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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
February 28, 2000
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Date of Report (Date of earliest event reported)
AMKOR TECHNOLOGY, INC.
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
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0-29472 23-1722724
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(Commission File No.) (IRS Employer Identification Number)
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1345 Enterprise Drive
West Chester, PA 19380
(610) 431-9600
(Address of Principal Executive Offices)
(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS
On February 28, 2000, Amkor Technology, Inc. ("Amkor") issued a press
release (attached hereto as Exhibit 99.1) announcing that Amkor, through its
wholly-owned subsidiary, Amkor Technology Korea, Inc. ("Amkor Korea"), has
reached a definitive agreement with Anam Semiconductor, Inc. ("Anam") to acquire
Anam's three remaining semiconductor packaging and test facilities, known as K1,
K2 and K3, located in Korea, for up to $950 million in cash, plus the assumption
of certain liabilities. The closing of this acquisition is dependent upon a
number of conditions, including the approval of Amkor's board of directors
following satisfactory completion of due diligence by Amkor, arranging financing
on terms satisfactory to Amkor, receipt by Amkor Korea of a satisfactory
fairness opinion, receipt by Anam of approval by Anam's large bank creditors and
receipt by CIL Limited, the direct parent of Amkor Korea, of certain tax
exemptions in Korea in connection with the future operations of K1, K2 and K3.
The transaction will also require the approval of Amkor's shareholders and
Anam's shareholders.
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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 hereunto duly authorized.
AMKOR TECHNOLOGY, INC.
By: /s/ Kenneth T. Joyce
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Kenneth T. Joyce
Chief Financial Officer
Dated: March 1, 2000
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
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AMKOR TECHNOLOGY, INC.
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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99.1 Press release dated February 28, 2000.
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EXHIBIT 99.1
AMKOR TECHNOLOGY IN DEFINITIVE AGREEMENT TO ACQUIRE THREE PACKAGING FACTORIES
FROM ANAM SEMICONDUCTOR
WEST CHESTER, Pa.--(BUSINESS WIRE)--Feb. 28, 2000--Amkor Technology (Nasdaq:AMKR
- - news) today announced a definitive agreement with Anam Semiconductor, Inc.
(ASI) to acquire ASI's three remaining packaging and test factories (known as
K1, K2 and K3) located in Korea. In connection with the transaction, Amkor will
increase its ownership stake in ASI. The transaction, which is subject to
approval from the boards of directors and shareholders of both Amkor and ASI, is
expected to be completed in the second quarter of 2000.
The entire transaction, (i.e. the asset purchase plus the investment in ASI) is
valued at approximately $1.4 billion and involves the purchase of K1, K2 & K3
for $950 million, and the purchase of $459 million in newly issued shares of
ASI. This equity purchase effectively satisfies Amkor's prior commitment to
invest $150 million in ASI over several years, of which $42 million was invested
in October 1999. In connection with the transaction, ASI's creditor banks will
convert 150 billion Korean Won (approximately $132 million at current exchange
rates) of ASI debt into newly issued ASI shares.
Following completion of the transaction, Amkor will own approximately 42% of
ASI, whose principal operating asset is a world-class semiconductor wafer
foundry located in Buchon, Korea. Amkor expects to account for its equity
investment in ASI under the equity method of accounting.
James Kim, Amkor's Chairman and Chief Executive Officer, noted that "This
transaction is a major accomplishment for Amkor for several reasons. First, we
are acquiring three of the world's finest semiconductor assembly factories at a
very satisfactory valuation. During 1999 these factories generated EBITDA of
approximately $250 million, and they have what we believe is the industry's
largest base of established, fully qualified customers. Second, we solidify our
position as the world's largest provider of semiconductor packaging and test
services by assuming direct ownership of all our operating assets. As a result,
we will be able to take full advantage of the significant economic value these
assets bring to Amkor. In addition, by bringing these factories under the Amkor
umbrella, we eliminate concerns about access to our packaging assets, and we
enhance the profitability of our core business. Finally, our investment in a
restructured ASI will provide Amkor with a significant stake in what we believe
is an extremely valuable asset - the ASI wafer foundry. We look forward to
successfully completing this transaction and to welcoming the 6,600 employees at
K1, K2 and K3 into the Amkor family."
When the acquisition is completed, Amkor will own seven semiconductor packaging
and test facilities consisting of more than 3.5 million square feet of existing
manufacturing and support space, with an additional 1 million square feet of
manufacturing space available for expansion. In 1999, these seven factories
packaged approximately 4.1 billion semiconductor ICs, representing approximately
6% of the world's consumption of semiconductor chips.
