Amkor Technology Inc.

Transcription

1 Americas/United States Equity Research Semiconductor Equipment Rating NEUTRAL* Price (27 Jul 15, US$) 4.92 Target price (US$) (from 7.40) 5.50¹ 52-week price range Market cap. (US$ mn) 1, *Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector. ¹Target price is for 12 months. [V] = Stock considered volatile (see Disclosure Appendix). Share price performance Research Analysts Randy Abrams, CFA randy.abrams@credit-suisse.com Farhan Ahmad farhan.ahmad@credit-suisse.com Nickie Yue nickie.yue@credit-suisse.com Daily Jul 28, Jul 27, 2015, 7/28/14 = US$9.8 4 Jul-14 Oct-14 Jan-15 Apr-15 Price Indexed S&P 500 INDEX On 07/27/15 the S&P 500 INDEX closed at Quarterly EPS 1Q 2Q 3Q 4Q 2013A E E (AMKR.OQ) DECREASE TARGET PRICE Outlook consistent for another slow quarter 2Q15 sales at the low end of guidance. Amkor's sales and profitability were below our lowered preview numbers of 15 July. Sales were US$737 mn, down 1% QoQ (vs -2% to +4% guidance) on Android weakness, excess fabless inventory, and lackluster PC/tablets. Lower sales impacted GM/OpM by -260 bp/-210 bp to 15.6%/5.2%, taking EPS to.04 below its guidance. Equipment capex was cut from US$450 mn to US$400 mn (-38% YoY), plus US$150 mn was provided for K5, keeping FCF slightly negative. Correction extends into 3Q15, but Apple boosts the 4Q outlook. 3Q15 sales were guided to be -5% to +2% QoQ, below our lowered +6% QoQ and the street's +11% QoQ estimates, keeping GMs at 13-16% vs our prior estimate of 19% and the street's 20%. Sales are falling the sharpest in mobile on Android weakness, although consumer (TV/STB) is lower and broad-based IDMs are staying more conservative. Off the lower base, we model 7% QoQ growth in 4Q15 due to double-digit exposure to Apple with the AP, baseband, connectivity, sensors, and analog. Targeting mild core growth in 2016 with a lift from J-Devices. We model +7% YoY Amkor base business plus US$1.02 bn consolidating J-Devices to drive 41% consolidated sales growth in Key targets will be WL CSP for mobile (15-20% of sales), China/Taiwan (5% of sales), automotive (>10% of sales), "SLIM and SWIFT" high-end packages, and continued growth from memory (now 14% of sales). Inventory should also be more of a tailwind. Reduce TP from US$7.40 to US$5.50 weakness getting priced in. On the softer outlook, we trim our 2015/16E EPS from US.62/0.70 to US.35/0.55. Our industry view remains muted due to higher fabless inventory, although a slowdown in consumer tech is increasingly getting priced in. We stay NEUTRAL with a lowered TP of US$5.50 (from US$7.40), based on 10x 2016E EPS and 1.0x forward P/B. Its valuation is at the low end of its trading range 0.8x EV/sales (vs x) and 3.2x EV/EBITDA (vs x). Financial and valuation metrics Year 12/13A 12/14E 12/15E 12/16E EPS - (Excl. ESO) (US$) EPS (CS adj.) (US$) Prev. EPS (CS adj.) (US$) P/E (CS adj., x) P/E rel. (CS adj., %) Revenue (US$ m) 2, , , ,202.7 EBITDA (US$ m) Net debt (US$ m) 1,040 1,078 1,126 1,157 OCFPS (US$) P/OCF (x) Number of shares (m) Price/sales(x) 0.37 BV/share (Next Qtr., US$) 4.5 P/BVPS (x) 0.98 Net debt (Next Qtr., US$ m) 1,021.3 Dividend (current, US$) 1.0 Dividend yield (%) 20.3 DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION Client-Driven Solutions, Insights, and Access

2 F1998 F1999 F2000 F2001 F2002 F2003 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015E F2016E Sep-05 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 May-12 Oct-12 Mar-13 Aug-13 Jan-14 Nov-14 Apr-15 Sep-15 Jan-01 Aug-01 Mar-02 Oct-02 May-03 Dec-03 Jul-04 Feb-05 Sep-05 Apr-06 Nov-06 Jun-07 Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 Apr-13 Nov-13 Jan-15 Aug-15 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec July 2015 Focus tables and charts Exhibit 1: Amkor June results and September guidance light; revising down 2015/16 estimates AMKR Jun-15 Sep-15 F2015E F2016E Actual CS Old Cons Guidance CS CS Old Cons Guidance CS CS Old Cons CS CS Old Cons Total Revenue $736.7 $750.3 $750.0 $ mn $725.7 $796.8 $820.0 $ mn $2,981.7 $3,118.7 $4,042.0 $4,202.7 $4,439.4 $4,006.5 % Q/Q chng -0.8% 1.0% 1.0% -2% to +4% -1.5% 6.2% 11.3% -5% to +2% % Y/Y chng -4.0% -2.2% -2.3% -10.7% -2.0% 0.9% -4.7% -0.3% 29.8% 40.9% 42.3% -0.9% Total GM* 15.6% 18.2% 17.8% 16-19% 15.0% 19.4% 20.9% 13-16% 16.8% 19.0% 19.5% 16.7% 17.5% 21.3% Operating Exp.