March 7, 2001–Chandler, Arizona–Amkor Technology, Inc., announced that as a result of prolonged weakness in first-quarter business conditions, the company presently expects first quarter 2001 revenues to be below the guidance level given on January 31, 2001.
Amkor now expects first quarter assembly and test revenues to be approximately 15% to 17% below the fourth quarter of 2000, compared with earlier guidance of a 10% sequential decline. Wafer fab revenue is now expected to be approximately $45 million in the first quarter, compared with prior guidance of $55 million. Amkor reports that its customers’ business activity has continued to be impacted by the combined effect of a high degree of excess inventory within the electronics industry and a corresponding, broad-based economic slowdown.
Due to the high degree of operating leverage inherent in Amkor’s business, the lower revenue should reduce first quarter gross margin to approximately 17%. Amkor presently anticipates a first quarter profit from operations in the range of $20 to $25 million, excluding $31 million in goodwill and the amortization of $8 million in deferred debt issuance costs, before $39 million in interest expense, and before accounting for Amkor’s 42% share in the loss of Anam Semiconductor, Inc. (ASI). Amkor’s share of ASI’s first quarter loss is presently estimated to be approximately $25 million.
“This is a challenging period for the entire microelectronics industry, and is exacerbated by the lack of visibility throughout the supply chain,” says John Boruch, Amkor’s president. “While we will take advantage of opportunities to adjust our cost structure for the short-term, we are also acutely focused on improving our competitive advantages for the long-term. We intend to balance prudent operational management with our committed strategy of strengthening customer relationships, expanding our geographical presence, and extending our technology leadership.”