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


To: Artslaw who wrote (670)5/9/2000 12:44:00 AM
From: tech101  Read Replies (1) | Respond to of 1056
 
S&P rates, affirms Amkor Technology debt

(Press release provided by Standard & Poor's)
Tuesday April 11, 3:25 pm Eastern Time

NEW YORK, April 11 - Standard & Poor's today affirmed its double-'B'-minus corporate credit and senior unsecured debt ratings on Amkor Technology Inc. and its single-'B' subordinated debt rating on the company.

All ratings are removed from CreditWatch, where they had been listed with negative implications.

At the same time, Standard & Poor's assigned its single-'B' rating to Amkor's new $258 million convertible subordinated note issue and its double-'B' rating to the company's new $850 million bank loan package.

The outlook is stable.

The ratings affirmation reflects Standard & Poor's belief that Amkor will be able to integrate the acquired packaging facilities into its operations, that its increased level of ownership in Anam Semiconductor Inc. will not entail significant additional business risk, and that the company's financial profile will remain consistent with the rating level.

The ratings were placed on CreditWatch on Nov. 29, 1999, following the company's announcement that it intended to buy Anam's three Korea-based semiconductor packaging factories and increase its investment in Anam.

Following the transaction, Anam's principal asset will be its semiconductor wafer processing plant.

The CreditWatch listing reflected uncertainties about the cost and financing of the acquisition, as well as the lack of information about Anam's financial profile.

The acquisition and investment are being funded with $1 billion in new debt and $410 million in convertible preferred stock.

Amkor is buying Anam's ``K1,'' ``K2,'' and ``K3'' packaging factories for $950 million and is investing $500 million in Anam, after which it will own 43% of Anam's common equity, including previous investments.

The transaction accelerates Amkor's planned phased investment in Anam.

The packaging plants are being acquired for about 3.7 times (x) calendar year 1999 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $258 million.

The purchase of the three packaging plants enables Amkor to immediately capture all of their gross profits, rather than accruing contractual fees from Anam, at a time of strong industry recovery.

However, Amkor is also obligated to fund the capital expenditures necessary to expand the factories at a time of high demand.

Anam will employ the investment and proceeds from the sale of the packaging factories to repay most of its bank debt, while its creditor banks have agreed to convert a portion of their debt to equity and to terminate Anam's workout program. Amkor's fee for marketing Anam's wafer fabrication services, 10% to 13% of sales, remains unchanged.

In general, Standard & Poor's considers the semiconductor manufacturing industry to be riskier than the packaging sector because of its higher technology risk, more volatile sales and earnings, and less flexibility in capital expenditures.

However, this is mitigated by Texas Instruments Inc.'s (TI) seven-year commitment to purchase 40% to 70% of the factory's output in the form of digital signal processors, a key product for TI, using TI-supplied technology.

On a stand-alone basis, after the transaction, Anam has about $300 million in debt, and its financial profile is not seen as a burden to Amkor.

Standard & Poor's believes that Amkor does not intend to expand its position in the semiconductor industry beyond its current commitments to Anam.

Pro forma for the transactions and for a full year of ownership of the ``K4'' plant, which was acquired in May 1999, Amkor's EBITDA coverage of interest expense in 1999 was 3.3x, while debt was 2.7x EBITDA.

Amkor has generated more than $200 million in free operating cash flows in each of the past three years.

Anticipated future free cash flows are expected to permit the company to pay down outstanding balances in the term loans. The company's cash, about $127 million pro forma at Dec. 31, 1999, is supplemented by $100 million availability on in its $200 million borrowing-base revolving credit agreement.

The company's secured bank loan, consisting of the revolver and two term loan tranches, is rated one notch higher than the corporate credit rating.

The bank loans are secured by working capital and domestic fixed assets, the company's 43% equity in Anam, its ownership of domestic subsidiaries which indirectly own the company's international operating assets, and intercompany notes and guarantees from its subsidiaries.

Standard & Poor's believes that a distressed enterprise valuation would be sufficient to repay all amounts outstanding under the secured facilities.

A modest additional degree of support is provided by the company's 43% equity in Anam, due to the volatile market value of semiconductor wafer plants.

OUTLOOK: STABLE

The company's strong market position and current financial profile should provide protection during downcycles of the semiconductor industry.