Amkor expects to fund the transaction with the $410 million in private equity
capital already under agreement, plus debt.
ABOUT K1, K3 & K3
K1-Seoul, Korea 646,000 ft(2) - 3,300 employees-Leadframe
K2 - Buchon, Korea 264,000 ft(2) - 1,800 employees-Leadframe & Laminates
K3 - Bupyung, Korea 404,000 ft(2) - 1,500 employees-Advanced leadframe & Test
Located in and around Seoul, Korea, K1, K2 and K3 are established, world-class
semiconductor packaging and test facilities with approximately 1.3 million
square feet of total manufacturing space. Virtually the entire output of these
factories has historically been dedicated to Amkor through a long-term Supply
Agreement with ASI. During 1999 the three factories assembled more than 1.2
billion individual ICs, representing a comprehensive range of both traditional
and advanced package products.
For the twelve months ended December 31, 1999, K1, K2 & K3 contributed
approximately $785 million of Amkor's $1.6 billion in packaging and test
revenue. During this period, Amkor recognized a contractual gross margin of
approximately 11.5% on the revenue derived from K1, K2 and K3 under the terms of
the Supply Agreement. During the same period, these three factories operated
with gross margins similar to the gross margins achieved by Amkor's established
factories in the Philippines.
John Boruch, Amkor's president, said, "There are several additional benefits in
acquiring K1, K2 & K3. Since Amkor and ASI have worked closely together for more
than 30 years, we have intimate knowledge of their factory operations. As was
the case in our acquisition of ASI's K4 factory in 1999, there should be no
significant integration issues. In addition, having control of the ASI factory
operations will give Amkor greater flexibility in the management of equipment
and personnel across our entire asset base."
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Ken Joyce, Amkor's chief financial officer, noted that, "When the acquisition is
completed, we should achieve higher operating margins on our overall packaging
and test business, since the revenue derived from K1, K2 & K3 will no longer be
subject to a contractual gross margin. In addition, from a cash flow
perspective, we should generate significantly more EBITDA, which will facilitate
the repayment of debt expected to be incurred in this transaction."
ABOUT ASI'S SEMICONDUCTOR WAFER FOUNDRY
Established in 1998, the ASI fab is a 480,000 ft2 world-class wafer fabrication
foundry located in Buchon, Korea. The fab is currently producing 8-inch
semiconductor wafers using a range of sub-micron process technologies at the
0.35(mu)m, 0.25(mu)m, and 0.18um process levels. ASI recently commenced the
first phase of a project designed to ultimately expand the foundry's
semiconductor manufacturing capacity to approximately 30,000 wafer starts per
month from the current capacity of approximately 20,000 wafer starts per month.
ASI anticipates achieving production levels of 25,000 wafers per month sometime
in the second or third quarter of 2000, with higher production levels expected
in the third or fourth quarter of 2000. The additional wafer production will be
focused on logic devices at the 0.25(mu)m through 0.18(mu)m process levels.
For the year ended December 31, 1999, Amkor had foundry sales of $293 million.
Under a long-term supply agreement with ASI, Amkor has been responsible for
providing a range of engineering and marketing services for the foundry, and has
been selling the entire output of the foundry subject to a contractual gross
margin. Amkor expects to continue to sell the wafers produced by the ASI
foundry.
Amkor Technology, Inc. is the world's largest provider of contract
microelectronics manufacturing solutions. The company offers semiconductor
companies and electronics OEMs a complete set of microelectronic design and
manufacturing services, including deep submicron wafer fabrication; wafer probe,
characterization and reliability testing; IC packaging design and assembly;
multi-chip module design and assembly; and final testing. More information on
Amkor is available from the company's SEC filings and on Amkor's web site:
www.amkor.com. This news release may contain forward-looking statements - such
as (1) our belief that the acquisition of K1, K2, and K3 will have no
significant integration issues; (2) our expectations that, after the
acquisition, we will achieve higher operating margins and will generate
significantly more EBITDA, which will facilitate the repayment of debt expected
to be incurred in this transaction; and (3) our expectations that the ASI wafer
fab will achieve production levels of 25,000 wafers per month sometime in the
second or third quarter of 2000, with higher production levels expected in the
third or fourth quarter of 2000; that involve risks and uncertainties that could
cause actual results to differ from anticipated results. Further information on
risk factors that could affect the outcome of the events set forth in these
statements and that would affect the company's operating results and financial
condition is detailed in the company's filings with the Securities and Exchange
Commission, including the Report on Form 10-Q for the fiscal quarter ended
September 30, 1999.
Contact:
Amkor Technology
Jeffrey Luth, VP Investor Relations
610/431-9600, ext. 5613
[email protected]
