Credit Suisse Technology Conference

Transcription

1 Credit Suisse Technology Conference November 2007 Oleg Khaykin Ken Joyce Jim Fusaro EVP & COO Chief Administrative Officer Corporate VP, Wire Bond Products

2 Forward Looking Statement Disclaimer All information and other statements contained in this presentation, other than statements of historical fact, constitute forward looking statements within the meaning of federal securities laws. These forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could affect our future results and cause actual results and events to differ materially from our historical and expected results and those expressed or implied in these forward looking statements. Our historical financial information, and the risks and other important factors that could affect the outcome of the events set forth in these statements and that could affect our operating results and financial condition, are contained in our filings with the Securities and Exchange Commission, including our Form 10-Q for the quarter ended September 30, We undertake no obligation to review or update any forward-looking statements to reflect events or circumstances occurring after this presentation. Guidance Policy Our financial guidance for the quarter is contained in our earnings release and is effective only on the date given. In accordance with our policy, we will not update, reaffirm or otherwise comment on any prior financial guidance in connection with this presentation Amkor Technology, Inc. Amkor Proprietary Business Information 2 Nov-07, OKHAY

3 Amkor s Role in the Semiconductor Value Chain Outsourced Semiconductor Assembly and Test (OSAT) Enabling semiconductor advancements To deliver physical world benefits 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 3 Nov-07, OKHAY

4 OSAT Industry Dynamics: Growth Outpacing That of the Industry By 2011, the OSAT market is projected to represent 49% of the total Assembly & Test market IDM 56% OSAT 44% OSAT 49% IDM 51% $19.2Bn OSAT market (12% CAGR) $33.5Bn $44.1Bn Total assembly & test market (8% CAGR) $68.5Bn Source: Gartner/Dataquest 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 4 Nov-07, OKHAY

5 OSAT Industry Dynamics: Consumer Spending Primary Driver of Industry Growth 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 5 Nov-07, OKHAY

6 OSAT Industry Dynamics: Demand Increasingly Tied to WW GDP 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 6 Nov-07, OKHAY

7 OSAT Industry Dynamics: Demand Growth Less Volatile Due to Diversification 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 7 Nov-07, OKHAY

8 Result: OSAT Becoming a Disciplined, Cash-Generating Industry $10.0 Capital Intensity of Top 4 OSATs Declining 50% Dollars in Billions $9.0 45% $8.0 $7.0 CapEx % of Revenue 40% 35% $6.0 30% $5.0 25% $4.0 20% $3.0 15% $2.0 10% $1.0 5% $ E Revenue CapEx CapEx % $1.2 0% Top 4 OSATs Generating Profits and Cash 30% $1.0 $0.8 25% $0.6 $0.4 Gross Margin % vs. Free Cash Flow 20% $0.2 $- $(0.2) % $(0.4) 10% Source: Company filings for AMKR, ASX, SPIL and STTS; CSFB Research. Gross Margins reconciled to US GAAP. $(0.6) $(0.8) 5% 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 8 Nov-07, OKHAY

9 Amkor Strategy and Competitive Positioning OSAT Partner of Choice Technology leadership Driving technology and product development to meet challenging end market demands Industry s leading innovator over the past seven years: MLF (QFN), POP, and FusionQuad Strategic alliances with Tier 1 IC companies and OEMs World class manufacturing infrastructure Strategic geographical footprint Operational scale and scope Competitive cost structure Operating Model Focused on Sustainable Growth Profitability and cash flow through industry cycles Capital deployment decisions based on ROIC Generating cash to fund growth, reinvestment and R&D and to service debt 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 9 Nov-07, OKHAY

10 Technology Leadership Innovative Packaging Solutions to Meet Evolving Application Needs Driven by the need for more I/Os and high performance Driven by the need for small size and low cost 1970s 1980s 1990s 2000s DIP PGA BGA SiP QFP LCC FBGA / CSP SOP TQFP / FQFP SSOP / TSOP 3D Pkg QFN WLCSP FC DLP TouchChip Stacked Die CSP Package-on-Package PoP 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 10 Nov-07, OKHAY

11 Investment Focus on Advanced Technologies 1. Flip Chip: Turnkey Solutions 1. Bump 2. Probe 3. Assembly 4. Final Test Advanced silicon = increased electrical density Flip chip improves speed and electrical performance Graphics processors; networking & mobile applications driving flip chip adoption Industry FC Unit growth Source: Prismark Partners M Memory MPU ASIC DSP Chipsets Graphics Other 1.6 B Amkor Technology, Inc. Amkor Proprietary Business Information 11 Nov-07, OKHAY

12 Investment Focus on Advanced Technologies 2. Wafer Level Packaging Performance Improves heat dissipation for wireless applications Miniaturization Broad range of technologies and processes (e.g., Fan-out, TSV, etc.) to enable multi-die and SiP solutions Functionality Expands silicon functionality in wireless applications 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 12 Nov-07, OKHAY

13 Investment Focus on Advanced Technologies 3. 3-D Package Solutions Vertically stacking 2 or more die to increase functionality & reduce package footprint PoP package provides OEMs with a platform to cost effectively integrate logic + memory devices Turnkey capability for bottom and top package applications Broad portfolio of 3D package solutions 4SS-SCSP Stacked-SiP Package-on-Package (PoP) 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 13 Nov-07, OKHAY