The potential for future acquisitions of integrated device manufacturers' factories is likely to constrain ratings improvement beyond current levels, Standard & Poor's said.

biz.yahoo.com



To: Artslaw who wrote (670)5/11/2000 5:17:00 PM
From: tech101  Read Replies (1) | Respond to of 1056
 
Amkor Technology, Inc. Enabling the Microelectronic World
At a Glance

Amkor Technology is the world's largest independent provider of semiconductor packaging and test services, with 1999 revenue of $1.9 billion. Over the last five years, Amkor has enjoyed a 20 percent compounded annual growth rate. Amkor, which was founded in 1968, has more than 16,000 employees worldwide, and nearly twice the capacity and revenues of its nearest competitor.

Amkor provides more than 30 percent of the worldwide-outsourced market for semiconductor assembly and test, and 40 percent of the worldwide market for outsourced laminate-based ball grid array (BGA) packages. The company assembled more than four billion semiconductor ICs in 1999. Amkor has more than 190 customers including 37 of the 40 largest semiconductor companies.

The company provides packaging and test services through its three factories in the Philippines and four factories in Korea. Corporate headquarters are located in West Chester, Pennsylvania, with R&D, product and marketing operations based in Chandler, Arizona. In addition to its factories in Korea and the Philippines, other major Operations, Production and Sales offices are located at Santa Clara, Calif.; Irving and Austin, Texas; Boise, Idaho; Tokyo, Japan; Singapore; Taiwan and France.

Semiconductor companies are increasingly turning to third party specialists such as Amkor to provide assembly and test services. There are several reasons for this.

Shrinking device sizes are making the semiconductor assembly process more complex.

The increasing diversity and sophistication of microelectronic products requires a greater variety of advanced package types.

Many integrated semiconductor manufacturers are finding it difficult to achieve production economies in their captive assembly operations.

Semiconductor companies are focusing their efforts on product design and marketing, and are not investing in advanced packaging technology.

Finally, the growing number of "fabless" semiconductor companies has no manufacturing capacity at all, and must outsource their production.
Nearly all of the world's major semiconductor companies use independent packaging and test service providers for at least a portion of their packaging and test needs.

The Packaging Process
Semiconductor packaging has evolved from a simple mechanical solution to protect the delicate silicon die and that also provided sturdy electrical connections that could be soldered to a printed circuit board. Today's sophisticated packages may contain multiple die of various sizes, electro mechanical devices and units with several hundred leads. Consumer demand for highly sophisticated and ever smaller devices has made semiconductor packaging a vital contributor to system performance. Performance factors include the large number of interconnects associated with very complex ICs, high clock speeds and data rates, the growing need for very small packages in hand-held and wireless system-level products and the capability gap between board-level and chip-level interconnect. Amkor is an industry leader in finding packaging solutions to meet these complex requirements.

Amkor's Role in Semiconductor Manufacturing
Amkor's contributions to semiconductor packaging take place after wafers containing integrated circuit die have been fabricated and delivered to its packaging facilities. The first process validates the functionality of the arriving die through wafer-probe or wafer map testing. The wafer, which may hold up to 1,000 individual die, must then be separated into individual die.

The next step depends on the type of packaging and process that will be assembled: Wire bonding or flip chip.

Wire Bonding: After the die are attach to a carrier substrate using an epoxy adhesive, ultra-thin gold wire is carefully attached to bonding pads on the die and to similar pads on the substrate base to complete the electrical connection.

Flip Chip: Attachment of the die to the substrate base and electrical connections are accomplished at one time using a "flip chip" process. The interconnection between the die and the substrate is made through a conductive solder "bump" or "ball". The bumped die is then "flipped over" and placed face down, with the bumps providing electrical connections directly to the substrate.

Regardless of the attachment process, most die are then encapsulated in a plastic molding compound to form the package, which then goes through several additional finishing steps to prepare it for testing. Each device is tested using a sophisticated test platform and program to ensure compliance with end-use operating specifications, including functionality, voltage, current and timing. The completed devices are then delivered according to customer specifications. Delivery of the finished package to customers typically takes only 2 - 7 days after the die are received at the factory.

Among Amkor's core competencies are:

Laminate Products: These are the newest and fastest growth areas for the company, consisting of products incorporating a laminate or flexible circuit tape substrate. These include the ball grid array (BGA) format using an array of connections vs. traditional perimeter connections. BGA technology was introduced in the industry as a solution to problems associated with the increasingly high lead counts required for advanced semiconductors. As the number of leads increase, Amkor continues to develop new methods of maintaining the size of the package while ensuring electrical integrity.

