconductor Corporation, Toshiba Corporation and
Xilinx, Inc. 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. We reflect our wafer fabrication services segment as a
discontinued operation and have restated our historical results.

                                       20
<PAGE>

OUR EXPECTATIONS REGARDING FUTURE BUSINESS CONDITIONS

      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.

      Increased outsourcing of packaging and test services in the semiconductor
industry has been the primary factor for our historical growth in revenues. We
expect this trend to continue into the foreseeable future as we believe
technological advances are driving our customers to outsource more of their
packaging requirements.

      We currently expect packaging and test revenue for the fourth quarter of
2003 to be around 5% to 8% higher than packaging and test revenues for the third
quarter of 2003. We expect that fourth quarter of 2003 gross margin will be
around 25%. 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
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. In
addition, beginning in the second quarter of 2003, we began to experience
increases in substrate material costs as a result of supply shortages. Substrate
material costs have stabilized at the higher price levels set during the second
quarter of 2003. We have significantly enhanced our supply base and do not
foresee substrate material availability as an ongoing issue. However, supply
shortages may again occur in the future and in such an event, gross margins
could be negatively impacted. Excluding the impact of our acquisition in Japan,
average selling prices for 2002 declined 16% as compared to average selling
prices in 2001. This decline in average selling prices significantly impacted
our gross margins in 2002. Average selling prices have declined 3.0% during the
first nine months of 2003 and, accordingly, the related impact to our revenues
and gross margins has diminished in comparison to 2002.

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


                                       21
<PAGE>
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.

      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 5,700 Korean won per share, the market value of ASI
            common stock as traded on the Korean Stock Exchange at the time we
            entered into the share sale agreement. We received $58.1 million in
            net cash proceeds and 42 billion Korean won (approximately $36.5
            million at a spot exchange rate as of September 30, 2003) 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."
            Associated with this transaction, we recorded a $1.8 million loss.
            Additionally, we divested one million shares of ASI common stock in
            connection with the payment of certain advisory fees related to this
            transaction. On September 30, 2003, we received 21 billion Korean
            won, or $18.3 million based on the spot exchange rate at September
            30, 2003, consisting of principal.
      -     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, the market value of the shares as
            publicly traded in Korea; (ii) we acquired the Precision Machine
            Division ("PMD") of Anam Instruments, a related party to Amkor, for
            $8 million, its fair value; 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. On September 17, 2003, we sold our
            entire ownership interest in Acqutek. PMD supplies sophisticated die
            mold systems and tooling to the semiconductor industry and
            historically over 90% of its sales were to Amkor. We determined the
            fair value of PMD based on projected cash flows discounted at a rate
            commensurate with the risk involved. At the time of our acquisition
            of PMD, Anam Instruments was owned 20% by ASI and 20% by a family
            member of James Kim.
      -     On February 28, 2003, we sold our wafer fabrication services
            business to ASI for total consideration of $62.0 million. We
            negotiated the fair value of our wafer fabrication services business
            with ASI and Dongbu. The parties calculated fair value based on an
            assessment of projected cash flows discounted at a rate commensurate
            with the risk involved. 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.

      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. It is likely that we would not have
entered into the Acqutek or PMD transactions absent the share sale to Dongbu and
the sale of the wafer fabrication services business to ASI. Had these
transactions not been interrelated, we may have utilized a different negotiation
strategy for the investment in Acqutek and the acquisition of PMD, which could
have resulted in us reaching a different conclusion of the fair value of both of
these transactions.

      Due to the protracted downturn in the semiconductor industry, we made the
decision to sell our wafer fabrication services business in order to redeploy
the proceeds from that sale into our primary business of semiconductor assembly
and test. This decision was further supported by the fact that we had no
assurances that ASI would have the financial resources and capability to provide
the next generation of technology to serve our customer needs. The opportunity
to divest ourselves of the business arose in connection with our sale of the ASI
shares to Dongbu. As part of that transaction, it was agreed that Dongbu and we
would enter into negotiations, upon completion of the share sale, to determine
the terms and conditions on which we would sell the business to ASI. The sale
was completed on February 28, 2003, thereby completing another step towards our
stated goal of monetizing all of our interests in ASI. As of that date, we
reduced our ownership interest in ASI from 42% to 16%. As of September 30, 2003,
we own 12% of ASI.

      In consideration of the transactions discussed above, we reflect our wafer
fabrication services segment as a discontinued


                                       22
<PAGE>
operation and have restated our historical results. In connection with the
disposition of our wafer fabrication business, during the first quarter of 2003
we reflected $1.0 million in severance and other exit costs to close our wafer
fabrication services operations in Boise, Idaho and Lyon, France. Also in the
first quarter of 2003, we recognized a pre-tax gain on the disposition of our
wafer fabrication services business of $58.6 million ($51.5 million, net of
tax), which is reflected in income from discontinued operations. The carrying
value of the sold net assets associated with the business as of February 28,
2003 was $2.4 million.

      Subsequent to the sale of a portion of our investment in ASI to Dongbu in
2002, we were unable to identify another strategic buyer. ASI's common stock,
which is listed on the Korean Stock Exchange, is relatively thinly traded and
subject to volatile swings in daily trading volumes. In an effort to continue to
monetize our investment in ASI's common stock, we evaluated, in consultation
with a financial institution, the most efficient method to divest a large block
of shares into the market without destabilizing the share price of ASI's common
stock. As of March 24, 2003, we consummated a series of transactions proposed by
the financial institution. We irrevocably sold a block of 7 million shares of
ASI common stock to the financial institution for 24.4 billion Korean won ($19.5
million based on the spot exchange rate as of the transaction date, or $2.81 per
share). We also entered into a nondeliverable call option with the financial
institution for $6.8 million, the fair value of the option at that date plus the
transaction costs. For the three months ended March 31, 2003, we recorded a
charge of $2.2 million to adjust for the value of the option as a result of
ASI's share price declining from 3,511 Korean won per share, or $2.81 per share,
at March 24, 2003 to 3,150 Korean won at March 31, 2003. In May 2003, we
exercised the nondeliverable call option realizing $5.6 million of cash
proceeds, and for the three months ended June 30, 2003 we recorded a gain of
$1.0 million related to the excess amount of the exercise proceeds above the
nondeliverable call option's book value.

      On September 17, 2003, we sold an additional 5 million shares of ASI
common stock to the same financial institution for 21.8 billion Korean won
($18.5 million based on the spot exchange rate as of the transaction date, or
$3.69 per share) and recorded an associated gain of $4.7 million during the
three months ended September 30, 2003. We also entered into a nondeliverable
call option with the financial institution for $6.5 million, the fair value of
the option at that date plus the transaction costs. The call option is scheduled
to expire June 2004 and is indexed to ASI's share price with a strike price of
$2.62 per share, or approximately 70% of the then market value of ASI's common
stock. The value of the option declined $4.4 million as of September 30, 2003 as
a result of ASI's share price declining from 4,305 Korean won per share (or
$3.69 per share based on the spot exchange rate at September 17, 2003) to 3,395
Korean won per share (or $2.95 per share based on the spot exchange rate at
September 30, 2003), and we recorded the loss of $4.4 million during the three
months ended September 30, 2003.

      The call options allowed us to continue to monetize our investment in ASI
at a fixed price with unlimited upside and limited downside economics. In
addition, it provided us with the economic benefits of selling shares through a
dollar averaging sales program without incurring the transaction costs
associated with multiple small quantity sales. The call premiums provided the
financial institution some downward protection if the market for ASI's common
stock destabilizes as it sold its investment in ASI's common stock into the
market. If ASI's share price declines below the exercise price of the call
option, then the net proceeds from the exercise of the September 17, 2003 option
could be less than the $6.5 million we paid for the call option. All ownership
rights and privileges associated with the 12 million shares of ASI's common
stock sold during 2003 were irrevocably transferred to the financial
institution. In no event could the financial institution put the shares back to
Amkor nor was there a provision in the agreements for Amkor to reacquire the
shares.

      As of September 30, 2003, we owned 14.7 million shares of ASI, or 12% 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.

      In connection with the 2002 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. 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.
On September 17, 2003, our investment in Acqutek was sold at a loss of
$0.3 million. We previously recorded, during the second quarter of 2003,
a $0.9 million charge to earnings to reflect the decline in market value of
Acqutek, which was considerd to be other than temporary. Total purchases from
Aqutek included in cost of revenue for the three months ended
September 30, 2003 and 2002 were $4.8 million and $6.0 million, respectively.
Total purchases from Acqutek included in cost of revenue for the nine months
ended September 30, 2003 and 2002 were $11.5 million and $12.5 million,
respectively, which we believe were conducted on an arms-length basis
in the ordinary course of business.

Special Charges


                                       23
<PAGE>
      During the second and third quarter of 2002, we recorded $282.0 million of
special charges. Special charges were comprised of:

<TABLE>
<CAPTION>
                                              THREE           NINE
                                          MONTHS ENDED    MONTHS ENDED
                                          SEPTEMBER 30,  SEPTEMBER 30,
                                              2002             2002
                                          ------------   -------------
                                                (IN THOUSANDS)
<S>                                       <C>            <C>
Impairment of long-lived assets            $     --        $190,266
Impairment of goodwill                           --          73,080
Lease termination and other exit costs       13,819          18,639
                                           --------        --------
                                           $ 13,819        $281,985
                                           ========        ========
</TABLE>

      During 2001, the semiconductor industry declined an unprecedented 32%,
which impacted the utilization rates of our packaging and test assets. During
the second quarter of 2002, total packaging and test revenues grew over 21% as
compared to the first quarter of 2002. We experienced significant recovery in
most of our company's packaging services. However, our test services assets and
several packaging services assets:

      -     did not contribute significantly to the growth experienced during
            the second quarter of 2002,

      -     remained at low utilization rates relative to our projections and

      -     were no longer expected to reach previously anticipated utilization
            levels.

      In addition, as of June 30, 2002, we experienced a 72% decline in our
market capitalization as compared to March 31, 2002. These events triggered an
impairment review in accordance with SFAS No. 144. This review included a
company-wide evaluation of underutilized assets and a detailed update of our
operating and cash flow projections.

      Based on our company-wide evaluation of underutilized assets, we
identified $19.8 million of test and packaging 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. As of September 30, 2003, we disposed of $15.8 million of these
assets.

      Upon the completion of the process to identify the packaging and test net
assets to be disposed, we reviewed our assets to be held and used for
impairment. Based on the June 30, 2002 operating and cash flow projections, we
determined that the carrying value of our test services assets and several
packaging services assets being held and used, including intangible assets that
we are amortizing, exceeded the anticipated cash flows attributable to those
assets. We grouped our long-lived assets with other assets and liabilities at
the lowest level for which identifiable cash flows were largely independent of
the cash flows of other assets and liabilities. For our company, the lowest
level of identifiable cash flows is at the test reporting unit level and for our
packaging services reporting unit at the package type level.

      Our test reporting unit and the outsourced integrated circuit test
services industry were adversely impacted by excess capacity at the large
integrated device manufacturers. We expected that when the semiconductor
industry recovered the integrated device manufactures' demand for outsourced
test services would also recover. However, that anticipated recovery failed to
materialize in connection with the initial recovery we noted in the
semiconductor industry during the first half of 2002 due to continued excess
test capacity held by the large integrated device manufacturers. We no longer
expect that the demand for our test services on our existing technology
platforms will return to the previously anticipated rates. Several of our
package types based on more mature technologies and processes, including older
leadframe and laminate package types, were adversely impacted by a technology
shift to matrix and high density leadframes and the movement from multi-layer
laminate substrates to tape and chip arrays and stacked-die packages. We
expected that when the semiconductor industry recovered there would still be
sufficient demand for these more mature products. However, that anticipated
recovery failed to materialize in connection with the initial recovery we noted
in the semiconductor industry during the first half of 2002 due to these
technology shifts and the related significant excess capacity in the industry.
We no longer expect that the demand for these package types will return to the
previously anticipated rates. Additionally, we experienced insufficient demand
related


                                       24
<PAGE>
to select investments in advanced package technologies principally as a result
of alternative advanced package technologies which became industry standard.

      As of June 30, 2002, we recognized a $171.6 million impairment charge to
reduce the carrying value of test and packaging assets to be held and used to
their fair value. The components of the this charge were as follows:

<TABLE>
<CAPTION>
                                                                 CARRYING      FAIR      IMPAIRMENT
                                                                  VALUE        VALUE        CHARGE
                                                                  -----        -----        ------
                                                                           (IN THOUSANDS)
<S>                                                             <C>          <C>           <C>
Test assets:
     Property, plant and equipment and acquired intangibles     $ 95,400     $ 21,900      $73,500

Packaging assets:
     Property, plant and equipment                               157,700       59,600       98,100
                                                                --------     --------     --------
                                                                $253,100     $ 81,500     $171,600
                                                                ========     ========     ========
</TABLE>

      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.
We estimated that depreciation expense would be reduced by approximately $77
million during the twelve month period following the second quarter of 2002. The
impact to depreciation expense diminishes quarterly as these assets reach the
end of their respective useful lives.

      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 when a significant adverse change in the business climate occurs and
when long-lived assets are tested for recoverability. 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. During the second quarter of 2003,
we performed our annual review of goodwill for impairment. Based on our review,
we concluded that goodwill, as of June 30, 2003, was not impaired.

      During the second quarter of 2002, we consolidated some of our U.S. office
locations and closed our San Jose test facility. Test development is now
centralized in our primary test development center in Wichita, Kansas. These
activities were designed to reduce expenses and enhance operational
efficiencies. In connection with these activities we recognized $4.8 million in
lease cancellation costs and other facility exit expenses during the second
quarter of 2002.

      During the third quarter of 2002, we recorded $13.8 million of special
charges principally related to the consolidation of our operations in Taiwan.
The charge was comprised of $10.8 million to write-off leasehold improvements
and other long-lived assets and $3.0 million for lease termination and other
exit costs.

Change in 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 2002 impairment charge based on our expected
use of that equipment and the associated cash flows. This change reduced
depreciation expense by approximately $17 million in the fourth quarter of 2002.
This change reduced depreciation expense by approximately $15 million and $46
million, respectively, for the three and nine months ended September 30, 2003.
Our decision to change the estimated useful lives of such packaging equipment
was based on the following:

-     historical experience;

-     expected future cash flows;


                                       25
<PAGE>
-     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.

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 were
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 was 1.7 billion Japanese yen. In April 2003, we made a payment
of 300.0 million Japanese yen, or $2.5 million based on the exchange rate on the
date of the payment. We are withholding payment of 1.4 billion yen ($12.6
million based on the spot exchange rate at September 30, 2003) of this amount
pending resolution of a controversy relating to the patents acquired in
connection with the acquisition. 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.

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. In January 2004 we are required to
purchase the remaining 40% ownership interest 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 ($9.0 million to $35.9 million based on the
spot exchange rate at September 30, 2003). We currently estimate the cash
payments for the remaining 40% ownership interest will range from $10 million to
$15 million. This amount includes a payment of $2.0 million to terminate our
commitment to purchase a tract of land adjacent to the Amkor Iwate facility.
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.

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. 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.