14 Investment Focus on Advanced Technologies 4. Advanced Leadframes MicroLeadFrame / MLF Industry-leading QFN package Outstanding thermal and electrical properties Ideally suited for wireless and mobile applications Highly customizable, chip-scale sized Broad market adoption Amkor has strong IP position FusionQuad TM Leads on perimeter and bottom of package Hybrid package combines characteristics of QFN and QFP formats Accommodates higher I/O devices in reduced footprint Enhanced electrical and thermal performance Ideal for high frequency applications 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 14 Nov-07, OKHAY

15 Investment Focus on Advanced Technologies 5. System-in-Package (SiP) / MCMs Increased functionality + smaller size = increased silicon integration SiP / Modules provide Key Benefits: Reduced footprint Higher performance Lower system cost More efficient assembly Leveraging Amkor s Broad Technology, Product, and Capabilities Portfolio to Create System Level Solutions 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 15 Nov-07, OKHAY

16 Investment Focus on Advanced Technologies 6. Advanced Probe & Test Services Development services for integrated software and hardware solutions RF; mixed signal; digital; memory; strip test; advanced wafer probe Production test Final test; wafer probe; back-end services; drop ship Custom test processing Multiple binning / marking post test Failure Analysis X-ray; sem; liquid crystal; electron emission scope Flip Chip Wafer Probe RF Wafer Probe Advanced Test 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 16 Nov-07, OKHAY

17 Uniquely Positioned Within the IBM Ecosystem 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 17 Nov-07, OKHAY

18 Diversified Customer Base, Broad End Market Exposure HDTV Audio Game consoles Flash memory Consumer Auto/Other Air bag sensors On-board computers Medical equipment Avionics Computing Communications PCs Servers Peripherals Disk Drives USB Memory Mobile phones Networking Infrastructure Broadband access Top 10 Customers Represent ~45% of Revenues; None Over 10% 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 18 Nov-07, OKHAY

19 Strategically-Positioned Manufacturing Platforms Mainstream Manufacturing Platforms Mature High Growth Emerging/ Advanced Korea China Philippines Taiwan / Singapore Japan Market & Technology Focused Platforms 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 19 Nov-07, OKHAY

20 Strong Financial Performance Over the Past Two Years $700 28% Quarterly Revenue and Gross Profit $600 24% $500 20% $400 16% $300 12% $200 8% $100 4% $- Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Revenue Gross Profit Gross Margin % Consecutive Quarters of Free Cash Flow $110 0% $100 $90 $80 $70 $60 $50 $40 $30 $20 Dollars in Millions $10 Free Cash Flow = Cash from Operating Activities less Cap Ex $- Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3' Amkor Technology, Inc. Amkor Proprietary Business Information 20 Nov-07, OKHAY

21 Strategically Deploying CapEx Capital Expenditure decisions based on cash flow, ROIC and growth Addressing growth markets with all the key customers Avoiding defocusing and capital fragmentation by diversifying outside the core competences, e.g., Staying out of DRAM Vertically integrating into substrate manufacturing $700 35% Key investment areas: 1) Flip Chip 2) Wafer Level Packaging 3) 3-D Packaging 4) Advanced Leadframes 5) SiPs / MCMs 6) Advanced Probe and Test $600 $500 $400 $300 $200 Average CapEx % 30% 25% 20% 15% 10% $100 5% Dollars in Millions $- Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Revenue CapEx CapEx% 0% 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 21 Nov-07, OKHAY

22 Significantly Reducing Debt and Interest Expense Dollars in Millions After $88M 9.25% Senior Notes Due 2/2008, no Debt Payments Until 2011 $54M/Year Amortizing Debt $2,200 $2,100 $2,000 $1,900 $1,800 $46 $43 $40 $37 $34 $1,700 $31 Expect Interest Expense to be $28M lower in 2007 than 2006 $1,600 $1,500 $1,400 $1,300 $28 $25 $22 $19 $1,200 $16 $1,100 $13 $1,000 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 $10 Total Debt Interest Expense Debt Maturity Schedule ($ in millions) $482.6 $567.9 $400.0 $151.5 $27.7 $54.6 $54.7 $43.0 $21.4 $ Amkor Technology, Inc. Amkor Proprietary Business Information 22 Nov-07, OKHAY

23 Summary: Amkor Investment Thesis Increasing attractiveness of the OSAT industry Decreased volatility of end market demand Reduced capital intensity and improved profitability of the sector Greater IP intensity increasing value-add of assembly and test Growth rate exceeding overall industry, continued outsourcing trend by IDMs Amkor is well-positioned for success in OSAT Industry s innovator and technology leader Deep ties to tier-1 IC companies, foundries and OEMs Targeting attractive growth markets that generate returns and cash flow Strategically positioned manufacturing platforms Building a strong financial track record Free cash flow and healthy margins Capital investment discipline Improved capital structure Profitable through industry s down cycle 2007 Amkor Technology, Inc. Amkor Proprietary Business Information 23 Nov-07, OKHAY

24 Q & A