* $76.5 $81.4 $78.5 $82.2 $315.2 $327.9 $413.5 $431.8 Operating Mgin* 5.2% 7.3% 7.0% 4.1% 9.0% 10.6% 6.3% 8.5% 8.8% 6.8% 7.8% 10.2% Net Income* $9.6 $27.0 $23.7 $12-$35mn $10.7 $41.1 $50.2 $7mn-$14mn $83.2 $147.0 $189.0 $131.5 $167.0 $225.3 Net Margin* 0.0% 0.0% 3.2% 1.5% 5.2% 6.1% 2.8% 4.7% 4.7% 3.1% 3.8% 5.6% EPS* Fully diluted shares , Bloomberg consensus Exhibit 2: Industry equipment orders declining in 2H15 Stock Price Equipment Bookings (US$ mn) Exhibit 3: GMs lower in 2Q/3Q on the weaker outlook US$K GM (% $900, % $750, % $600, % $450, % $300, % $150, % 0.0% -$150, % BE Bookings AMKR Stock Revenue GM% OpM%, SEMI Exhibit 4: FCF slightly negative due to K5's construction Capex (US$ mn) FCF (US$mn) $ $ $ $ $ $ $ Exhibit 5: AMKR EV/EBITDA now at lower levels EV/EBITDA Operating CF Capex FCF EV/EBITDA Exhibit 6: Amkor at a valuation discount but also has a lower ROE now Price Mkt Cap EV/Sales (x) EV/EBITDA (x) P/E Multiple (x) P/B Multiple (x) ROE Company Ticker 7/28/2015 (US$mn) Select backend peers Amkor AMKR $4.25 $1, ASE 2311.TW $35.75 $8, SPIL 2325.TW $37.25 $3, Chipbond 6147.TWO $42.20 $ ChipMOS 8150.TW $32.20 $ Powertech 6239.TW $52.90 $1, Median Mean (AMKR.OQ) 2

3 Jan-01 Aug-01 Mar-02 Oct-02 May-03 Dec-03 Jul-04 Feb-05 Sep-05 Apr-06 Nov-06 Jun-07 Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 Apr-13 Nov-13 Jan-15 Aug-15 F1998 F1999 F2000 F2001 F2002 F2003 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015E F2016E 28 July 2015 Outlook consistent for another slow quarter ahead of the Apple builds Amkor remains a technology leader in back-end packaging and test, with more concentration on flip chip and wafer-level packaging (50% of revenue from advanced packaging, versus 30% for ASE and SPIL), and most of its smartphones positioning is at the higher end of the mobile market. In the near term, that high-end exposure is triggering weakness as Samsung has shifted business from Amkor's top customer Qualcomm (17% of sales in 2014) to its own internal silicon that is packaged mostly in-house in its back-end facilities, and the other Android brands are seeing compression as mobile growth slows, tablets decline and Apple takes more value share. Beyond Android smartphones, Amkor is facing a more muted outlook from its broader customer base, which we note (quarter-to-date) across fabless and IDMs' reporting their managements have guided 2Q15 sales on average to be down 2% QoQ, vs the normal 3-5% QoQ growth, and inventory to be up a day to 94 days, up 16 days from last year, which was more than the normal level. Amkor trimmed its 3Q15 revenue outlook to -5% to +2% QoQ for 3Q15 vs the normal high-single-digit seasonality due to pullbacks from mobile and consumer, and a bit of softness in the broad-based business, taking GMs down to 13-16% and EPS to -US.03 to -US.06. The company should post mild growth in 4Q15 as it ramps up Apple component orders for iphone 6S. Equipment capex was also cut from US$450 mn to US$400 mn, plus $150 mn was provided for facility investment in K5 in Korea. The company should have relatively stable equipment investment next year but will still need to spend US$200 mn to complete the construction of K5, pushing out positive FCF to For 2016, we model a better year, with a +7% YoY Amkor base business plus a US$1.02 bn consolidating J-Devices driving 41% consolidated sales growth in Key targets will be WL CSP for mobile (15-20% of sales), China/Taiwan (5% of sales), automotive (>10% of sales), "SLIM and SWIFT" high-end packages, and continued growth from memory (now 14% of sales). Inventory should also move from a headwind to a tailwind. On the softer outlook, we trim our 2015/16E EPS from.62/0.70 to.35/0.55. Our industry view remains muted due to higher fabless inventory and a slowdown in consumer tech, although these are increasingly getting priced in. We maintain our NEUTRAL rating with a lower TP of US$5.50 (from US$7.40), based on 10x 2016E EPS and 1.0x forward P/B. The valuation is at the low end of its trading range 0.8x EV/sales (vs x) and 3.2x EV/EBITDA (vs x). This, in our view, is reasonable, although with growth staying muted due to the mixed tech outlook the stock may remain range-bound, with a possible trade into the iphone ramp-up in 4Q15 and 1Q16 restocking as Amkor is maintaining a pretty good share of the Apple processor business and peripheral component orders. Amkor has the leading technology but is being impacted by slowing mobile and excess inventory Amkor should return to mild growth in 2016 and have incremental earnings from the consolidation of J- Devices Reducing estimates on the lower sales outlook Exhibit 7: Industry equipment orders declining in 2H15 Stock Price Equipment Bookings (US$ mn) Exhibit 8: FCF slightly negative due K5's construction Capex (US$ mn) FCF (US$mn) $ $ $ $ $ $ $ BE Bookings AMKR Stock Operating CF Capex FCF, SEMI (AMKR.OQ) 3

4 Summary of results and guidance 2Q15 results at the low end of the guidance range Amkor reported 2Q15 sales below expectations at US$737 mn, -0.8% QoQ and -4% YoY, at the low end of its guidance of -2% to +4% QoQ and CS/street estimates of +1% QoQ. The weakness was mainly due to softer demand from Qualcomm, general weakness from the Android camp across all tiers of smartphones, and lackluster demand from PCs and tablets. This profile is similar to peers with ASE also coming in below guidance and SPIL being at the low end of guidance. 2Q15 sales were still led by communications, although down slightly from 57% to 56%, mainly due to declines from mainstream, while advanced packaging held up relatively flat. On the positive side, NAND flash (14% of sales) is growing 20% YoY and MEMs (midsingle-digit percentage of sales) is also showing good growth, up 28% YoY, driven by IoTrelated applications, as the company works with customers to design modules integrating multiple sensors. Automotive demand is still holding up stable and on track for mild growth. Amkor has also grown its China business by 75% YoY to about 3-4% of sales, although the company has meaningful capacity scale in that market with its facility there contributing 20% to Amkor's total sales and providing a base for local Chinese companies to use its advanced packaging, and for overseas IDMs and fabless to have a broader localised supply chain in China. Exhibit 9: Amkor results and guidance vs its peers (US$ mn) Sales 2Q15 1Q15 QoQ 3Q15E 2Q15 QoQ Latest CS Guidance Amkor $737 $ % $726 $ % -1.5% Down 5% to up 2% ASE $37,833 $38, % $40,103 $37, % 6.0% July 30th SPIL $21,240 $20, % $21,608 $21, % 1.7% July 29th Stats $360 $ % $378 $ % 5.0% NA Due to the lower sales and weaker mix of advanced packaging, GMs came in below expectations at 15.6% vs the guidance of 16-19% and CS/street estimates of 18.5%/17.8%. Margins were lower as a result of worse-than-expected facility utilization, weaker product mix, particularly at the high end, and some fixed labour compensation increases. The company also acknowledged that pricing rebates are being offered more across the competitors, putting a slight downward pressure on margins vs the recent peak 4Q14 levels. Opex was managed at US$76.5 mn, below the CS estimate and 1Q15's US$81 mn as the company reversed a 1Q15 bonus accrual, given the business softened, although the underlying opex rate is in the US$78-80 mn/quarter range. The company also took a 1x (US.04 EPS) charge of US$9 mn for early extinguishment of debt to retire its 7.375% senior notes due in 2018 to save US$17 mn of annual interest expense. OpM reached 5.2%, below CS/street estimates of 7.7%/7.0%, taking its net income to US$9.6 mn and EPS to US.04, vs CS/street estimates of US.13/ Q15 at the low end of guidance GMs at the low end of guidance and down slightly on lower sales in 3Q15 (AMKR.OQ) 4

