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Technology Stocks : Amkor Technology Inc (AMKR) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (653)	5/4/2000 3:12:00 PM
From: tech101	Read Replies (2) \| Respond to of 1056

Market Survival by: Aartvark (44/M/Atlanta, GA) 5/4/00 2:12 pm Msg: 13063 of 13066 The key to survival in this market is stock selection and knowing the difference between volatility and risk. Trading will make you money but will not make you wealthy. I choose the latter as I am building my retirement nest. Below I write some excerpts from BofA Montgomery analyst report on Amkor. Company visits reinforces bright outlook. Comfortable with 0.26 eps. First quarter is usually 10-20% seasonally down from the 4Q. Yet we are comfortable with the street and our number, flat with last quarter. This is essentially 10% higher due to execptionally strong demand and the secular trend outsourcing. The wind at their backs as strong half seasonality and new products kick in. It is easy to think that Amkor is simply the largest assembly and test company and is thus benefitting from strong industry conditions, the move to more outsourcing and capacity expansion. However the company is positioning itself for an acceleration based on competitive advantage as well. As strong as the first half is, Amkor is a major outsourc assembly provider to customers with normally strong seasonal demand in the second half. In addition, the second half will see a rapid proliferation of new, proprietary packaging technologies that further extend Amkor's lead in terms of size, performance, package innovation, and cost. The following products are expected to be significant hits starting in the second half on very visible wins with major customers: 1. VisionPak: these CMOS-based optical image sensors are enabling a whole new series of products. The company invented the technology that is allowing for ultra-low cost cameras of all types; toy, PC monitor, security, video and digital as examples. 2. Micro lead frame: these are small packages that are already a hit among analog manufacturers seeking further penetration in wireless technologies. The package gives the industries smallest form factor with low cost. amkor is expecting to do 6-10 million units per week by the 3Q from basically zero today. This could ramp up to 30-40 million units per week into 2001. (high margin products) 3. High density leadframe: this is not a new package technology rather a new manufacturing method. Quietly with no one looking, amkor spent $100 million reengineering its manufacturing lines to use high density leadframes to give a 30% cost reduction to traditional wire bonded devices. This translates into higher margins going forward and amkor taking the lead on price reductions. simply put, this is bad news for the second and third tier subcontract packaging companies as Amkor will likely gain market share at their expense. 4. Modules business on fire: Modules that allow for SiPs are taking off much faster than expected. SiPs allow for near SOC performance at much lower cost and time to market. Amkor currently has several customers that are in volume production. Amkor is actually putting customers on hold as they attempt to ramp up capacity to meet overwhelming demand. These modules are high value added items that generally are sole-sourced. 5. Adding testing capacity: the company is rapidly expanding its testing capacity and expects to double the number of units tested by the end of the year. the company is seeing a pickup of consignment business as customers exit the testing business and give it to Amkor. amkor enjoys the macro wind at its back. The semi cycle is in full expansion and the trend to outsourcing is accelerating. These factors play well, since Amkor holds a dominant market position in outsourced assemble and test. amkor's financial performance benefits from economies of scale, leading technology, broad product lines, and a customer desire for one stop shopping. As IDM and fabless customers seek to streamline their supply chain, Amkor is always one of the companies chosen. The major financial transaction with Anam coupled with major new product introductions scheduled throughout the year, suggest our financial model is conservative Upside to our estimates combined with a move to a valuation in line with comparables at 40x 2001 earnings should drive stock to at least our $75 price target. Nuff said. messages.yahoo.com