                                       26
<PAGE>
RESULTS OF CONTINUING OPERATIONS

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

<TABLE>
<CAPTION>
                                             FOR THE THREE MONTHS ENDED    FOR THE NINE MONTHS ENDED
                                                   SEPTEMBER 30,                SEPTEMBER 30,
                                                ---------------------       ---------------------
                                                   2003        2002            2003        2002
                                                ---------     -------       ---------    ---------
                                                    (UNAUDITED)                  (UNAUDITED)
<S>                                             <C>          <C>            <C>          <C>
Net revenues                                     100.0%      100.0%           100.0%       100.0%
Gross profit                                      23.9        12.1             19.4          3.3
Operating income (loss)                           11.2        (5.3)             5.7        (40.4)
Income (loss) before income taxes, equity
   investment losses, minority interest and
   discontinued operations                         2.5       (14.8)            (6.6)       (51.4)
Income (loss) from continuing operations           3.7       (15.6)            (6.6)       (61.7)
</TABLE>

Three Months Ended September 30, 2003 Compared to Three Months Ended September
30, 2002

      Net Revenues. Packaging and test net revenues increased 7.7% to $423.8
million in the three months ended September 30, 2003 from $393.6 million in the
three months ended September 30, 2002.

      The increase in packaging and test net revenues for the three months ended
September 30, 2003, excluding the impact of our acquisitions in Japan, was
principally attributed to a 15.8% increase in overall unit volumes as compared
to the same period a year ago, partially offset by declines in average selling
prices. This overall unit volume increase was driven by a 19.4% increase in
advanced leadframe and laminate packages as a result of a broad-based increase
in demand, and an 11.1% increase in our traditional leadframe business. Our
Japanese joint venture, Amkor Iwate, provides packaging and test services
principally to Toshiba's Iwate factory under a long-term supply agreement on a
cost plus basis during the term of the joint venture. Accordingly, the revenues
associated with this facility fluctuate proportionately with its costs. The
revenues of Amkor Iwate for the three months ended September 30, 2003 increased
$0.1 million compared to the three months ended September 30, 2002.

      Gross Profit. Gross profit increased $53.9 million, to a gross profit of
$101.4 million in the three months ended September 30, 2003 from a gross profit
of $47.5 million in the three months ended September 30, 2002. 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 have a
significant effect on our gross margin.

      Gross margins, as a percentage of sales, increased to 23.9% in the three
months ended September 30, 2003 from 12.1% in the three months ended September
30, 2002. The improvement of 11.8% is principally a result of the following:

-     12.3% is attributable to increases in the gross margins in our factories
      in Korea and the Philippines due to a reduction of $23.3 million in
      depreciation costs, increased capacity utilization as a result of
      increased unit volumes and cost savings initiatives. Approximately $15.0
      million of the reduction in depreciation expense was the result of a
      change in the estimated useful lives of certain assembly equipment
      effective in the fourth quarter of 2002. The remaining decrease in
      depreciation costs is due to assets reaching fully depreciated status.

-     Material cost savings contributed approximately 2.9% to the increase in
      gross margins.

-     Our operations in Taiwan and China contributed approximately 2.3% to the
      increase in gross margin primarily attributable to increased capacity
      utilization as a result of increased unit volumes.

      The positive impacts on gross margins were partially offset by:

-     Average selling price erosion across our product lines caused an estimated
      5.2% decline in gross margins.

      Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $0.1 million, or 0.2%, to $45.0 million, or
10.6% of net revenues, in the three months ended September 30, 2003 from $45.1
million, or 11.5% of net revenues, in the three months ended September 30, 2002.


                                       27
<PAGE>
      Research and Development. Research and development expenses decreased $0.8
million to $6.8 million, or 1.6% of net revenues, in the three months ended
September 30, 2003 from $7.6 million, or 1.9% of net revenues, in the three
months ended September 30, 2002. The decrease in these costs was primarily
attributable to our corporate cost reduction initiatives, which included closing
our two U.S. research and development facilities during the second and third
quarters of 2002 and consolidating these activities within our existing
Asian-based research and development facilities. Our research and development
efforts support our customers' needs for smaller packages and increased
functionality. We continue to invest our research and development resources in
the development of leading-edge technologies. Such technologies include 3D and
stacked die packaging, System-in-Package, MicroLeadframe(TM) technology,
micro-electromechanical system ("MEMS"), memory and I/O cards, Flip Chip
interconnection solutions, camera modules and nanotechnologies.

      Other Expense (Income). Other expenses, net decreased $0.6 million, to
$37.0 million, or 8.7% of net revenues, in the three months ended September 30,
2003 from $37.6 million, or 9.5% of net revenues.

      Equity Investment Losses. Our earnings included our share of losses in our
equity affiliates in the three months ended September 30, 2002 of $12.5 million.
This amount primarily was the result of our investment in ASI prior to March 24,
2003 when our ownership percentage in ASI was reduced to 16% and we ceased the
equity method of accounting for our ASI investment.

      During the three months ended September 30, 2002, we recorded a loss of
$1.8 million on the disposition of a portion of our interest in ASI to Dongbu.

      Income Taxes. During the third quarter of 2003, we recorded a $6.9 million
tax benefit from continuing operations. The $6.9 million tax benefit is the
result of a net reduction in our tax accruals of $10.4 million related to tax
periods that have closed, offset by $3.5 million of tax expense related to
foreign income from our continuing operations.

      We will resume the recognition of deferred tax assets upon returning to
sustained profitability in certain jurisdictions. We anticipate recognizing
approximately $5.0 million in foreign tax expense for the remainder of 2003. As
of September 30, 2003, we had U.S. net operating losses totaling approximately
$400 million expiring between 2021 and 2022. Additionally, as of September 30,
2003, we had approximately $53 million of non-U.S. net operating losses
available for carryforward, expiring between 2003 and 2012.

Nine Months Ended September 30, 2003 Compared to Nine Months Ended September 30,
2002

      Net Revenues. Net revenues increased $111.9 million, or 10.8%, to $1,144.9
million in the nine months ended September 30, 2003 from $1,033.0 million in the
nine months ended September 30, 2002.

      Overall unit volumes, excluding the impact of our acquisitions in Japan,
increased 14.5% which was driven by a 24.2% increase for advanced leadframe and
laminate packages and a 3.3% increase in our traditional leadframe business. The
impact of unit volume increases was partially offset by declines in average
selling prices. The revenues of our Japanese acquisition, Amkor Iwate, for the
nine months ended September 30, 2003 increased $13.8 million compared to the
nine month ended September 30, 2002, driven by increased volumes, partially
offset by the impact of the May 26, 2003 earthquake in northern Japan. Net
revenues from our operations in Taiwan and China increased $41.0 million in net
revenues for the nine months ended September 30, 2003.

      Gross Profit (Loss). Gross profit increased $187.8 million to a gross
profit of $222.2 million in the nine months ended September 30, 2003 from a
gross profit of $34.4 million in the nine months ended September 30, 2002. 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 have a significant effect on our gross margin.

      Gross margins as a percentage of net revenues increased 16.1% to 19.4% in
the nine months ended September 30, 2003 as compared to 3.3% in the nine months
ended September 30, 2002 principally as a result of the following:

-     Gross margins in our factories in Korea and the Philippines increased
      12.4% due to a reduction of $102.8 million in depreciation costs,
      increased capacity utilization as a result of increased unit volumes and
      cost savings initiatives. Approximately $26.3 million of the reduced
      depreciation costs was attributable to the fixed asset impairment charge
      recorded during the second quarter of 2002, and approximately $45.8
      million was the result of a change in the estimated


                                       28
<PAGE>
      useful lives of certain assembly equipment effective in the fourth quarter
      of 2002. The remaining decrease in depreciation costs is due to assets
      reaching fully depreciated status.

-     Material cost savings that contributed approximately 3.5% to the increase
      in gross margins.

-     Our operations in Taiwan and China contributed approximately 2.9% to the
      increase in gross margin primarily attributable to increased capacity
      utilization as a result of unit volumes.

      The positive impacts on gross margins were partially offset by:

-     Average selling price erosion across our product lines caused an estimated
      2.4% decline in gross margins.

      Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $5.8 million, or 4.2%, to $131.8 million, or
11.5% of net revenues, in the nine months ended September 30, 2003 from $137.6
million, or 13.3% of net revenues, in the nine months ended September 30, 2002.
The decrease in these costs was principally due to decreased administrative
overhead in our facilities, primarily in Korea and Taiwan, as a result of our
cost reduction initiatives in the first and second quarters of 2002.

      Research and Development. Research and development expenses decreased $5.1
million to $19.5 million, or 1.7% of net revenues, in the nine months ended
September 30, 2003 from $24.5 million, or 2.4% of net revenues, in the nine
months ended September 30, 2002. The decrease in these costs was primarily
attributable to our corporate cost reduction initiatives, which included closing
our two U.S. research and development facilities during the second and third
quarters of 2002 and consolidating these activities within our existing
Asian-based research and development facilities. Our research and development
efforts support our customers' needs for smaller packages and increased
functionality. We continue to invest our research and development resources in
the development of leading-edge technologies. Such technologies include 3D and
stacked die packaging, System-in-Package, MicroLeadframe(TM) technology,
micro-electromechanical system ("MEMS"), memory and I/O cards, Flip Chip
interconnection solutions, camera modules and nanotechnologies.

      Other (Income) Expense. Other expenses, net increased $28.2 million, to
$141.1 million, or 12.3% of net revenues, in the nine months ended September 30,
2003 from $112.9 million, or 10.9% of net revenues, in the nine months ended
September 30, 2002. The net increase in other expenses was primarily the result
of $32.6 million of debt retirement costs incurred during the second and third
quarter in connection with our new $200 million senior secured credit facility,
our $425.0 million senior notes and our $500 million senior note. The debt
retirement costs were comprised of $21.3 million of redemption premium payments
included in other expense (income), and $11.3 million of costs included in
interest expense primarily related to unamortized deferred debt issuance costs.
This increase was partially offset by a $3.5 million decrease in other interest
expense.

      Equity Investment Losses. Our earnings included our share of losses in our
equity affiliates, principally ASI, in the nine months ended September 30, 2003
of $3.6 million compared to $24.7 million in the nine months ended September 30,
2002. On March 24, 2003, we divested 7 million shares of ASI, which reduced our
ownership percentage in ASI to 16% and we ceased equity method of accounting.

      Also, during the three months ended March 31, 2002 and June 30, 2002, we
recorded $96.6 million and $43.0 million, respectively, of impairment charges to
reduce the carrying value of our investment in ASI to ASI's market value.

      Income Taxes. During the nine months ended September 30, 2003, we recorded
a $6.1 million tax benefit from continuing operations. The $6.1 million tax
benefit is the result of a reduction in our tax accruals of $10.4 million
related to tax periods that have closed and a $7.5 million tax benefit related
to the loss from continuing operations, offset by foreign tax expense of $11.8
million. The $7.5 million tax benefit related to the loss from continuing
operations was offset by $7.5 million of current tax expense in discontinued
operations.

      We will resume the recognition of deferred tax assets when we return to
sustained profitability in certain jurisdictions. We anticipate recognizing
approximately $5.0 million in foreign tax expense for the remainder of 2003. As
of September 30, 2003, we had U.S. net operating losses totaling approximately
$400 million expiring between 2021 and 2022. Additionally, as of September 30,
2003, we had approximately $53 million of non-U.S. net operating losses
available for carryforward, expiring between 2003 and 2012.


                                       29
<PAGE>
RESULTS OF DISCONTINUED OPERATIONS

      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. We reflect our
wafer fabrication services segment as a discontinued operation and have restated
our historical results. In connection with the disposition of our wafer
fabrication business, during the first quarter of 2003 we reflected $1.0 million
in severance and other exit costs to close our wafer fabrication services
operations in Boise, Idaho and Lyon, France. Also in the first quarter of 2003,
we recognized a pre-tax gain on the disposition of our wafer fabrication
services business of $58.6 million ($51.5 million, net of tax), which is
reflected in income from discontinued operations. The carrying value of the sold
net assets associated with the business as of February 28, 2003 was $2.4
million.

LIQUIDITY AND CAPITAL RESOURCES

      Semiconductor industry analysts have forecasted significant growth in the
semiconductor industry in 2003 and 2004. The fourth calendar quarter is
typically a seasonally higher quarter for Amkor as compared to the third
quarter. On the basis of customers' forecasts, we currently expect packaging and
test revenue for the fourth quarter of 2003 to be around 5% to 8% higher than
packaging and test revenues for the third quarter of 2003. We expect that gross
margin will be around 25% in the fourth quarter of 2003.

      Net cash provided by (used in) operating, investing and financing
activities from continuing operations and cash provided by discontinued
operations for the nine months ended September 30, 2003 and 2002 were as
follows:

<TABLE>
<CAPTION>
                                                                    FOR THE THREE MONTHS ENDED      FOR THE NINE MONTHS ENDED
                                                                           SEPTEMBER 30,                  SEPTEMBER 30,
                                                                        2003           2002           2003             2002
                                                                        ----           ----           ----             ----
                                                                         (IN THOUSANDS)                 (IN THOUSANDS)
<S>                                                                 <C>             <C>             <C>             <C>
Net cash provided by continuing operation activities                $  45,901       $  48,050       $ 100,009       $  49,422
Net cash used in continuing investing activities                      (30,796)         26,218         (95,365)        (34,767)
Net cash provided by (used in) continuing financing activities        (23,007)        (16,977)          8,455         (13,798)
Net cash provided by discontinued operations                               60          17,363          13,633          33,219
</TABLE>

      Our cash and cash equivalents balance as of September 30, 2003 was $340.5
million. 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.

      On October 17, 2003, we amended certain covenants under our $200.0 million
senior secured credit facility as follows:

      - our maximum annual capital expenditures have been increased to the
        greater of (i) $250 million or (ii) 50% of EBITDA (as defined), not to
        exceed $350 million,

      - we are permitted to repurchase or redeem any senior notes, senior
        subordinated notes or convertible notes with the net cash proceeds of
        equity offerings,

      - the basket for permitted investments has been increased from $25 million
        to $50 million, and

      - the annual basket for repurchases or redemptions of senior notes from
        cash (including proceeds of ASI shares) can be rolled over (to the
        extent unused) from year to year up to an aggregate amount of $300
        million, of which up to $25 million may alternatively be used to
        repurchase or redeem senior subordinated notes or convertible notes.

      In May 2003, we sold $425.0 million of 7.75% senior notes due May 2013. We
sold these notes to qualified institutional buyers and used the net proceeds of
the issuance to redeem our outstanding 9.25% senior notes due 2006. The notes
bear interest at the rate of 7.75% annually and interest payments are due
semi-annually. In connection with the redemption, we recorded charges during the
second quarter of 2003 of $19.7 million related to the premium paid in the
redemption, $6.0 million for the associated unamortized deferred debt issuance
costs and $2.5 million of other costs.