5 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec July 2015 Exhibit 10: June results at the low end, September guidance also light (US$ mn) AMKR Jun-15 Actual CS Old Cons Guidance CS CS Old Cons Guidance CS CS Old Cons Total Revenue $736.7 $750.3 $750.0 $ mn $725.7 $796.8 $820.0 $ mn $776.5 $828.7 $831.0 % Q/Q chng -0.8% 1.0% 1.0% down 2% to up 4% -1.5% 6.2% 11.3% Down 5% to up 2% 7.0% 4.0% 1.3% % Y/Y chng -4.0% -2.2% -2.3% -10.7% -2.0% 0.9% -9.0% -2.9% -2.6% Total GM* 15.6% 18.2% 17.8% 16-19% 15.0% 19.4% 20.9% 13-16% 18.4% 20.3% 21.3% R&D Expense* $20.0 $18.1 $20.6 $18.3 $20.8 $18.6 SG&A Expense* $56.4 $63.3 $58.0 $63.9 $58.5 $64.8 Operating Exp.* $76.5 $81.4 $78.5 $82.2 $79.3 $83.4 Operating Mgin* 5.2% 7.3% 7.0% 4.1% 9.0% 10.6% 8.2% 10.2% 11.0% Net Income* $9.6 $27.0 $23.7 $12-$35mn $10.7 $41.1 $50.2 $7mn-$14mn $34.2 $50.3 $53.8 Net Margin* 0.0% 0.0% 3.2% 1.5% 5.2% 6.1% 4.4% 6.1% 6.5% EPS* Fully diluted shares Sep-15 3Q15 is guided to be weaker-than-expected due to mobile and consumer weakness and sluggish order activity at the broad-based customers Amkor guided 3Q15 sales of -5% to +2% QoQ to US$ mn, below CS/street estimates for +6%/+11% QoQ, mainly due to pullbacks from mobile and consumer, and a bit of softness in the broad-based business. The company sees customers continuing to deplete inventory and staying cautious to replenish orders with supply chain capacity not as tight. While communications and consumer are expected to be sequentially down, automotive, networking and computing should see small growth. We now estimate 3Q15 sales will be down 1.5% QoQ. On lower sales, weaker mix and weaker pricing environment, margins were also guided lower to 13-16%, below CS/street estimates of 21%, taking the net income range to -US$7 mn to +US$14 mn in the quarter. Exhibit 11: GMs lower in 2Q15/3Q15 on the weaker outlook US$K GM (% $900, % Dec-15 3Q15 sales guidance: -5% to +2% QoQ $750,000 $600,000 $450,000 $300,000 $150,000 -$150, % 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% Revenue GM% OpM% Source: Company data, Credit Suisse research 4Q15 may see moderate growth on Apple's ramp-up While 3Q15 is set for a pullback on weaker communications demand, the company still expects a moderate rebound in 4Q15 on the back of Apple's refresh we expect mid- to high-single-digit QoQ growth for a peak quarter in Amkor expects 4Q15 recovery from Apple's new platforms on 16/14nm along with good content packaging other chips into that device (RF, sensors, connectivity, baseband) and also seasonally higher sales from broader mainstream products. We trim our full-year sales growth estimate from flat to down 4% YoY. Following lower sales growth and profitability, the company targets to reduce opex by 5% YoY in 2015 to keep the cost structure in line with the lower sales. (AMKR.OQ) 5

6 1Q99 3Q99 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 1Q99 3Q99 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15E 28 July 2015 Exhibit 12: Industry revenues falling off in 2015 US$ mn YoY Growth $4, % $3,500 80% $3,000 60% $2,500 40% $2,000 20% $1,500 0% $1,000-20% $500-40% -60% Exhibit 13: Amkor market share still down slightly US$ mn Sales $4,000 $3,600 $3,200 $2,800 $2,400 $2,000 $1,600 $1,200 $800 $400 ASE % of industry 50% 45% 40% 35% 30% 25% 20% 15% 10% SiP SPIL Amkor Stats YoY Growth SiP SPIL Amkor Stats AMKR % of industry Amkor marketing technology capabilities to gain share as customers migrate to advanced packages As a strategy to