Amkor's first product in this family was the plastic BGA (PBGA). Additional BGA packages now include features that enable low cost, high volume manufacturing methods as well as enhanced electrical and thermal performance. These new laminate and tape-based products include SuperBGA©, which includes a technology for heat dissipation and is designed for low profile, high power applications.

The second half of the laminate family includes chip scale packages (CSP). These include: ChipArray?, which allows the package to be as little as 1.5 mm larger than the chip itself; æBGA©, which is a tape-based package designed to be approximately the same size as the chip, and TapeArray BGA, another tape-based package, designed for very low profile and weight sensitive applications. Amkor is designing newer versions of BGA packages to enable further significant enhancements in the movement towards lighter, faster and lower cost packaging.

Leadframe Products: A die encapsulated in a plastic mold compound with metal leads surrounding the perimeter characterizes traditional leadframe products. This package type has evolved from packages designed for through-hole circuit board mounting to the more modern surface?mount design. Amkor offers a wide range of lead counts and body sizes within this product group to satisfy customer die size variations. The company also offers power versions of several leadframe packages that incorporate metal heat sinks for added thermal performance required by high-power ICs.

The need for thinner semiconductor packages with enhanced heat dissipation properties has led Amkor to develop newer, more advanced leadframe products. Thin Small Outline Package (TSOP), Think Shrink Small Outline Package (TSSOP) and Shrink Small Outline Package (SSOP) packages are significantly smaller than traditional Small Outline IC Package (SOIC) products, and the Thin Quad Flat Pack (TQFP) and Low Profile Quad Flat Pack (LQFP) packages are thin versions of the Metric Quad Flat Pack (MQFP) package.

Amkor also developed ePad? technology that allows the leadframe's metal die-attach paddle to remain exposed on the bottom of the package. This enables low-impedance when used as a ground and an efficient heat path when the metal pad is soldered to the system board. This industry breakthrough provides very high-speed performance (+ 2GHz) in a low cost format.

Amkor's newest leadframe package, the MicroLeadFrame?, combines the thermal and electrical advantages of ePad? technology with a very small footprint for a near chip size leadframe solution.

Amkor's Vision
Capitalize on the Outsourcing Trend: According to industry analysts, the outsourced assembly and test market is expected to grow rapidly, from $6 billion in 1999 to more than $16 billion in 2004. Amkor has become a trusted partner for most of the world's leading semiconductor companies and will continue to capitalize on the projected growth of the assembly and test segment.

Maintain Product Technology Leadership: Amkor is focusing design and development efforts on new technologies that will further advance the value of packaging and lead to total solutions for its customers. The company employs a staff of leading semiconductor packaging technologists and undertakes significant research and development activities.

Maintain Advanced Manufacturing Capabilities: Amkor's tradition of manufacturing excellence has been a key factor in its success in attracting and retaining customers, and it is committed to maintaining that high level of excellence. The company's development teams work with its customers, suppliers and others to develop new processing technologies and to pursue continuous improvements in the company's existing processing capabilities. These efforts have directly resulted in reduced time to market, increased quality, and lower manufacturing costs. Amkor factories are each ISO 9001, QS 9000 and ISO 14001 certified.

Leverage the Scale and Scope of the Company's Packaging and Test Capabilities: Amkor's size and position in the industry allow it certain advantages in procuring key materials and manufacturing equipment. The company's ability to capitalize on the substantial economies of scale that result from high utilization rates of its capital equipment, lowers its per unit manufacturing costs and facilitates cost?effective solutions for its customers.

The company offers more than 850 different package formats and sizes with a variety of processing and materials options, and adds new packaging options yearly, allowing Amkor to be a single source for many of its customers' packaging requirements. The company operates more than 525 product testers, making it a leader in test services, also.

Establish Industry Packaging Standards: By bringing new package concepts to market early, Amkor's designs tend to become industry standards. The company has formed teams focused on the latest industry developments, including gallium arsenide, silicon germanium, optics, micro-machine and lead-free packaging. It is one of the leading providers of advanced packaging solutions such as thin package formats and BGA packages with optical/imaging, System-in-Package (SiP) modules and 3D solutions.

Enhance Customer and Supplier Relationships: Amkor recognizes that its long?standing strategic relationships with leading semiconductor and electronics companies, its suppliers and other developers of new semiconductor technologies are key to staying ahead of the constantly advancing demand curve for packaging services and products. Enhancing those relationships and continued industry leadership in technology, manufacturing and test development is the guideline by which Amkor will pursue the future.

*æBGA is a registered trademark of Tessera, Inc.

amkor.com