      In April 2003, we entered into a new $200.0 million senior secured credit
facility consisting of a $170.0 million term loan maturing January 31, 2006 and
a $30.0 million revolving line of credit that is available through October 31,
2005. The term loan bears interest at LIBOR plus 4.00% and the revolving line of
credit bears interest at LIBOR plus 4.25%. These interest rates are subject to
downward or upward adjustment according to respective improvements or
deteriorations in our senior secured debt ratings. The term loan principal
repayments are due $1.3 million, $1.7 million, $125.4 million and $41.6 million
in 2003, 2004, 2005 and 2006, respectively. In addition, the credit facility
includes certain affirmative, negative and financial covenants (including
minimum EBITDA, as defined by the credit facility, minimum daily liquidity and
maximum annual capital expenditures) and events of default, which are customary
for credit facilities of this type. This new credit facility replaced the
existing $196.9 million senior secured credit facility, which included a $96.9
million term loan and a $100.0 million revolving credit facility that were
scheduled to mature September 30, 2005 and March 31, 2005, respectively. The
funds available under this new credit facility were used to repay the previously
existing $96.9 million term loan outstanding and for


                                       30

<PAGE>
general corporate purposes.

      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. As of September 30, 2003 and through the date of this filing, we
were in compliance with all financial covenants. 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.

      We now have, and for the foreseeable future will continue to have, a
significant amount of indebtedness. As of September 30, 2003, we had total debt
of $1,840.0 million. 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 the nine months ended September 30,
2003, interest expense payable in cash was $108.5 million.

      We received board of director approval to purchase up to $150.0 million of
the 9.25% senior notes due 2008, and we have been purchasing these notes in the
open market. As of September 30, 2003, we have purchased $29.5 million of the
9.25% senior notes due 2008 for which we have recognized a loss on the
retirement of debt of approximately $1.6 million and a charge of $0.4 million
for the associated unamortized deferred debt issuance costs in the three and
nine months ended September 30, 2003.

      We expect to spend up to $200.0 million in capital expenditures in 2003,
focused on fine pitch wirebonders, testers and related equipment in response to
strengthening demand for advanced assembly and test solutions. During the nine
months ended September 30, 2003 and 2002, we made capital expenditures of $148.2
million and $82.3 million, respectively.

      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 were
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 was 1.7 billion Japanese yen. In April 2003, we made a payment
of 300.0 million Japanese yen, or $2.5 million on the date of payment. We are
withholding payment of 1.4 billion yen ($12.6 million based on the spot exchange
rate at September 30, 2003) of this amount pending resolution of a controversy
relating to the patents acquired in connection with the acquisition. 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 the remaining 40% ownership interest, which we are required to
purchase in 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 ($9.0 million to
$35.9 million based on the spot exchange rate at September 30, 2003). We
currently estimate the cash payments for the remaining 40% ownership interest
will range from $10.0 million to $15.0 million. This amount includes a payment
of $2.0 million to terminate our commitment to purchase a tract of land adjacent
to the Amkor Iwate facility. 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.

      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 5,700 Korean won per share, the market value of ASI
            common stock as traded on the Korean Stock Exchange at the time we
            entered into the share sale agreement. We received $58.1 million in
            net cash proceeds and 42 billion Korean won (approximately $36.5
            million at a spot exchange rate as of September 30, 2003) 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


                                       31
<PAGE>
              which are Korean corporations and are collectively referred herein
              as "Dongbu." Associated with this transaction, we recorded a $1.8
              million loss. Additionally, we divested one million shares of ASI
              common stock in connection with the payment of certain advisory
              fees related to this transaction. On September 30, 2003, we
              received 21 billion Korean won, or $18.3 million based on the spot
              exchange rate at September 30, 2003, consisting of principal.

            - 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, the market value of the shares as
              publicly traded in Korea; (ii) we acquired the Precision Machine
              Division ("PMD") of Anam Instruments, a related party to Amkor,
              for $8 million, its fair value; 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. On
              September 17, 2003, we sold our entire ownership interest in
              Acqutek. PMD supplies sophisticated die mold systems and tooling
              to the semiconductor industry and historically over 90% of its
              sales were to Amkor. We determined the fair value of PMD based on
              projected cash flows discounted at a rate commensurate with the
              risk involved. At the time of our acquisition of PMD, Anam
              Instruments was owned 20% by ASI and 20% by a family member of
              James Kim.

            - On February 28, 2003, we sold our wafer fabrication services
              business to ASI for total consideration of $62.0 million. We
              negotiated the fair value of our wafer fabrication services
              business with ASI and Dongbu. The parties calculated fair value
              based on an assessment of projected cash flows discounted at a
              rate commensurate with the risk involved. 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.

      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. It is likely that we would not have
entered into the Acqutek or PMD transactions absent the share sale to Dongbu and
the sale of the wafer fabrication services business to ASI. Had these
transactions not been interrelated, we may have utilized a different negotiation
strategy for the investment in Acqutek and the acquisition of PMD, which could
have resulted in us reaching a different conclusion of the fair value of both of
these transactions.

      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.

      Subsequent to the sale of a portion of our investment in ASI to Dongbu in
2002, we were unable to identify another strategic buyer. ASI's common stock,
which is listed on the Korean Stock Exchange, is relatively thinly traded and
subject to volatile swings in daily trading volumes. In an effort to continue to
monetize our investment in ASI's common stock, we evaluated, in consultation
with a financial institution, the most efficient method to divest a large block
of shares into the market without destabilizing the share price of ASI's common
stock. As of March 24, 2003, we consummated a series of transactions proposed by
the financial institution. We irrevocably sold a block of 7 million shares of
ASI common stock to the financial institution for 24.4 billion Korean won ($19.5
million based on the spot exchange rate as of the transaction date, or $2.81 per
share). We also entered into a nondeliverable call option with the financial
institution for $6.8 million, the fair value of the option at that date plus the
transaction costs. For the three months ended March 31, 2003, we recorded a
charge of $2.2 million to adjust for the value of the option as a result of
ASI's share price declining from 3,511 Korean won per share, or $2.81 per share,
at March 24, 2003 to 3,150 Korean won at March 31, 2003. In May 2003, we
exercised the nondeliverable call option realizing $5.6 million of cash
proceeds, and for the three months ended June 30, 2003 we recorded a gain of
$1.0 million related to the excess amount of the exercise proceeds above the
nondeliverable call option's book value.

      On September 17, 2003, we sold an additional 5 million shares of ASI
common stock to the same financial institution for 21.8 billion Korean won
($18.5 million based on the spot exchange rate as of the transaction date, or
$3.69 per share) and recorded an associated gain of $4.7 million during the
three months ended September 30, 2003. We also entered into a nondeliverable
call option with the financial institution for $6.5 million, the fair value of
the option at that date plus the transaction costs. The call option is scheduled
to expire June 2004 and is indexed to ASI's share price with a


                                       32
<PAGE>
strike price of $2.62 per share, or approximately 70% of the then market value
of ASI's common stock. The value of the option declined $4.4 million as of
September 30, 2003 as a result of ASI's share price declining from 4,305 Korean
won per share (or $3.69 per share based on the spot exchange rate at September
17, 2003) to 3,395 Korean won per share (or $2.95 per share based on the spot
exchange rate at September 30, 2003), and we recorded the loss of $4.4 million
during the three months ended September 30, 2003.

      The call options allowed us to continue to monetize our investment in ASI
at a fixed price with unlimited upside and limited downside economics. In
addition, it provided us with the economic benefits of selling shares through a
dollar averaging sales program without incurring the transaction costs
associated with multiple small quantity sales. The call premiums provided the
financial institution some downward protection if the market for ASI's common
stock destabilizes as it sold its investment in ASI's common stock into the
market. If ASI's share price declines below the exercise price of the call
option, then the net proceeds from the exercise of the September 17, 2003 option
could be less than the $6.5 million we paid for the call option. All ownership
rights and privileges associated with the 12 million shares of ASI's common
stock sold during 2003 were irrevocably transferred to the financial
institution. In no event could the financial institution put the shares back to
Amkor nor was there a provision in the agreements for Amkor to reacquire the
shares.

      As of September 30, 2003, we owned 14.7 million shares of ASI, or 12% 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 us.

      In connection with the 2002 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. 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. On
September 17, 2003, our investment in Acqutek was sold at a loss of $0.3
million. We previously recorded, during the second quarter of 2003, a $0.9
million charge to earnings to reflect the decline in market value of Acqutek,
which was considered to be other than temporary. Total purchases from Acqutek
included in cost of revenue for the three months ended September 30, 2003 and
2002 were $4.8 million and $6.0 million, respectively. Total purchases from
Acqutek included in cost of revenue for the nine months ended September 30, 2003
and 2002 were $11.5 million and $12.5 million, respectively, which we believe
were conducted on an arms-length basis in the ordinary course of business.

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. Our preparation of this
quarterly report on Form 10-Q requires us to make estimates and assumptions that
affect the reported amounts 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. We do 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. 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


                                       33
<PAGE>
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 September 30, 2003 and 2002, the accrual for current taxes and
estimated additional taxes was $32.7 million and $51.9 million, respectively.
While it is reasonably possible that future payments may exceed amounts accrued,
we recorded a net tax benefit during the three months ended September 30, 2003
of $10.4 million to reduce our tax accruals based on related tax periods no
longer open. 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. In
connection with our divestiture in 2003 of 7 million shares of ASI common stock,
we realized a capital loss of approximately $53.4 million and recognized a U.S.
tax benefit of $20.3 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
determined in the fourth quarter of 2002 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 sustained profitability in
certain jurisdictions. Additionally, until we utilize our net operating loss
carryforwards, the income tax provision will reflect modest levels of foreign
taxation. As of September 30, 2003, we had U.S. net operating losses totaling
approximately $400 million expiring between 2021 and 2022. Additionally, as of
September 30, 2003, we had approximately $53 million of non-U.S. net operating
losses available for carryforward, 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.

      During 2001, the semiconductor industry declined an unprecedented 32%,
which impacted the utilization rates of our packaging and test assets. During
the second quarter of 2002, total packaging and test revenues grew over 21% as
compared to the first quarter of 2002. We experienced significant recovery in
most of our company's packaging services. However, our test services assets and
several packaging services assets:


                                       34
<PAGE>

      -     did not contribute significantly to the growth experienced during
            the second quarter of 2002,

      -     remained at low utilization rates relative to our projections and

      -     were no longer expected to reach previously anticipated utilization
            levels.

      In addition, as of June 30, 2002, we experienced a 72% decline in our
market capitalization as compared to March 31, 2002. These events triggered an
impairment review in accordance with SFAS No. 144. This review included a
company-wide evaluation of underutilized assets and a detailed update of our
operating and cash flow projections.

      Based on our company-wide evaluation of underutilized assets, we
identified $19.8 million of test and packaging 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. As of September 30, 2003, we disposed of $15.8 million of the
$19.8 million identified assets, and intend to sell the remaining balance of
these items by December 31, 2003.

      Upon the completion of the process to identify the packaging and test net
assets to be disposed, we reviewed our assets to be held and used for
impairment. Based on the June 30, 2002 operating and cash flow projections, we
determined that the carrying value of our test services assets and several
packaging services assets being held and used, including intangible assets that
we are amortizing, exceeded the anticipated cash flows attributable to those
assets. We grouped our long-lived assets with other assets and liabilities at
the lowest level for which identifiable cash flows were largely independent of
the cash flows of other assets and liabilities. For our company, the lowest
level of identifiable cash flows is at the test reporting unit level and for our
packaging services reporting unit at the package type level.

      Our test reporting unit and the outsourced integrated circuit test
services industry were adversely impacted by excess capacity at the large
integrated device manufacturers. We expected that when the semiconductor
industry recovered, the integrated device manufacturers' demand for outsourced
test services would also recover. However, that anticipated recovery failed to
materialize in connection with the initial recovery we noted in the
semiconductor industry during the first half of 2002 due to continued excess
test capacity held by the large integrated device manufacturers. We no longer
expect that the demand for our test services on our existing technology
platforms will return to the previously anticipated rates. Several of our
package types based on more mature technologies and processes, including older
leadframe and laminate package types, were adversely impacted by a technology
shift to matrix and high density leadframes and the movement from multi-layer
laminate substrates to tape and chip arrays and stacked-die packages. We
expected that when the semiconductor industry recovered there would still be
sufficient demand for these more mature products. However, that anticipated
recovery failed to materialize in connection with the initial recovery we noted
in the semiconductor industry during the first half of 2002 due to these
technology shifts and the related significant excess capacity in the industry.
We no longer expect that the demand for these package types will return to the
previously anticipated rates. Additionally, we experienced insufficient demand
related to select investments in advanced package technologies principally as a
result of alternative advanced package technologies which became industry
standard.

      As of June 30, 2002, we recognized a $171.6 million impairment charge to
reduce the carrying value of test and packaging assets to be held and used to
their fair value. The components of the charge were as follows:

<TABLE>
<CAPTION>
                                                                CARRYING       FAIR       IMPAIRMENT
                                                                  VALUE        VALUE        CHARGE
                                                                --------     --------     --------
                                                                          (IN THOUSANDS)
<S>                                                             <C>          <C>          <C>
Test assets:
     Property, plant and equipment and acquired intangibles     $ 95,400     $ 21,900     $ 73,500

Packaging assets:
      Property, plant and equipment                              157,700       59,600       98,100
                                                                --------     --------     --------
                                                                $253,100     $ 81,500     $171,600
                                                                ========     ========     ========
</TABLE>

      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.
We estimated that depreciation expense would be reduced by approximately $77
million during the twelve month period


                                       35
<PAGE>
following the second quarter of 2002. The impact to depreciation expense will
diminish quarterly as these assets reach the end of their respective useful
lives.

      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 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. During the second quarter of 2003, we performed our annual review of
goodwill for impairment. Based on our review, we concluded that goodwill, as of
June 30, 2003, was not impaired.

      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 in the fourth quarter of 2002. This change reduced depreciation
expense by approximately $15 million and $46 million, respectively, for the
three and nine months ended September 30, 2003. 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 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. 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 financial institution 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 of March 24, 2003, we owned
19.7 million shares of ASI, or 16%


                                       36
<PAGE>
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. On
September 17, 2003, we sold an additional 5 million shares of ASI common stock
to the same financial institution for 21.8 billion Korean won ($18.5 million
based on the spot exchange rate as of the transaction date, or $3.69 per share).
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.

      In connection with the 2002 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. 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. On
September 17, 2003, our investment in Acqutek was sold at a loss of $0.3
million. We previously recorded, during the second quarter of 2003, a $0.9
million charge to earnings to reflect the decline in market value of Acqutek,
which was considered to be other than temporary. Total purchases from Acqutek
included in cost of revenue for the three months ended September 30, 2003 and
2002 were $4.8 million and $6.0 million, respectively. Total purchases from
Acqutek included in cost of revenue for the nine months ended September 30, 2003
and 2002 were $11.5 million and $12.5 million, respectively, which we believe
were conducted on an arms-length basis in the ordinary course of business.

      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
will 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.

RISK FACTORS THAT MAY AFFECT FUTURE OPERATING PERFORMANCE

      The following section discloses the known material risks facing our
company. Additional risks and uncertainties not presently known 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.

      THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS REGARDING OUR EXPECTED
PERFORMANCE THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS
A RESULT OF CERTAIN FACTORS, INCLUDING THE RISKS FACED BY US DESCRIBED BELOW.