differentiate its technology offerings, Amkor is now introducing a roadmap of advanced packaging that combines more advanced substrate variations of its substrate products (flip chip CSP and flip chip BGA), fan-out packaging and advanced wafer-level packaging. At the advanced wafer-level packaging, the company has introduced a silicon interposer solution (SLIM) that can work around using complicated through silicon vias and an improved fan-out packaging architecture (SWIFT). Exhibit 14: Amkor developing advanced packaging spanning fan-out, wafer-level and advanced substrate packages Amkor launching new fanout and wafer-level packaging solutions for 2017 volumes Source: Amkor Amkor is now marketing its newly developed SWIFT (Silicon Wafer Integrated Fan Out Tech) and SLIM (Silicon less integrated module) technologies. The company's fan-out and 2.5D solutions can combine multiple chips including processor, memory, base band and other ICs, enabling customers to build very thin and very small products: SLIM: Silicon interposer package. SLIM is a lower-cost solution that simplifies the process and allows for supply-chain flexibility. The output will also deliver a reduction in package thickness. It leverages Amkor's 2.5D wafer processing and assembly equipment and expertise. SWIFT: Advanced fan-out package. SWIFT is Amkor's advanced fan-out package that targets mobile and networking applications. SWIFT combines baseband, application processor, logic and memory to drive advanced die integration. (AMKR.OQ) 6

7 Exhibit 15: Amkor's advanced WLP positioning Exhibit 16: SLIM and SWIFT package definition Source: Company data Source: Company data Mobile under some pressure but diversifying into new applications To counteract the slowing smartphone and tablet growth rates, Amkor targets to keep its high share at the flagship models while diversifying into new growth drivers, including (1) expanding WL CSP in mobile (18% of sales), (2) growing China/Taiwan to 4-5% of sales, (3) expanding automotive (>10% of sales), and (5) growing its MEMs/sensor business (mid-single-digit contribution. 1. Another volume ramp-up for Apple, although some risk with TSMC InFO in We expect Amkor to maintain a good market share of the Apple processor business out of TSMC this year, a project that should still reach 3-5% of 2H15 sales. In 2016, however, we believe TSMC will vertically integrate the business using its internal InFO process as it is procuring equipment and has a large team working with this customer on this strategic project. In the long term, Amkor has presented a roadmap with SWIFT and SLIM to capture fan-out and 2.5D businesses, but most of these volumes it notes would start from US baseband high-end orders impacted by GS6; may recover when Snapdragon 820 ramps up on Samsung 14nm. We believe Amkor was the most exposed back-end supplier to Qualcomm's Snapdragon 810 licensing technology supplied by Shinko, and consequently faces more impact in 2Q15 from that shift to Samsung. We see potential for some rebound in 2016 as Qualcomm may recover some share into future high-end Samsung products with the Snapdragon 820 moving back to Samsung on 14nm in late Qualcomm still uses the external back-end suppliers, giving opportunity for Amkor to recover share later in the year. 3. Low-cost Asian smartphone customer expansion. Amkor grew greater China sales by about 75% in 1H15 to 3-4% of sales and targets to get to 4-5% of sales exiting We believe Amkor has penetrated into a notable AP/baseband smartphone IC supplier and in the longer term targets the largest China and Taiwan IC design house. Amkor's Apple business ramping up again in 2015 but may be lost to TSMC InFO in 2016 Qualcomm orders would rebound if Snapdragon 820 is designed back into highend Samsung phones (AMKR.OQ) 7

