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

To: tech101 who wrote (678)	5/15/2000 4:40:00 PM
From: tech101	Respond to of 1056

AMKRCounts on Outsourcing Trend to ... by: amkr_investor 5/15/00 3:57 pm Msg: 13503 of 13504 Amkor Counts on Outsourcing Trend to Spur Future Growth Jeff Chappell May 09, 2000 --- Amkor Technology Inc. plans on a continued trend of device manufacturers outsourcing more and more packaging -- particularly for high-end, limited production devices such as ASICS -- to fuel the growth of the packaging company through the next decade. "Outsourcing is the way. Let the manufacturing specialists do their job," said John Boruch, president and chief operating officer of the Chandler, Ariz.-based company. Boruch and several fellow Amkor executives addressed members of the media and industry analysts Tuesday morning. The company sees a correlation between the explosion in electronics manufacturing services (EMS) and the packaging industry. "Now Amkor has moved into something that looks a whole lot like the EMS industry," said Bruce Freyman, vice president of Amkor product operations. Boruch said in 1998, 21 percent of device manufacturers outsourced packaging, and that number should grow to 28 percent in the next two years. Amkor predicts as much as 50 percent of packaging will be outsourced within the next five to 10 years. Boruch cited a recent announcement from Motorola Inc. that it wants to outsource as much as 50 percent of its manufacturing, including packaging. While many Asian manufacturers have embraced the practice from the start, Japanese companies traditionally have not. All but a small fraction of electronic packaging in Japan is done internally. But with Japan?s recent economic troubles and companies under pressure to become better performers financially, many Japanese companies are considering outsourced packaging as an option, Boruch said. Although nearly 80 percent of device manufacturers package their own products, Amkor also said nearly 80 percent of manufacturers that employ high-end packaging technologies introduced in the last five years are outsourcing their packaging. Freyman suggested the reason for the increase is twofold: the rise of fabless companies has spread the outsourced business model, and as devices become more complex, packaging correspondingly becomes more complex. "If a company is fabless, there?s a good chance the company is also package-less and design-less," Freyman said. As new packaging technologies are developed and device cycle times shrink, packaging devices in-house is becoming an increasingly less attractive option for manufacturers, because they can?t keep up with packaging technology and short product cycles. Furthermore, Freyman said that as Internet appliances and other consumer products such as cell phones and PDAs become more prevalent, custom packaging is becoming more necessary. "Virtually no plastic ball grid array is alike," he added. The demand for more complex packaging is also paving the way for what Amkor labels "system-in-package" (SIP), company executives said. "Some of the guys most interested in SIP are the so-called system-on-a-chip guys," Freyman said. "People are jazzed about this technology because instead of trying to do it at the wafer level, Amkor enables the industry to do SIP. All our customers care about is providing that solution to their end users." Amkor estimates the market for system-in-package products will soon top $1 billion, possibly within the next year. messages.yahoo.com