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. We experienced significant recovery in
most of our packaging services during 2002 and the nine months ended September
30, 2003. Visibility is improving in light of customer forecasts and positive
trends are forming. During the three months ended September 30, 2003, a large
number of customers over-supported their forecasts as demand materialized faster
than initially projected. However, there still remains some uncertainty as to
the sustainability of these trends. If industry conditions do not continue to
improve, we could sustain significant losses which could materially impact our
business including our liquidity.

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

      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. Our profitability is dependent upon the utilization of
our capacity, semiconductor package mix, the average selling price of our
services and our ability to control our costs including labor,


                                       37
<PAGE>
material, overhead and financing costs. Our operating results have varied
significantly from period to period. During the three year period ended December
31, 2002 and the nine months ended September 30, 2003, our revenues, gross
margins and operating income have fluctuated significantly as a result of the
following factors over which we have little or no control and which we expect to
continue to impact our business:

      -     fluctuation in demand for semiconductors and the overall health of
            the semiconductor industry,

      -     changes in our capacity utilization,

      -     declining average selling prices,

      -     changes in the mix of semiconductor packages,

      -     absence of backlog and the short-term nature of our customers'
            commitments and the impact of these factors on the timing and volume
            of orders relative to our production capacity,

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

      -     changes in labor costs to perform our services,

      -     the timing of expenditures in anticipation of future orders,

      -     changes in effective tax rates,

      -     high leverage and restrictive covenants,

      -     international events that impact our operations including the impact
            of Severe Acute Respiratory Syndrome (SARS) and environmental events
            such as earthquakes, and

      -     difficulties integrating acquisitions and ability to attract
            qualified employees to support our geographic expansion.

      We have historically been unable to accurately predict the impact of these
factors upon our results for a particular period. We also expect that these
factors as well the factors set forth below, which have not significantly
impacted our recent historical results, may impair our future business
operations and may materially and adversely affect our revenues, gross profit
and operating income, or lead to significant variability of quarterly or annual
operating results:

      -     the availability and cost of financing for expansion,

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

      -     rescheduling and cancellation of large orders,

      -     warranty and product liability claims;

      -     intellectual property transactions and disputes, and

      -     fluctuations in our manufacturing yields.

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

      Prices for packaging and test 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 the three and nine months ended September 30, 2003, as compared to the
comparable prior year periods, the decline in average selling prices eroded
margins by 5.2% and 2.4%, respectively. 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 September 30, 2003, total debt was $1,840.0
million. 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.

      On April 22, 2003, we entered into a new $200 million senior secured
credit facility consisting of a $170 million term loan which matures on January
31, 2006 and a $30 million revolving line of credit (under which no amounts are
currently outstanding) which is available through October 31, 2005. The new
credit facility replaces our previous $197 million senior


                                       38
<PAGE>
secured credit facility, which included a $97 million term loan that was to
mature September 30, 2005 and a $100 million revolving credit facility that was
to be available through March 31, 2005. A portion of the proceeds from the term
loan was used to repay the $97 million term loan then outstanding under the
previous credit facility and the remainder of the proceeds will be used for
general corporate purposes.

      In January 2004 we are required to purchase the remaining 40% ownership
interest of Amkor Iwate currently owned by 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 ($9.0 million to $35.9 million based on the spot exchange
rate at September 30, 2003). We currently estimate the cash payments for the
remaining 40% ownership interest will range from $10 million to $15 million.
This amount includes an estimated payment of $2 million to terminate our
commitment to purchase a tract of land adjacent to the Amkor Iwate facility.

      We were required to pay to Citizen Watch Co., Ltd. 1.7 billion Japanese
yen in deferred purchase price and other contingent payments in connection with
our purchase of the semiconductor packaging business of Citizen Watch Co, Ltd.
In April 2003, we made a payment of 300.0 million Japanese yen, or $2.5 million
based on the exchange rate on the date of the payment. We are withholding
payment of 1.4 billion yen ($12.6 million based on the spot exchange rate at
September 30, 2003) of this amount pending resolution of a controversy relating
to the patents acquired in connection with the acquisition.

      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. As of September 30, 2003 and through the date of this filing, we
were in compliance with all financial covenants. 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.

INVESTMENT IN ASI -- OUR RESULTS AND FINANCIAL CONDITION MAY BE ADVERSELY
AFFECTED BY DECREASES IN THE PRICE OF ASI'S COMMON STOCK.

      At September 30, 2003 we owned 14.7 million shares, or 12%, of ASI's
voting stock. We currently account for our investment in ASI 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. In addition, in the event
of a decline in the market value of the ASI stock that is not temporary, we will
be required to record a charge to earnings for the unrealized loss, and a new
cost basis for the stock will be established.

      In connection with our sale of ASI shares to Dongbu in September 2002,
Amkor and Dongbu agreed to use their best efforts to provide releases and
indemnifications to the past and incumbent chairman, directors and officers of
ASI, including James Kim, our CEO and chairman, and members of his family, from
any and all liabilities arising out of the performance of their duties at ASI
between January 1, 1995 and December 31, 2001. We are not aware of any claims or
other liabilities which these individuals would be released from or for which
they would receive indemnification.

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

                                       39
<PAGE>
      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;

      -     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.

      The impacts of major health concerns, such as Severe Acute Respiratory
Syndrome ("SARS"), could also adversely affect our business by disrupting
customer order patterns, reducing demand for our products in Asia, disrupting
the production and shipping capabilities of our manufacturing facilities, which
are located mostly in Asia, and disrupting the production and shipping
capabilities of our suppliers, which are also heavily concentrated in Asia,
which could result in increased supply chain costs.

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.
For example, each business we have acquired had, at the time of acquisition,
multiple systems for managing its own manufacturing, sales, inventory and other
operations. Migrating these businesses to our systems typically is a slow,
expensive process requiring us to divert significant amounts of resources from
multiple aspects of our operations. This growth has strained our managerial,
financial, 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. Additionally, as part of our
ongoing strategic planning, we evaluate our management team and engage in
long-term succession planning in order to ensure orderly replacement of key
personnel. We cannot assure you that we will be successful in these efforts or
in hiring and properly training sufficient numbers of qualified personnel and in
effectively managing our growth. Our inability to attract, retain, motivate and
train qualified new personnel could have a material adverse effect on our
business.

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

      We obtain from various vendors the materials and equipment required for
the packaging and test services performed by our factories. We source most of
our materials, including critical materials such as leadframes 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.

      Beginning in the second quarter of 2003, we began to experience increases
in substrate material costs as a result of supply shortages. Substrate material
costs have stabilized at the higher price levels set during the second quarter
of 2003.


                                       40
<PAGE>
We have significantly enhanced our supply base and do not foresee substrate
material availability as an ongoing issue. However, supply shortages may again
occur in the future and in such an event, gross margins could be negatively
impacted.

INCREASED LITIGATION INCIDENT TO OUR BUSINESS -- OUR BUSINESS MAY SUFFER AS A
RESULT OF OUR INVOLVEMENT IN VARIOUS LAWSUITS.

      Recently, we have become party to an increased number of litigation
matters, relative to historic levels. Much of the recent increase in litigation
relates to an allegedly defective epoxy mold compound formerly used in some of
our products. In 2002, we were served with a third party complaint in an action
between Fujitsu Limited and Cirrus Logic, Inc., in which Fujitsu alleged that
semiconductor devices it purchased from Cirrus Logic were 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. This case is
pending in the U.S. District Court for the Northern District of California. The
complaint, as amended to date, alleges damages in excess of $100 million,
although, as of this date, Fujitsu has not indicated how it will substantiate
this amount of damages. Cirrus Logic filed a third party complaint against us
alleging that any liability for chip defects should be assigned to us because we
assembled the subject semiconductor devices. Upon receipt of the third party
complaint, we filed an answer denying all liability, and our own third party
complaint against Sumitomo Bakelite Co., Ltd., the Japanese manufacturer of the
allegedly defective epoxy mold compound. In conjunction with this matter,
Fujitsu has recently filed a direct claim against us for damages. In response,
we filed an answer to the complaint denying all liability to Fujitsu. More
recently, we have been drawn into four additional actions related to this epoxy
mold compound. In March 2003, we were served with a cross-complaint in an
action between Seagate Technology and Atmel Corporation. Atmel's complaint seeks
indemnification from us for any damages incurred from the claims by Seagate
Technology. We have answered Atmel's cross-complaint, denying all liability, and
have filed a cross-complaint against Sumitomo Bakelite Co., Ltd., the
manufacturer of the allegedly defective mold compound. No trial date has been
set in this case, which is pending in the Superior Court of California, Santa
Clara County. In April 2003, we were served with a cross-complaint in an action
between Maxtor Corporation and Koninklijke Philips Electronics ("Philips").
Philips' complaint seeks indemnification from us for any damages incurred from
the claims by Maxtor Corporation. Philips subsequently filed a cross-complaint
directly against Sumitomo Bakelite Co., Ltd., alleging, among other things, that
Sumitomo Bakelite Co., Ltd. breached its contractual obligations to both us and
Philips by supplying a defective mold compound resulting in the failure of
certain Philips semiconductor devices. We have denied all liability in this
matter and have also asserted a cross-complaint against Sumitomo Bakelite Co.,
Ltd. A trial date has been set for April 2004 and this case is pending in the
Superior Court of California, Santa Clara County. In August 2003 and September
2003, we were served with complaints filed by Maxim Integrated Products Inc.,
and Fairchild Semiconductor Corporation, respectively. Both parties are seeking
damages related to our use of Sumitomo Bakelite Co., Ltd.'s epoxy mold compound
in assembling their semiconductor packages. These cases are pending in the
Superior Court of California, Santa Clara County. On September 5, 2003, we filed
a pleading to have the Maxim case dismissed and are awaiting a hearing on that
action. On October 31, 2003, we filed a pleading to have the Fairchild case
dismissed and are awaiting a hearing on that action. If our motions against
Fairchild and Maxim are not granted, we expect to fully deny all liability and
to file cross-claims against Sumitomo Bakelite Co., Ltd.

      In the case of each of these matters, all of which are at an early stage,
we believe we have meritorious defenses and valid third party claims against
Sumitomo Bakelite Co., Ltd. should the epoxy mold compound be found to be
defective. However, we cannot be certain that we will be able to recover any
amount from Sumitomo Bakelite Co., Ltd. if we are held liable in these matters,
or that any adverse result would not have a material impact upon us. Moreover,
other customers of ours have made inquiries about the epoxy mold compound, which
was widely used in the semiconductor industry, and no assurance can be given
that claims similar to these will not be made against us by other customers in
the future.

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 our ability 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.

                                       41
<PAGE>
      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 semiconductor companies that are
current or potential customers. 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 September 30, 2003, we held 274 U.S. patents and had 187 pending
patents. In addition to the U.S. patents, we held 743 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 ourselves 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 September 30, 2003, Mr. James Kim and members of his family
beneficially owned approximately 43.7% 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.

                                       42
<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 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK SENSITIVITY

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

Foreign Currency Risks

      Our primary exposures to foreign currency fluctuations are associated with
transactions and related assets and liabilities denominated in Philippine pesos,
Korean won, Japanese yen, and Taiwanese dollar and Chinese renminbi 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 derivatives instruments including forward
exchange contracts has been insignificant during the nine months ended September
30, 2003, and throughout 2002 and 2001, and it is expected that our use of
derivative instruments will continue to be minimal.

      Our foreign currency financial instruments primarily consist of cash,
trade receivables, investments, deferred taxes, trade payables and accrued
expenses. Based on our portfolio of foreign currency based financial instruments
at September 30, 2003, a 20% change in the foreign currency to U.S. dollar spot
exchange rate would result in the following foreign currency risk:

<TABLE>
<CAPTION>
                                                (000S)  CHART OF FOREIGN CURRENCY RISK
                                --------------------------------------------------------------------
                                PHILIPPINE      KOREA         TAIWANESE      JAPANESE       CHINESE
                                  PESO           WON           DOLLAR          YEN          RENMINBI
                                ----------     -------        ---------      --------       --------
                                                          (IN THOUSANDS)
<S>                             <C>            <C>            <C>            <C>            <C>
As of September 30, 2003        $ 3,304        $10,132        $ 2,298        $    46        $   676

As of September 30, 2002        $ 2,964        $15,073        $ 2,277        $   416        $   907
</TABLE>

Interest Rate Risks

      We are exposed to interest rate risk with respect to our long-term debt.
As of September 30, 2003, we had a total of $1,840.0 million of debt of which
87.6% was fixed rate debt and 12.4% was variable rate debt. Our variable rate
debt principally consisted of short-term borrowings and amounts outstanding
under our secured bank facilities that included a term loan and a $30.0 million
revolving line of credit of which no amounts were drawn as of September 30,
2003. The fixed rate debt consists of senior notes, senior subordinated notes,
convertible subordinated notes and foreign debt. As of December 31, 2002 we had
a total of $1,808.9 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


                                       43
<PAGE>
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 September 30, 2003.

<TABLE>
<CAPTION>
                                               YEAR ENDING DECEMBER 31,
                          ----------------------------------------------------------------
                             2003         2004        2005         2006           2007
                          ---------    ---------    --------    -----------    -----------
<S>                       <C>          <C>          <C>         <C>            <C>
Long-term debt:
  Fixed rate debt         $   4,407    $   1,674    $   874     $   250,316    $   258,750
  Average interest rate         4.0%         4.0%       4.0%            5.7%           5.0%

  Variable rate debt      $  46,785    $   3,183    $ 89,985    $    86,263    $       824
  Average interest rate         1.5%         4.4%        4.9%           4.9%           2.6%
</TABLE>

<TABLE>
<CAPTION>
                                                             FAIR
                           THEREAFTER        TOTAL           VALUE
                          ------------    ------------    ----------
<S>                       <C>             <C>             <C>
Long-term debt:
  Fixed rate debt         $  1,095,500    $  1,611,521    $1,638,932
  Average interest rate            8.9%            7.8%

  Variable rate debt      $      1,444    $    228,484    $  228,484
  Average interest rate            2.7%            4.2%
</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. 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.

ITEM 4.  CONTROLS AND PROCEDURES

      (a)   Amkor carried out an evaluation as of the end of the quarter covered
            by this report, 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 (as such term is defined
            in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the
            "Exchange Act")) as of the end of the fiscal quarter covered by this
            report. 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 control
            over financial reporting during the quarter covered by this report
            that have materially affected, or are reasonable likely to
            materially affect, Amkor's control over financial reporting.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      We currently are a party to various legal proceedings, including those
noted below. While we currently believe 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.

      Recently, we have become party to an increased number of litigation
matters, relative to historic levels. Much of the recent increase in litigation
relates to an allegedly defective epoxy mold compound formerly used in some of
our products. In 2002, we were served with a third party complaint in an action
between Fujitsu Limited and Cirrus Logic, Inc., in which Fujitsu alleged that
semiconductor devices it purchased from Cirrus Logic were 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. This case is
pending in the


                                       44
<PAGE>
U.S. District Court for the Northern District of California. The complaint, as
amended to date, alleges damages in excess of $100 million, although, as of this
date, Fujitsu has not indicated how it will substantiate this amount of damages.
Cirrus Logic filed a third party complaint against us alleging that any
liability for chip defects should be assigned to us because we assembled the
subject semiconductor devices. Upon receipt of the third party complaint, we
filed an answer denying all liability, and our own third party complaint against
Sumitomo Bakelite Co., Ltd., the Japanese manufacturer of the allegedly
defective epoxy mold compound. In conjunction with this matter, Fujitsu has
recently filed a direct claim against us for damages. In response, we filed an
answer to the complaint denying all liability to Fujitsu. More recently, we have
been drawn into four additional actions related to this epoxy mold compound. In
March 2003 we were served with a cross-complaint in an action between Seagate
Technology and Atmel Corporation. Atmel's complaint seeks indemnification from
us for any damages incurred from the claims by Seagate Technology. We have
answered Atmel's cross-complaint, denying all liability, and have filed a
cross-complaint against Sumitomo Bakelite Co., Ltd., the manufacturer of the
allegedly defective mold compound. No trial date has been set in this case,
which is pending in the Superior Court of California, Santa Clara County. In
April 2003, we were served with a cross-complaint in an action between Maxtor
Corporation and Koninklijke Philips Electronics ("Philips"). Philips' complaint
seeks indemnification from us for any damages incurred from the claims by Maxtor
Corporation. Philips subsequently filed a cross-complaint directly against
Sumitomo Bakelite Co., Ltd., alleging, among other things, that Sumitomo
Bakelite Co., Ltd. breached its contractual obligations to both us and Philips
by supplying a defective mold compound resulting in the failure of certain
Philips semiconductor devices. We have denied all liability in this matter and
have also asserted a cross-complaint against Sumitomo Bakelite Co., Ltd. A trial
date has been set for April 2004 and this case is pending in the Superior Court
of California, Santa Clara County. In August 2003 and September 2003, we were
served with complaints filed by Maxim Integrated Products Inc., and Fairchild
Semiconductor Corporation, respectively. Both parties are seeking damages
related to our use of Sumitomo Bakelite Co., Ltd.'s epoxy mold compound in
assembling their semiconductor packages. These cases are pending in the Superior
Court of California, Santa Clara County. On September 5, 2003 we filed a
pleading to have the Maxim case dismissed and are awaiting a hearing on that
action. On October 31, 2003 we filed a pleading to have the Fairchild case
dismissed and are awaiting a hearing on that action. If our motions against
Fairchild and Maxim are not granted, we expect to fully deny all liability and
to file cross-claims against Sumitomo Bakelite Co., Ltd.

      In the case of each of these matters, all of which are at an early stage,
we believe we have meritorious defenses and valid third party claims against
Sumitomo Bakelite Co., Ltd., should the epoxy mold compound be found to be
defective. However, we cannot be certain that we will be able to recover any
amount from Sumitomo Bakelite Co., Ltd. if we are held liable in these matters,
or that any adverse result would not have a material impact upon us. Moreover,
other customers of ours have made inquiries about the epoxy mold compound, which
was widely used in the semiconductor industry, and no assurance can be given
that claims similar to these will not be made against us by other customers in
the future.

      On August 16, 2002, we 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 was 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 (the
"Immunity Agreement") dated June 30, 1993 between Amkor and Motorola.

      We and Motorola resolved the controversy with respect to all issues
relating to the Immunity Agreement, and all claims and counterclaims filed by
the parties in the case relating to the Immunity Agreement were dismissed or
otherwise disposed of without further litigation. The claims relating to the
License Agreement and the '133 and '278 Patents remained pending.

      We and Motorola both filed motions for summary judgment on the remaining
claims, and oral arguments were heard on September 3, 2003. On October 6, 2003
the Superior Court of Delaware ruled in favor of Amkor and issued an Opinion and
Order granting Amkor's motion for summary judgment and denying Motorola's motion
for summary judgment. On October 22, 2003, Motorola filed an appeal in Supreme
Court of Delaware. We believe we will prevail on the same merits in such appeal.
In addition, should Motorola prevail at the appellate level, we believe we have
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.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      None

                                       45
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

      At Amkor Technology, Inc.'s Annual Meeting of Stockholders held on July
30, 2003 the following proposals were adopted by the margins indicated.

1.    To elect a Board of Directors to hold office until the next Annual Meeting
      of Stockholders or until their respective successors have been elected or
      appointed.

<TABLE>
<CAPTION>
                                                                   NUMBER OF SHARES
                                                              VOTED FOR          WITHHELD
                                                              ---------          --------
<S>                                                          <C>                 <C>
James J. Kim............................................     135,126,245         1,273,814
John N. Boruch..........................................     135,919,769           480,290
Winston J. Churchill....................................     133,402,660         2,999,399
Thomas D. George........................................     134,046,682         2,353,377
Gregory K. Hinckley.....................................     135,282,647         1,117,412
Juergen Knorr...........................................     135,917,790           482,269
John B. Neff............................................     135,287,038         1,113,021
James W. Zug............................................     134,958,736         1,441,323
</TABLE>

2.    To ratify the appointment of the accounting firm of PricewaterhouseCoopers
      LLP as independent auditors for the company for the current year. Votes
      totaled 135,521,733 for, 859,081 against and 19,245 abstain.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   The following exhibits are filed as part of this report:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER         DESCRIPTION OF EXHIBIT
------         ----------------------
<S>            <C>
10.1           2003 Nonstatutory Inducement Grant Stock Plan dated September 9, 2003.

10.2           Amendment No. 1 to Second Amended and Restated Credit Agreement dated October 17,
               2003.

12.1           Computation of Ratio of Earnings to Fixed Charges.

31.1           Certification of James J. Kim, Chief Executive Officer of Amkor Technology, Inc.,
               Pursuant to Rule 13a - 14(a) under the Securities Exchange Act of 1934.

31.2           Certification of Kenneth T. Joyce, Chief Financial Officer of Amkor Technology, Inc.,
               Pursuant to Rule 13a - 14(a) under the Securities Exchange Act of 1934.

32             Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18
               U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>

                                       46
<PAGE>
(b)   REPORTS ON FORM 8-K

      We filed or furnished the following reports on Form 8-K with the
Securities and Exchange Commission during the quarterly period ended September
30, 2003:

      Current Report on Form 8-K dated July 28, 2003 (filed July 29, 2003),
Items 7 and 12 - related to a press release dated July 28, 2003 announcing our
financial results for the quarter ended June 30, 2003.

      Current Report on Form 8-K dated July 28, 2003 (filed August 1, 2003),
Items 7 and 12 - related to the transcript of the second quarter 2003 earnings
conference call held on July 28, 2003.

      Current Report on Form 8-K/A, Amendment No. 2, dated April 30, 2003 (filed
August 22, 2003), Item 5 - to amend Form 8-K/A, Amendment No. 1 dated May 21,
2003 (filed May 21, 2003).



                                       47
<PAGE>
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.

AMKOR TECHNOLOGY, INC.

                              By:/s/ KENNETH T. JOYCE
                                 -----------------------------------------------
                              Kenneth T. Joyce
                              Chief Financial Officer
                              (Principal Financial, Chief Accounting Officer and
                              Duly Authorized Officer)

Date:  November 3, 2003



                                       48


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>w91175exv10w1.txt
<DESCRIPTION>2003 NONSTATUTORY INDUCEMENT GRANT STOCK PLAN
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.1

                             AMKOR TECHNOLOGY, INC.

                  2003 NONSTATUTORY INDUCEMENT GRANT STOCK PLAN

         1.       Purposes of the Plan. The purposes of this Stock Plan are:

                  -        to attract and retain the best available personnel
                           for positions of substantial responsibility,

                  -        to provide additional incentive to Employees,
                           Directors and Consultants, and

                  -        to promote the success of the Company's business.

                  Nonstatutory Stock Options and Stock Purchase Rights may be
granted under the Plan, as determined by the Administrator.

                  No employee is automatically entitled to participate in, or be
considered for participation in, the Plan at all or at a particular level.
Participation is one grant under the Plan and does not imply any right to
participate, or to be considered to participate in any later grant under the
Plan. Participation in the Plan does not create any right to, or expectation of,
continued employment.

         2.       Definitions. As used herein, the following definitions shall
                  apply:

                  (a)      "Administrator" means the Board or any of its
Committees as shall be administering the Plan, in accordance with Section 4 of
the Plan.

                  (b)      "Applicable Laws" means the requirements relating to
the administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

                  (c)      "Board" means the Board of Directors of the Company.

                  (d)      "Code" means the Internal Revenue Code of 1986, as
amended.

                  (e)      "Committee" means a committee of Directors appointed
by the Board in accordance with Section 4 of the Plan.

                  (f)      "Common Stock" means the common stock of the Company.

                  (g)      "Company" means Amkor Technology, Inc., a Delaware
corporation.

                  (h)      "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

                  (i)      "Director" means a member of the Board.

<PAGE>

                  (j)      "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

                  (k)      "Employee" means any person employed by the Company
or any Parent or Subsidiary of the Company. An Employee shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent,
any Subsidiary, or any successor. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.

                  (l)      "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  (m)      "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:

                           (i)      If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of determination (unless the date of
determination is not a market trading day, in which case the Fair Market Value
shall be the closing sales price on the last market trading day prior to such
date of determination), as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

                           (ii)     If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

                           (iii)    In the absence of an established market for
the Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

                  (n)      "Notice of Grant" means a written or electronic
notice evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement or
Restricted Stock Purchase Agreement.

                  (o)      "Option" means a nonstatutory stock option granted
pursuant to the Plan that is not intended to qualify, or which by its terms does
not so qualify, as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.

                  (p)      "Agreement" means a written or electronic agreement
between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.

                  (q)      "Option Exchange Program" means a program whereby
outstanding Options are surrendered or cancelled in exchange for Options of the
same type (which may have a lower exercise price or purchase price), of a
different type and/or cash.

                                       2

<PAGE>

                  (r)      "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.

                  (s)      "Optionee" means the holder of an outstanding Option
or Stock Purchase Right granted under the Plan.

                  (t)      "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (u)      "Plan" means this 2003 Nonstatutory Stock Plan.

                  (v)      "Restricted Stock" means Shares issued pursuant to a
Stock Purchase Right or Shares of restricted stock issued pursuant to an Option.

                  (w)      "Restricted Stock Purchase Agreement" means a written
or electronic agreement between the Company and the Optionee evidencing the
terms and restrictions applying to stock purchased under a Stock Purchase Right.
The Restricted Stock Purchase Agreement is subject to the terms and conditions
of the Plan and the Notice of Grant.

                  (x)      "Retirement" means an Optionee's ceasing to be a
Service Provider on or after the date when the sum of (i) the Optionee's age
(rounded down to the nearest whole month), plus (ii) the number of years
(rounded down to the nearest whole month) that the Optionee has provided
services to the Company equals or is greater than seventy-five (75).

                  (y)      "Rule 16b-3" means Rule 16b-3 of the Exchange Act or
any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.

                  (z)      "Section 16(b)" means Section 16(b) of the Exchange
Act.

                  (aa)     "Service Provider" means an Employee, Consultant or
Director.

                  (bb)     "Share" means a share of the Common Stock, as
adjusted in accordance with Section 13 of the Plan.

                  (cc)     "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant and Restricted Stock Purchase Agreement.

                  (dd)     "Subsidiary" means a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f) of the Code.

         3.       Stock Subject to the Plan. Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares that may be
optioned and sold under the Plan is 300,000 Shares, plus an annual increase to
be added as of January 1st of each year during the term of the Plan equal to the
lesser of (i) the number of Shares needed to restore the maximum aggregate
number of Shares which may be optioned and sold under the Plan to 300,000 or
(ii) a lesser amount determined by the Administrator. The Shares may be
authorized, but unissued, or reacquired Common Stock.

                                       3

<PAGE>

                  If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Stock Purchase Right,
shall not be returned to the Plan and shall not become available for future
distribution under the Plan, except that if unvested Shares of Restricted Stock
are repurchased by the Company, such Shares shall become available for future
grant under the Plan.

         4.       Administration of the Plan.

                  (a)      Procedure.

                           (i)      Multiple Administrative Bodies. The Plan may
be administered by different Committees with respect to different groups of
Service Providers.

                           (ii)     Rule 16b-3. To the extent desirable to
qualify transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

                           (iii)    Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

                  (b)      Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator shall have
the authority, in its discretion:

                           (i)      to determine the Fair Market Value;

                           (ii)     to select the Employees to whom Options and
Stock Purchase Rights may be granted hereunder;

                           (iii)    to determine the number of shares of Common
Stock to be covered by each Option and Stock Purchase Right granted hereunder;

                           (iv)     to approve forms of agreement for use under
the Plan;

                           (v)      to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Purchase Rights may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the Shares relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;

                           (vi)     to reduce the exercise price of any Option
or Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such

                                       4

<PAGE>

Option or Stock Purchase Right shall have declined since the date the Option or
Stock Purchase Right was granted;

                           (vii)    to institute an Option Exchange Program;

                           (viii)   to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan;

                           (ix)     to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of satisfying applicable foreign laws;

                           (x)      to modify or amend each Option or Stock
Purchase Right (subject to Section 15(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan;

                           (xi)     to allow Optionees to satisfy withholding
tax obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined. All elections by
an Optionee to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may deem necessary or advisable;

                           (xii)    to authorize any person to execute on behalf
of the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator; and

                           (xiii)   to make all other determinations deemed
necessary or advisable for administering the Plan.

                  (c)      Effect of Administrator's Decision. The
Administrator's decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options or Stock Purchase
Rights.

         5.       Eligibility. Options and Stock Purchase Rights may be granted
to Employees.

         6.       At-Will Employment. Neither the Plan nor any Option or Stock
Purchase Right shall confer upon an Optionee any right with respect to
continuing the Optionee's relationship as a Service Provider, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.

         7.       Term of Plan. The Plan shall become effective upon its
adoption by the Board. It shall continue in effect until terminated under
Section 15 of the Plan.

         8.       Term of Option. The term of each Option shall be stated in the
Option Agreement.

         9.       Option Exercise Price and Consideration.

                                       5

<PAGE>

                  (a)      Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator.

                  (b)      Waiting Period and Exercise Dates. At the time an
Option is granted, the Administrator shall fix the period within which the
Option may be exercised and shall determine any conditions that must be
satisfied before the Option may be exercised.

                  (c)      Form of Consideration. The Administrator shall
determine the acceptable form of consideration for exercising an Option,
including the method of payment. Such consideration may consist of (without
limitation):

                           (i)      cash;

                           (ii)     check;

                           (iii)    promissory note;

                           (iv)     other Shares provided Shares acquired from
the Company (directly or indirectly) (A) have been vested and owned by the
Optionee for more than six months on the date of surrender, and (B) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised;

                           (v)      consideration received by the Company under
a cashless exercise program implemented by the Company in connection with the
Plan;

                           (vi)     a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred compensation program
or arrangement;

                           (vii)    any combination of the foregoing methods of
payment; or

                           (viii)   such other consideration and method of
payment for the issuance of Shares to the extent permitted by Applicable Laws.

         10.      Exercise of Option.

                  (a)      Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.

                           An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised, together
with any applicable withholding taxes. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the

                                       6

<PAGE>

Optionee or, if requested by the Optionee, in the name of the Optionee and his
or her spouse. Until the Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 13 of the Plan.

                           Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

                  (b)      Termination of Relationship as a Service Provider. If
an Optionee ceases to be a Service Provider, other than upon the Optionee's
death or Disability, the Optionee may exercise his or her Option within such
period of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for three (3) months following the Optionee's termination. If, on
the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

                  (c)      Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

                  (d)      Death of Optionee. If an Optionee dies while a
Service Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

                                       7

<PAGE>

                  (e)      Retirement of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Retirement, the Options will
continue to vest for an additional twelve (12) months following the Optionee's
termination. The Optionee will have thirty (30) days following the initial
twelve (12) month period to exercise his or her Options. If, after termination,
the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

                  (f)      Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares an Option previously granted
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.

         11.      Stock Purchase Rights.

                  (a)      Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing or electronically, by means of a
Notice of Grant, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to purchase,
the price to be paid, and the time within which the offeree must accept such
offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

                  (b)      Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's service with the Company for any reason
(including death or Disability). Unless the Administrator provides otherwise,
the purchase price for Shares repurchased pursuant to the Restricted Stock
Purchase Agreement shall be the original price paid by the purchaser and may be
paid by cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at a rate determined by the Administrator.

                  (c)      Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion.

                  (d)      Rights as a Shareholder. Once the Stock Purchase
Right is exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

         12.      Non-Transferability of Options and Stock Purchase Rights.
Unless determined otherwise by the Administrator, an Option or Stock Purchase
Right may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option or Stock Purchase Right transferable, such
Option or Stock Purchase Right shall contain such additional terms and
conditions as the Administrator deems appropriate.

                                       8

<PAGE>

         13.      Adjustments Upon Changes in Capitalization, Dissolution,
Merger or Asset Sale.

                  (a)      Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of Shares subject to an Option or Stock
Purchase Right.

                  (b)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until ten (10) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option or Stock Purchase
Right shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option or Stock Purchase Right
will terminate immediately prior to the consummation of such proposed action.

                  (c)      Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of ninety (90) days from the date of such notice, and the Option or Stock
Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of

                                       9

<PAGE>

Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger or sale of assets, the consideration (whether stock, cash, or
other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

         14.      Date of Grant. The date of grant of an Option or Stock
Purchase Right shall be, for all purposes, the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.

         15.      Amendment and Termination of the Plan.

                  (a)      Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.

                  (b)      Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

         16.      Conditions Upon Issuance of Shares.

                  (a)      Legal Compliance. Shares shall not be issued pursuant
to the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with Applicable Laws and shall be further subject to the approval
of counsel for the Company with respect to such compliance.

                  (b)      Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.

         17.      Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

                                       10

<PAGE>

         18.      Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

                                       11

<PAGE>

                                   APPENDIX A

                  TERMS AND CONDITIONS FOR FRENCH OPTION GRANTS

         The Board of Directors of Amkor Technology, Inc. (the "Company") has
established the Amkor Technology, Inc. 2003 Nonstatutory Inducement Grant Stock
Plan (the "Inducement Option Plan") to provide an incentive to eligible
employees of the Company, its parent and subsidiary companies, including its
French subsidiary, Amkor Technology Euroservices, S.A.R.L. (the "Subsidiary").
The Administration has determined that it is necessary and desirable to
establish the terms and conditions for the French Option Grants to qualify for
the favorable tax and social security treatment in France provided under
articles 217, 80 bis I and II, and 163 bis C of the French tax code for options
granted under Law n degrees 70-1322 dated December 31, 1970, now codified at
articles L 225-177 to L 225-186 notably of the French Commercial Code, to
qualifying employees who are resident in France for French tax purposes (the
"French Optionees"). The terms and conditions for French Option Grants are set
forth in this Appendix A.

         Under the terms and conditions for French Option Grants, qualifying
employees will be granted only Nonstatutory Stock Options. The provisions of the
Inducement Option Plan concerning U.S. Incentive Stock Options are not
applicable to grants made hereunder.

         The following terms and conditions will apply in the case of Option
grants to French residents.

         1.       Definitions. As used herein, the following definitions will
apply:

                  (a)      "Applicable Laws" means the legal requirements
relating to the administration of stock option plans under French corporate,
securities, labor and tax laws.

                  (b)      "Disability" means total and permanent disability in
accordance with Section L341-4 second and third paragraphs of the French Code de
la Securite Sociale, as certified in writing by a physician from the French
Ministry of Labor ("medecin du travail").

                  (c)      "Employee" means (i) any person employed by the
Company or a Subsidiary in a salaried position within the meaning Applicable
Laws, who does not own more than 10% of the voting power of all classes of stock
of the Company, or any Parent or Subsidiary, and who is a resident of the
Republic of France or (ii) any person employed by the Company or a Subsidiary
who is a resident of the Republic of France for tax purposes or who performs his
or her duties in France and is subject to French income social security
contributions on his or her remuneration.

                  (d)      "Fair Market Value" means, as of any date, the dollar
value of Common Stock determined as follows:

<PAGE>

                           (i)      If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market of the Nasdaq Stock Market, its Fair
Market Value will be the average quotation price for the last 20 trading days
preceding the date of determination for such stock (or the average closing bid
for such 20 day period, if no sales were reported) as quoted on such exchange or
system and reported in The Wall Street Journal or such other source as the
Administrator deems reliable;

                           (ii)     If the Common Stock is quoted on the Nasdaq
Stock market (but not on the Nasdaq National Market thereof) or regularly quoted
by a recognized securities dealer but selling prices are not reported, its Fair
Market Value will be the mean between the high bid and low asked prices for the
Common Stock for the last 20 days preceding the date of determination; or

                           (iii)    In the absence of an established market for
the Common Stock, the Fair Market Value thereof will be determined in good faith
by the Administrator.

                  (e)      "Purchase Option" means the right to acquire Shares
that are repurchased by the Company prior to the grant of an Option.

                  (f)      "Subscription Option" means the right to subscribe to
newly issued Shares.

                  (g)      "Subsidiary" means any participating subsidiary of
the Company located in the Republic of France and that falls within the
definition of "subsidiary" within the meaning of Section L. 225-180 paragraph 1
of the French commercial code.

                  (h)      "Termination" means if the Optionee is an Employee,
the last day of any statutory or contractual notice period whether worked or not
(provided, only the employer, and not the Optionee, may decide whether the
Optionee works during the notice period) and irrespective of whether the
termination of the employment agreement is due to resignation or dismissal of
the Employee for any reason whatsoever; if the Optionee is a corporate officer
as defined in Section 2 of this Appendix A, Termination means the date on which
he or she effectively leaves his or her position as a corporate officer for any
reason whatsoever.

         2.       Eligibility. Options granted pursuant to this Appendix A may
be granted only to Employees, the President du conseil d'administration, the
membres du directoire, the Directeur general, the directeurs generaux delegues,
the Gerant of a company with capital divided by shares; provided, however, that
the administrateurs and the membres du conseil de surveillance who are also
Employees of the Subsidiary in accordance with a valid employment agreement
pursuant to Applicable Laws may be granted Options hereunder. For the purpose of
this Appendix A, when applicable, the rules set forth for an Employee shall be
applicable to the aforementioned corporate officers.

         3.       Stock Subject to the Plan. The total number of Options
outstanding which may be exercised for newly issued Shares may at no time exceed
that number equal to one-third of the Company's voting stock, whether preferred
stock of the Company or Common Stock. If any Optioned Stock is to consist of
reacquired Shares, such Optioned Stock must be purchased by the Company, in the
limit of 10% of its share capital, prior to the date of the grant of the
corresponding

                                       -2-

<PAGE>

new Option and must be reserved and set aside for such purposes. In addition,
the new Option must be granted within one (1) year of the acquisition of the
Shares underlying such new Option.

         4.       Limitations Upon Granting of Options.

                  (a)      Declaration of Dividend; Capital Increase. To the
extent applicable to the Company, Options cannot be granted during the 20
trading days from (i) the date the Common Stock is trading on an ex-dividend
basis or (ii) a capital increase.

                  (b)      Non-Public Information. To the extent applicable to
the Company, the Company shall not grant Options during the closed periods
required under Section L 225-177 of the French Commercial Code. As a result,
notwithstanding any other provision of the Plan, Options cannot be granted:

                           (i)      during the ten (10) trading days preceding
and following the date on which the consolidated accounts, or, if unavailable,
the annual accounts, are made public;

                           (ii)     during the period between the date on which
the Company's governing bodies (i.e., the Administrator and the Company's
corporate officers and directors) become aware of information which, if made
public, could have a material impact on the price of the Shares, and the date
ten (10) trading days after such information is made public.

                  (c)      Right to Employment. Neither the Plan nor any Option
shall confer upon any Optionee any right with respect to continuing the
Optionee's employment relationship with the Company or any Subsidiary.

         5.       Option Price. The exercise price for the Shares to be issued
pursuant to exercise of an Option will be determined by the Administrator upon
the date of grant of the Option and stated in the Option Agreement, but in no
event will be lower than eighty percent (80%) of the Fair Market Value on the
date the Option is granted or of the average purchase price of these Shares by
the Company. The Option Price cannot be modified while the Option is
outstanding, except as required by Applicable Laws.

         6.       Term of Option. The term of each Option shall be as stated in
the Option Agreement; provided, however, that the maximum term of an Option
shall not exceed ten (10) years from the date of grant of the Option.

         7.       Exercise of Option; Restriction on Sale.

                  (a)      Options granted hereunder may not be exercised prior
to the first anniversary date (the "Initial Exercise Date") of the date on which
the Option is granted whether or not the Option has vested prior to such time;
provided, however, that the Initial Exercise Date will be automatically adjusted
to conform with any changes under Applicable Laws so that the length of time
from the date of grant to the Initial Exercise Date when added to the length of
time in which Shares may not be disposed of after the Initial Exercise Date as
provided in Section 7(b) below, will allow for favorable tax and social security
treatment under Applicable Laws. Thereafter, Options

                                       -3-

<PAGE>

may be exercised to the extent they have vested. Options granted hereunder will
vest as determined by the Administrator.

                           An Option will be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised together
with any applicable withholding taxes and social security contributions. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder will exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
will issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 13 of the Plan.

                  (b)      The Shares subject to an Option may not be
transferred, assigned or hypothecated in any manner otherwise than by will or by
the laws of descent or distribution before the date three (3) years from the
Initial Exercise Date, except for any events provided for in Article 91 ter of
Annex II to the French tax code; provided, however, that the duration of this
restriction on sale will be automatically adjusted to conform with any changes
to the holding period required for favorable tax and social security treatment
under Applicable Laws to the extent permitted under Applicable Laws.

                  (c)      Termination of Employment Relationship. Upon
Termination of an Optionee's status as an Employee (other than upon the
Optionee's death or Disability), the Optionee may exercise his or her Option,
but only within thirty (30) days from the date of such Termination, and only to
the extent that the Optionee was entitled to exercise it at the date of
Termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). If, at the date of Termination,
the Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after Termination, the Optionee does not exercise his or her Option within the
time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

                  (d)      Disability of Optionee. Upon Termination of an
Optionee's status as an Employee terminates as a result of the Optionee's
Disability, the Optionee may exercise his or her Option at any time within
twelve (12) months from the date of such Termination, but only to the extent
that the Optionee was entitled to exercise it at the date of such Termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). If, at the date of Termination, the Optionee is
not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
Termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

                                       -4-

<PAGE>

                  (e)      Death of Optionee. Notwithstanding any provision of
the Plan or Option Agreement to the contrary and Section 7 hereof, the Option
shall be fully and immediately exercisable upon the death of an Optionee while
an Employee. Furthermore, notwithstanding any provision of the Plan or the
Option Agreement to the contrary, including the term of the Option, the Option
may be exercised at any time within twelve (12) months following the date of
death by the Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance. If, after death, the Optionee's estate or
a person who acquired the right to exercise the Option by bequest or inheritance
does not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall immediately revert to the
Plan.

                  (f)      Retirement of Optionee. If an Optionee ceases to be
an Employee as the result of the Optionee's Retirement, the Option may be
exercised for twelve (12) months following the Optionee's Termination. If, at
the time of Retirement, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. If, after Termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan. If an
Optionee ceases to be an Employee as a result of the Optionee's Retirement, the
Options will continue to vest for an additional twelve (12) months following the
Optionee's Termination. The Optionee will have thirty (30) days following the
twelve (12) month period after his or her Termination to exercise his or her
Options (but in no event later than the expiration of the term of such Option as
set forth in the Option Agreement).

         8.       Non-Transferability of Options. An Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.

         9.       Changes in Capitalization. Notwithstanding any provisions of
the Plan and the Option Agreement to the contrary, adjustments to the exercise
price and/or the number of shares subject to an Option issued hereunder shall be
made to preclude the dilution or enlargement of benefits under the Option in the
event the Company executes one or more of the transactions listed below. With
the exception of the transactions listed below, adjustments to the exercise
price and/or the number of shares subject to the Option issued hereunder shall
not be made under any circumstance. Furthermore, even upon occurrence of one or
more of the transactions listed below, no adjustment to the kind of shares to be
granted shall be made. The transactions are as follows:

                  (a)      an issuance of new shares for cash consideration
reserved to the Company's existing shareholders;

                  (b)      an issuance of convertible or exchangeable bonds
reserved to the Company's existing shareholders;

                  (c)      a capitalization of retained earnings, profits, or
issuance premiums;

                  (d)      a distribution of reserves by payment in cash or
shares;

                  (e)      a cancellation of shares in order to absorb losses;
and

                                       -5-

<PAGE>

                  (f)      a purchase, by the Company when listed, of its own
shares at a price higher than their then current quotation price.

                  An increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company is not within the scope
of the prohibition of the first paragraph of this Section 9.

         10.      Information Statements to Optionees. The Company or its French
Parent or Subsidiary, as required under Applicable Laws, will provide to each
Optionee, with copies to the appropriate governmental entities, such statements
of information as required by the Applicable Laws.

         11.      Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan will impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Any favorable amendments or alterations are automatically deemed to be approved
by Optionee. Termination of the Plan will not affect the Administrator's ability
to exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.

         12.      Reporting to the Shareholders' Meeting. The Subsidiary of the
Company, if required under Applicable Laws, will provide its shareholders with
an annual report with respect to Options granted and/or exercised by its
Employees in the financial year.

         13.      Interpretation. It is intended that Options granted under the
Terms and Conditions for French Option Grants shall qualify for the favorable
income tax and social security treatment applicable to stock options granted
under the French Commercial code as subsequently amended, and in accordance with
the relevant provisions set forth by French tax law and the French tax
administration. The terms of the French Plan shall be interpreted in accordance
with the relevant provisions set forth by French tax and social security laws,
as well as the French tax and social security administrations.

                  In the event of any conflict between the terms and conditions
for French Option Grants and the Option Plan, the terms and conditions for
French Option Grants shall control for any grants made thereunder.

                                      -6-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>w91175exv10w2.txt
<DESCRIPTION>AMEND #1 TO SECOND AMENDED & RESTATED CREDIT AGMT.
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

                               AMENDMENT NO. 1 TO
                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                  This AMENDMENT No. 1 TO THE SECOND AMENDED AND RESTATED CREDIT
AGREEMENT, dated as of October 17, 2003, among Amkor Technology, Inc. a Delaware
corporation (the "Borrower") and the Lenders (as defined below) party hereto and
the Administrative Agent (as defined below), amends certain provisions of the
Second Amended and Restated Credit Agreement dated as of April 22, 2003 (as
amended, the "Credit Agreement") among the Borrower, the lenders party thereto
(collectively the "Lenders"), the issuing banks party thereto, Citigroup Global
Markets, Inc. ("CGMI"), as sole book manager, Citicorp USA, Inc., as
administrative agent (in such capacity, the "Administrative Agent") and as
collateral agent (in such capacity, the "Collateral Agent"), Deutsche Bank
Securities Inc. ("DBSI), as documentation agent, CGMI and J.P. Morgan Securities
Inc., as joint lead arrangers, DBSI, as arranger, and JPMorgan Chase Bank, as
syndication agent.

                  PRELIMINARY STATEMENTS:

                  (1)      The parties to this Amendment are party to the Credit
Agreement. Capitalized terms defined in the Credit Agreement and not otherwise
defined in this Amendment are used herein as therein defined.

                  (2)      The parties hereto have agreed to amend the Credit
Agreement as hereinafter set forth.

                  SECTION 1.        AMENDMENTS. Subject to the satisfaction of
the conditions precedent set forth in Section 2 hereof, the Credit Agreement is
hereby amended as follows:

                  (a) AMENDMENTS TO ARTICLE I (DEFINITIONS AND ACCOUNTING
TERMS).

                           (i)      The definition of "EBITDA" in Section 1.1
(Certain Defined Terms) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

                           "EBITDA" means, for any period, the sum, determined
         on a Consolidated basis and without any double-counting, of (a) Net
         Income, (b)(i) interest expense and (ii) amortization, write-off or
         cash payment of premiums, commissions, discounts and other fees and
         charges which, in each case pursuant to this clause (b)(ii), are
         attributable to the repayment, repurchase or redemption of Debt for
         Borrowed Money, (c) income tax expense, (d) to the extent included in
         Consolidated Net Income, non-cash foreign currency loss (or less any
         non-cash foreign currency gain), (e) to the extent included in Net
         Income, (i) non-cash equity in loss of Affiliates (or less any non-cash
         equity in income of Affiliates) and (ii) non-cash losses in respect of
         (A) fixed assets and (B) goodwill associated with acquisitions, (f)
         depreciation expense and (g) amortization expense, in each case of the
         Borrower and its Restricted Subsidiaries, determined in accordance with
         GAAP for such period.

                  (b) AMENDMENTS TO ARTICLE V (COVENANTS OF THE BORROWER).

                           (i)      The final paragraph of Section 5.2(f)
(Investments in Other Persons) of the Credit Agreement is hereby amended by
replacing, in the two places where it appears in such paragraph, the dollar
amount "$25,000,000" with the dollar amount "$50,000,000".

<PAGE>

                           (ii)     Section 5.2(j) (Prepayments, Etc., of Debt)
of the Credit Agreement is hereby amended by replacing clause (iv) thereof in
its entirety with the following clause (iv):

                  (iv)     the Borrower may repurchase or redeem Senior Notes
         for cash not exceeding (A) in the Fiscal Year ending December 31, 2003,
         $ 140,000,000 plus the amount of any Net Cash Proceeds arising from the
         sale of Anam Shares received by the Borrower during such Fiscal Year
         and (B) in any Fiscal Year thereafter, $100,000,000 plus the amount of
         any Net Cash Proceeds arising from the sale of Anam Shares received by
         the Borrower during such Fiscal Year; provided, however, that (1) up to
         $25,000,000 in the aggregate of the amount in this clause (iv) may be
         used by the Borrower to repurchase or redeem Subordinated Debt instead
         of repurchasing or redeeming Senior Notes; (2) to the extent the amount
         used by the Borrower to repurchase or redeem Senior Notes (or
         Subordinated Debt, as the case may be) pursuant to this clause (iv)
         during any Fiscal Year is less than the amount permitted for such
         Fiscal Year pursuant to this clause (iv), then the unused portion
         thereof in such Fiscal Year may be carried over and added to the amount
         permitted by this clause (iv) in any Fiscal Year thereafter; (3) in no
         event shall the amount used pursuant to this clause (iv) exceed
         $300,000,000 in the aggregate during the term of the Facilities; and
         (4) after giving effect to each such purchase or redemption made
         pursuant to this clause (iv), the Borrower shall be in compliance with
         Section 5.4(b);

                           (iii)    Section 5.2(j)(v) (Prepayments, Etc., of
Debt) of the Credit Agreement is hereby amended by inserting the phrase "or any
Subordinated Debt" immediately after the phrase "Senior Notes" in clause (x)
thereof.

                           (iv)     Section 5.2(o) (Capital Expenditures) of the
Credit Agreement is hereby amended by replacing such Section in its entirety
with the following Section 5.2(o):

                  (o) Capital Expenditures. Make, or permit any of its
         Restricted Subsidiaries to make, any Capital Expenditures that would
         cause the aggregate amount of all such Capital Expenditures made by the
         Borrower and its Restricted Subsidiaries in any Fiscal Year to exceed
         the greater of (i) the lesser of (x) 50% of EBITDA for such Fiscal Year
         (determined on a Pro Forma Basis) and (y) $350,000,000 and (ii)
         $250,000,000; provided, however, to the extent that actual Capital
         Expenditures for any such Fiscal Year is less than the maximum amount
         permitted by this clause (o), then the difference between the maximum
         amount permitted by this clause (o) and such actual Capital
         Expenditures may be carried over and made available for Capital
         Expenditures in the next succeeding Fiscal Year only, and such carried
         over portion shall be applied before the amount of Capital Expenditures
         otherwise permitted for such succeeding Fiscal Year pursuant to this
         Section 5.2(o);

                  SECTION 2.        CONDITIONS TO EFFECTIVENESS. This Amendment
shall become effective as of the date hereof on the date when the following
conditions precedent have been satisfied:

                  (a) the Administrative Agent shall have received counterparts
of this Amendment executed by the Borrower and the Required Lenders or, as to
any of the Lenders, evidence satisfactory to the Administrative Agent that such
Lender has executed this Amendment; and

                  (b) each Subsidiary Guarantor shall have executed a consent to
this Amendment in the form attached hereto.

Furthermore this Amendment is subject to the provisions of Section 8.1 of the
Credit Agreement.

                                        2

<PAGE>

                  SECTION 3.        CONSTRUCTION WITH THE LOAN DOCUMENTS.

                  (a) On and after the Amendment Effective Date, each reference
in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein," or
words of like import, and each reference in the other Loan Documents to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby, and this Amendment and the Credit Agreement shall be read
together and construed as a single instrument. The table of contents, signature
pages and list of Exhibits and Schedules of the Credit Agreement shall be
modified to reflect the changes made in this Amendment as of the Amendment
Effective Date.

                  (b) Except as expressly amended hereby or specifically waived
above, all of the terms and provisions of the Credit Agreement and all other
Loan Documents are and shall remain in full force and effect and are hereby
ratified and confirmed.

                  (c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Lenders, the Issuing Banks, the Arranger or
the Administrative Agent under any of the Loan Documents, nor constitute a
waiver or amendment of any other provision of any of the Loan Documents or for
any purpose except as expressly set forth herein.

                  (d) This Amendment is a Loan Document.

                  SECTION 4.        GOVERNING LAW. This Amendment is governed by
the law of the State of New York.

                  SECTION 5.        REPRESENTATIONS AND WARRANTIES. The Borrower
hereby represents and warrants that each of the representations and warranties
made by the Borrower in the Credit Agreement, as amended hereby, and the other
Loan Documents to which the Borrower is a party or by which the Borrower is
bound, shall be true and correct in all material respects on and as of the date
hereof (other than representations and warranties in any such Loan Document
which expressly speak as of a specific date, which shall have been true and
correct in all material respects as of such specific date) and no Default or
Event of Default has occurred and is continuing as of the date hereof.

                  SECTION 6.        EXECUTION IN COUNTERPARTS. This Amendment
may be executed in any number of counterparts and by different parties in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Signature pages may be detached from multiple separate counterparts
and attached to a single counterpart so that all signature pages are attached to
the same document. Delivery of an executed counterpart by telecopy shall be
effective as delivery of a manually executed counterpart of this Amendment.

                            [SIGNATURE PAGES FOLLOW]

                                        3

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

                                                 AMKOR TECHNOLOGY, INC.,

                                                 By ____________________________
                                                    Name:
                                                    Title:

                                                 CITICORP USA, INC.,
                                                 as Administrative Agent

                                                 By ____________________________
                                                    Name:
                                                    Title:

   [SIGNATURE PAGE To AMENDMENT No. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                     AIM FLOATING RATE FUND
                                     By: INVESCO Senior Secured Management, Inc.
                                         As Sub-Adviser

                                         By /s/ Joseph Rotondo
                                            -----------------------------------
                                            Name: Joseph Rotondo
                                            Title: Authorized Signatory

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                     AMARA-I FINANCE, LTD.
                                     By: INVESCO Senior Secured Management, Inc.
                                         As Financial Manager

                                           By /s/ Joseph Rotondo
                                              ---------------------------------
                                              Name: Joseph Rotondo
                                              Title: Authorized Signatory

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                     AMARA 2 FINANCE, LTD.
                                     BY: INVESCO Senior Secured Management, Inc.
                                         As Financial Manager

                                         By /s/ Joseph Rotondo
                                            -----------------------------------
                                            Name: Joseph Rotondo
                                            Title: Authorized Signatory

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                      Ares IV CLO Ltd

                                      By: Ares CLO Management IV, LP.,
                                          Investment Manager

                                      By: Ares CLO GP IV,LLC,
                                          Its Managing Member

                                      By: /s/ Seth J. Brufsky
                                          --------------------------------------
                                      Name: SETH J. BRUFSKY
                                      Title: VICE PRESIDENT

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                      Ares V CLO Ltd.

                                      By: Ares CLO Management V, L.P.,
                                          Investment Manager

                                      By: Ares CLO GP V, LLC,
                                          Its Managing Member

                                      By: /s/ Seth J. Brufsky
                                          --------------------------------------
                                      Name: SETH J. BRUFSKY
                                      Title: VICE PRESIDENT

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                      Ares VI CLO Ltd.

                                      By: Ares CLO Management VI, L.P.,
                                          Investment Manager

                                      By: Ares CLO GP VI, LLC,
                                          Its Managing Member

                                      By: /s/ Seth J. Brufsky
                                          --------------------------------------
                                      Name: SETH J. BRUFSKY
                                      Title: VICE PRESIDENT

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                      Ares VII CLO Ltd.

                                      By: Ares CLO Management VII, L.P.,
                                          Investment Manager

                                      By: Ares CLO GP VII, LLC.
                                          Its General Partner

                                      By: /s/ Seth J. Brufsky
                                          --------------------------------------
                                      Name: SETH J. BRUFSKY
                                      Title: VICE PRESIDENT

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                     AVALON CAPITAL LTD.
                                     By: INVESCO Senior Secured Management, Inc.
                                         As Portfolio Advisor

                                         By /s/ Joseph Rotondo
                                            ---------------------------------
                                            Name: Joseph Rotondo
                                            Title: Authorized Signatory

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                     AVALON CAPITAL LTD.
                                     By: INVESCO Senior Secured Management, Inc.
                                         As Portfolio Advisor

                                         By /s/ Joseph Rotondo
                                            ---------------------------------
                                            Name: Joseph Rotondo
                                            Title: Authorized Signatory

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                      BABSON CLO LTD. 2003-I
                                      By: David L. Babson & Company Inc.
                                          as Manager

                                      _________________________________________,
                                      as Lender

                                      By /s/ David P. Wells, CFA
                                         --------------------------------------
                                         Name: David P. Wells, CFA
                                         Title: Managing Director

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]
<PAGE>

                                        BILL & MELINDA GATES FOUNDATION
                                        By: David L. Babson & Company Inc. as
                                            Investment Adviser

                                        ______________________________________,
                                        as Lender

                                        By /s/ David P. Wells
                                           -----------------------------------
                                           Name:  David P. Wells, CFA
                                           Title:  Managing Director

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          Canadian Imperial Bank of Commerce,
                                          -----------------------------------
                                          as Lender

                                             By /s/ Marc Berg
                                                --------------------------------
                                                Name:  Marc Berg
                                                Title: Authorized Signatory

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                        Sankaty Advisors, LLC as Collateral
                                        Manager for CASTLE HILL I - INGOTS,
                                        LTD., as Term Lender

                                           ___________________________________,
                                           as Lender

                                           By /s/ Diane J. Exter
                                              --------------------------------
                                              Name:  DIANE J. EXTER
                                              Title: MANAGING DIRECTOR
                                                     PORTFOLIO MANAGER

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          Sankaty Advisors, LLC as Collateral
                                          Manager for CASTLE HILL II - INGOTS,
                                          LTD., as Term Lender

                                             ___________________________________
                                             as Lender

                                             By /s/ Diane J. Exter
                                                --------------------------------
                                                Name:  DIANE J. EXTER
                                                Title: MANAGING DIRECTOR
                                                       PORTFOLIO MANAGER

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                     CHARTER VIEW PORTFOLIO
                                     By: INVESCO Senior Secured Management, Inc.
                                         As Investment Advisor

                                        By /s/ Joseph Rotondo
                                           --------------------------------
                                           Name:  Joseph Rotondo
                                           Title: Authorized Signatory

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                             CITICORP USA, INC.,

                                             By /s/ [ILLEGIBLE]
                                                --------------------------------
                                                Name:
                                                Title:

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                             Cooksmill
                                             ----------------------------------,
                                             as Lender

                                             ___________________________________

                                             By /s/ Jon R.M Campbel
                                                --------------------------------
                                                Name:  Jon R.M Campbel
                                                Title: Authorized Signatory

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          Deutsche Bank Trust Company Americas,
                                          as Lender

                                          By /s/ Gregory P. Shefrm
                                             -----------------------------------
                                             Name:  Gregory P. Shefrm
                                             Title: Director

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          DIVERSIFIED CREDIT PORTFOLIO LTD.
                                             By: INVESCO Senior Secured
                                                 Management, Inc.
                                                 as Investment Adviser

                                             By /s/ Joseph Rotondo
                                                --------------------------------
                                                Name:  Joseph Rotondo
                                                Title: Authorized Signatory

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                            The Foothill Group, Inc.,
                                            -----------------------------------,
                                            as Lender

                                            By /s/ Sean T. Dixon
                                               --------------------------------
                                               Name:  Sean T. Dixon
                                               Title: Vice President

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

Franklin Floating Rate Trust               ___________________________________,
                                           as Lender
Franklin Floating Rate Master Series
                                           By /s/ Richard D'Addario
FRANKLIN FLOATING RATE                        --------------------------------
  DAILY ACCESS FUND                           Name:  Richard D'Addario
                                              Title: Senior Vice President
Franklin CLO II, Limited

Franklin CLO III, Limited

FRANKLIN CLO IV, LIMITED

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          Sankaty Advisors, LLC as Collateral
                                          Manager for GREAT POINT CLO 1999-1
                                          LTD., as Term Lender
                                          -------------------------------------,
                                          as Lender

                                             By /s/ DIANE J. EXTER
                                                --------------------------------
                                                Name:  DIANE J. EXTER
                                                Title: MANAGING DIRECTOR
                                                       PORTFOLIO MANAGER

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                             HARBOUR TOWN FUNDING LLC
                                             ------------------------,
                                             as Lender

                                             By /s/ Ann E. Morris
                                                --------------------------------
                                                Name:  ANN E. MORRIS
                                                Title: ASST VICE PRESIDENT

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          INVESCO EUROPEAN CDO I.S.A.
                                          By: INVESCO Senior Secured
                                                 Management, Inc.
                                                 As Collateral Manager

                                             By /s/ Joseph Rotondo
                                                --------------------------------
                                                Name:  JOSEPH ROTONDO
                                                Title: AUTHORIZED SIGNATORY

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                             JP Morgan Chase Bank
                                             --------------------,
                                             as Lender

                                             By /s/ William P. Rindfuss
                                                --------------------------------
                                                Name:  William P. Rindfuss
                                                Title: Vice President

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          Long Lane Master Trust IV
                                          By Flast National Bank
                                          as trust Administrator

                                             __________________________________,
                                             as Lender

                                             By /s/ Michael J. Sullivan
                                                --------------------------------
                                                Name:  Michael J. Sullivan
                                                Title: Vice President

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          MASSACHUSETTS MUTUAL LIFE INSURANCE
                                          COMPANY
                                          By: David L. Babson & Company Inc. as
                                          Investment Adviser

                                          _____________________________________,
                                          as Lender

                                          By /s/ David P. Wells
                                             -----------------------------------
                                             Name:  David P. Wells, CFA
                                             Title: Managing Director

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                     OASIS COLLATERALIZED HIGH INCOME
                                     PORTFOLIOS-I LTD.
                                     By: INVESCO Senior Secured Management, Inc.
                                          As Sub-Advisor

                                        By /s/ Joseph Rotondo
                                           --------------------------------
                                           Name:  Joseph Rotondo
                                           Title: Authorized Signatory

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          OCTAGON INVESTMENT PARTNERS V. LTD.
                                          By: Octagon Credit Investors, LLC
                                              as Portfolio Manager

                                             __________________________________,
                                             as Lender

                                             By /s/ Michael B. Nechamkin
                                                --------------------------------
                                                Name: Michael B. Nechamkin
                                                Title: Portfolio Manager

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          Sankaty Advisors, LLC as Collateral
                                          Manager for Race Point CLO, Limited,
                                          as Term Lender
                                             ----------------------------------,
                                             as Lender

                                             By /s/ Diane J. Exter
                                                --------------------------------
                                                Name:  DIANE J. EXTER
                                                Title: MANAGING DIRECTOR
                                                       PORTFOLIO MANAGER

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC.
                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>
`
                                         Sankaty Advisors, LLC as Collateral
                                         Manager for Race Point II CLO,
                                         Limited, as Term Lender
                                            -----------------------------------,
                                            as Lender

                                            By /s/ Diane J. Exter
                                               --------------------------------
                                               Name: DIANE J. EXTER
                                               Title: MANAGING DIRECTOR
                                                      PORTFOLIO MANAGER

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          SANKATY HIGH YIELD PARTNERS III, L.P.

                                             __________________________________,
                                             as Lender

                                             By /s/ Diane J. Exter
                                                --------------------------------
                                                Name:  DIANE J. EXTER
                                                Title: MANAGING DIRECTOR
                                                       PORTFOLIO MANAGER

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]

<PAGE>

                                          SARATOGA CLO I, LIMITED
                                          By: INVESCO Senior Secured Management,
                                              Inc.
                                              As Asset Manager

                                              By /s/ Joseph Rotondo
                                                 -------------------------------
                                                 Name:  Joseph Rotondo
                                                 Title: Authorized Signatory

            [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]
<PAGE>

                                          Seaboard CLO 2000 Ltd.
                                          By: David L. Babson & Company Inc. as
                                          Collateral Manager

                                          By: __________________________________
                                          as Lender

                                          By /s/ David P. Wells
                                             ----------------------------------
                                             Name: David P. Wells, CFA
                                             Title: Managing Director

  [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                          SEQUILS-LIBERTY, LTD.
                                          By: INVESCO Senior Secured Management,
                                              Inc. As Collateral Manager

                                          By /s/ Joseph Rotondo
                                             -----------------------------------
                                             Name: Joseph Rotondo
                                             Title: Authorized Signatory

  [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                          SIMSBURY CLO, LIMITED
                                          By: David L. Babson & Company Inc.
                                          under delegated authority from
                                          Massachusetts Mutual Life Insurance
                                          Company as Collateral Manager as
                                          Lender

                                          By  /s/ David P. Wells
                                             -----------------------------------
                                             Name: David P. Wells, CFA
                                             Title: Managing Director

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                        Stanfield Arbitrage CDO, LTD.
                                        By: Stanfield Capital Partners LLC
                                            as its Collateral Manager

                                        ______________________________________,
                                        as Lender

                                        By  /s/ Christopher A. Bondy
                                            ----------------------------------
                                            Name: Christopher A. Bondy
                                            Title: Partner

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                        Stanfield Carrera CLO, Ltd.
                                        BY: Stanfield Capital Partners LLC
                                        as its Asset Manager

                                           ___________________________________,
                                           as Lender

                                        By /s/ Christopher A. Bondy
                                           ----------------------------------
                                           Name: Christopher A. Bondy
                                           Title: Partner

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                       STEIN ROE & FARNHAM CLO I LTD.

                                       By: Columbia Management Advisors, Inc.
                                       (f/k/a Stein Roe & Farnham Incorporated),
                                       As Portfolio Manager

                                          _____________________________________,
                                          as Lender

                                       By  /s/ Kathleen A. Zarn
                                           ----------------------------------
                                           Name: Kathleen A. Zarn
                                           Title: Senior Vice President

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                        SUFFIELD CLO, LIMITED
                                        By: David L. Babson & Company Inc. as
                                        Collateral Manager

                                        ______________________________________,
                                        as Lender

                                        By /s/ David P. Wells
                                            ----------------------------------
                                            Name: David P. Wells, CFA
                                            Title: Managing Director

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                        THE TRAVELERS INSURANCE COMPANY

                                            ___________________________________,
                                            as Lender

                                        By  /s/ Matthew J. McInerny
                                            ----------------------------------
                                            Name: Matthew J. McInerny
                                            Title: Investment Officer

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                        TRS 1 LLC
                                        --------------------------------------,
                                        as Lender

                                        By  /s/ Alice L. Wagner
                                            ----------------------------------
                                            Name: Alice L. Wagner
                                            Title: Vice President

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                          TRS CALLISTO LLC, as Lender

                                          By  /s/ Alice L. Wagner
                                              ----------------------------------
                                              Name: Alice L. Wagner
                                              Title: Vice President

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                                        TRYON CLO LTD. 2000-I
                                        ELC (CAYMAN) LTD. 2000-I

                                        ELC. (CAYMAN) LTD. CDO SERIES 1999-I
                                        ELC. (CAYMAN) LTD.
                                        APEX (IDM)CDO I, LTD.
                                        ELC (CAYMAN) LTD. 1999-II
                                        ELC (CAYMAN) LTD. 1999-III

                                        ______________________________________,
                                        as Lender

                                        By: David L. Babson & Company Inc. as,
                                            Collateral Manager

                                        By /s/ David P. Wells
                                            ----------------------------------
                                            Name: David P. Wells, CFA
                                            Title: Managing Director

   [SIGNATURE PAGE TO AMENDMENT NO. 1 AMKOR TECHNOLOGY INC. SECOND AMENDED AND
                           RESTATED CREDIT AGREEMENT]

<PAGE>

                         CONSENT OF SUBSIDIARY GUARANTOR

                                     Dated as of [_______________________], 2003

                  Each of the undersigned corporations, as a Subsidiary
Guarantor under the Subsidiary Guaranty dated April 28, 2000 (as confirmed by
the Guaranty and Security Confirmation dated as of April 22, 2003, the
"Subsidiary Guaranty") in favor of the Secured Parties under the Credit
Agreement referred to in the foregoing Amendment, hereby consents to such
Amendment and hereby confirms and agrees that notwithstanding the effectiveness
of such Amendment, the Subsidiary Guaranty is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects, except
that, on and after the effectiveness of such Amendment, each reference in the
Subsidiary Guaranty to the "Credit Agreement", "thereunder", "thereof" or words
of like import shall mean and be a reference to the Credit Agreement, as amended
by such Amendment.

                                          GUARDIAN ASSETS, INC.

                                          By: __________________________________
                                              Name:
                                              Title:

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>5
<FILENAME>w91175exv12w1.txt
<DESCRIPTION>COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES.
<TEXT>
<PAGE>

                                                                    EXHIBIT 12.1

                          AMKOR TECHNOLOGY, INC.
                  COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                     (IN THOUSANDS EXCEPT RATIO DATA)

<TABLE>
<CAPTION>
                                                                                                                 NINE MONTHS ENDED
                                                                     YEAR ENDED DECEMBER 31,                       SEPTEMBER  30,
                                                  --------------------------------------------------------------
                                                     1998         1999        2000          2001          2002          2003
                                                  ---------    ---------    ---------     ---------     ---------     ---------
<S>                                               <C>          <C>          <C>           <C>           <C>           <C>
Earnings
  Income (loss) before income taxes, equity in
   income  (loss) of investees, minority
   interest and discontinued operations           $  92,461    $  87,494    $ 173,154     $(438,498)    $(564,309)    $ (75,389)
  Interest expense                                   25,860       61,803      127,027       152,067       143,441       108,542
  Amortization of debt issuance costs                 1,217        3,466        7,013        22,321         8,251         6,871
  Interest portion of rent                            2,584        3,481        4,567         7,282         4,995         4,054
  Less (earnings) loss of affiliates                     --        2,622           --            --            --            --
                                                  ---------    ---------    ---------     ---------     ---------     ---------
                                                  $ 122,122    $ 158,866    $ 311,761     $(256,828)    $(407,622)    $  44,078
                                                  =========    =========    =========     =========     =========     =========
Fixed Charges
  Interest expense                                $  25,860    $  61,803    $ 127,027     $ 152,067     $ 143,441     $ 108,542
  Amortization of debt issuance costs                 1,217        3,466        7,013        22,321         8,251         6,871
  Interest portion of rent                            2,584        3,481        4,567         7,282         4,995         4,054
                                                  ---------    ---------    ---------     ---------     ---------     ---------
                                                  $  29,661    $  68,750    $ 138,607     $ 181,670     $ 156,687     $ 119,467
                                                  =========    =========    =========     =========     =========     =========
Ratio of earnings to fixed charges                     4.1x         2.3x         2.2x        --x(1)        --x(1)        --x(1)
                                                  =========    =========    =========     =========     =========     =========
</TABLE>

(1) The ratio of earnings to fixed charges was less than 1:1 for the nine months
ended September 30, 2003. In order to achieve a ratio of earnings to fixed
charges of 1:1, we would have had to generate an additional $75.4 million of
earnings in the nine months ended September 30, 2003. The ratio of earnings to
fixed charges was less than 1:1 for the year ended December 31, 2002. In order
to achieve a ratio of earnings to fixed charges of 1:1, we would have had to
generate an additional $564.3 million of earnings in the year ended December 31,
2002. 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 $438.5 million of
earnings in the year ended December 31, 2001.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>6
<FILENAME>w91175exv31w1.txt
<DESCRIPTION>CEO CERTIFICATION; JAMES KIM.
<TEXT>
<PAGE>
                                                                    EXHIBIT 31.1

SECTION 302(a) CERTIFICATION


I, James J. Kim, certify that:

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

2.    Based on my knowledge, this quarterly 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 quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly 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
      quarterly report;

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

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

      b)    Evaluated the effectiveness of the registrant's disclosure controls
            and procedures and presented in this quarterly report our
            conclusions about the effectiveness of the disclosure controls and
            procedures, as of the end of the period covered by this quarterly
            report based on such evaluation; and

      c)    Disclosed in this quarterly report any change in the registrant's
            internal control over financial reporting that occurred during the
            registrant's most recent fiscal quarter (the registrant's fourth
            fiscal quarter in the case of an annual report) that has materially
            affected, or is reasonably likely to materially affect, the
            registrant's internal control over financial reporting; and

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

      a)    All significant deficiencies and material weaknesses in the design
            or operation of internal control over financial reporting which are
            reasonably likely to adversely affect the registrant's ability to
            record, process, summarize and report financial information; and

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

Date: November 3, 2003                          /s/ JAMES J. KIM
                                                ------------------------
                                                By:    James J. Kim
                                                Title: Chief Executive Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>7
<FILENAME>w91175exv31w2.txt
<DESCRIPTION>CFO CERTIFICATION; KENNETH T. JOYCE.
<TEXT>
<PAGE>

                                                                    EXHIBIT 31.2

SECTION 302(a) CERTIFICATION


I, Kenneth T. Joyce, certify that:

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

2.    Based on my knowledge, this quarterly 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 quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly 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
      quarterly report;

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

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

      b)    Evaluated the effectiveness of the registrant's disclosure controls
            and procedures and presented in this quarterly report our
            conclusions about the effectiveness of the disclosure controls and
            procedures, as of the end of the period covered by this quarterly
            report based on such evaluation; and

      c)    Disclosed in this quarterly report any change in the registrant's
            internal control over financial reporting that occurred during the
            registrant's most recent fiscal quarter (the registrant's fourth
            fiscal quarter in the case of an annual report) that has materially
            affected, or is reasonably likely to materially affect, the
            registrant's internal control over financial reporting; and

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

      a)    All significant deficiencies and material weaknesses in the design
            or operation of internal control over financial reporting which are
            reasonably likely to adversely affect the registrant's ability to
            record, process, summarize and report financial information; and

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

Date: November 3, 2003                          /s/ KENNETH T. JOYCE
                                                ------------------------------
                                                By:    Kenneth T. Joyce
                                                Title: Chief Financial Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>8
<FILENAME>w91175exv32.txt
<DESCRIPTION>CERTIFICATION OF CEO & CFO; SECTION 906.
<TEXT>
<PAGE>

                                                                      EXHIBIT 32

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      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 Quarterly
Report of Amkor Technology, Inc. on Form 10-Q for the three months ended
September 30, 2003 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-Q fairly presents in all material respects the financial condition
and results of operations of Amkor Technology, Inc.

                                                /s/ JAMES J. KIM
                                                ------------------------
                                                By:    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
Quarterly Report of Amkor Technology, Inc. on Form 10-Q for the three months
ended September 30, 2003 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-Q fairly presents in all material respects the financial
condition and results of operations of Amkor Technology, Inc.

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

</TEXT>
</DOCUMENT>
</SUBMISSION>