8 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Sep-14 Dec-14 Mar-15 Jun-15 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Sep-14 Dec-14 Mar-15 Jun July 2015 Exhibit 17: End-market sales (US$ mn) communications the largest End Market Segments $900 $800 $700 $600 $500 $400 $300 $200 $100 Exhibit 18: Revenue % by end-market communications > 50% End Market Segments Mix 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Communications Computing Consumer Networking Industrial/Auto Communications Computing Consumer Networking Industrial/Auto Source: Company data, Credit Suisse research Source: Company data, Credit Suisse research 4. Memory growth from Toshiba NAND and some Mobile DRAM. Memory is now 14% of sales and still growing at 20% YoY. The company targets to continue outgrowing the NAND market and also continuing to supply mobile DRAM packaging and test to a US customer. 5. Growth from automotive. Amkor's automotive business grew 25% YoY in 2014 to US$760 mn (US$410 mn J-Devices + US$350 mn Amkor), and the company targets growing that to US$1 bn in the next few years (about 20% of expected sales by 2017). 6. Fan-in WLP strength. Amkor has almost 100 customers using the fan-in waferlevel packaging, a growing area now at 25-30% of advanced packaging sales (10-15% of total), and providing a lift due to good returns as the business has low material content and high level of service requirement for the turn-key assembly, probe, and bumping businesses. Fan-in packaging is seeing growth from lower pin count small form-factor mobile devices, including RF, connectivity and power management. 7. Sensor and RF growing through SiP packaging. Amkor has also ramped up its fingerprint IC packaging and MEMs sensors for automotive and IoT, with sensors now about mid-single-digits contribution and is also now creating RF front-end modules for mobile products. The company highlighted this as a growth area, and we believe it presents an opportunity for the company to do more SiP advanced packaging with good margins. Amkor's SiP combines one or more ICs of different functionalities, which may include passive components and/or MEMS assembled into a single package. SiP may contain one or more IC chips, either wirebonded, flip chip, or both, plus other components that are traditionally found on the system motherboard. Amkor's business model for SiP is a contrast to ASE, which is also trying to do board-level SiP modules using its USI Shanghai contract manufacturing footprint that is additive to the top line with high materials content but at lower margins due to its high pass-through content. J-Devices acquisition provides incremental sales once consolidated in 2016 Amkor currently owns 66% of J-Devices, a Japanese back-end supplier that has consolidated several of the local back-end operations. Amkor disclosed in 2014 that J- Devices had reached US$923 mn sales, US$123 mn gross profit and US$50 mn net income. We believe that venture is now approaching US$1 bn run-rate for the fiscal year ending March Amkor plans to raise its stake to 80% and consolidate operations in 2016, with a small minority interest deduction. We estimate by 2016 J-Devices could contribute US$1 bn sales, 13% GMs, and 6% pretax margin and US.18 EPS. Fan-in and sensor packaging is growing J-Devices consolidation adds US$1 bn sales in 2016 once ownership reaches 80% (AMKR.OQ) 8

9 Exhibit 19: J-Devices financials adds close to US$1 bn sales at ~7% pretax margins J Devices Results F2011 F2012 F2013 F2014 F2015E F2016E Sales $576,421 $531,530 $825,135 $923,020 $969,171 $1,017,630 Gross Profit $82,729 $61,003 $83,778 $123,242 $125,992 $132,292 GM % 14.4% 11.5% 10.2% 13.4% 13.0% 13.0% Operating Expense $51,217 $29,596 $63,081 $54,604 $57,334 $60,201 Opex / Sales 8.9% 5.6% 7.6% 5.9% 5.9% 5.9% Pretax Income $31,512 $31,407 $20,697 $68,638 $68,658 $72,091 Pretax margin 5.5% 5.9% 2.5% 7.4% 7.1% 7.1% Tax $6,100 $11,041 $4,034 $18,889 $17,165 $18,023 Tax Rate 19.4% 35.2% 19.5% 27.5% 25.0% 25.0% Net income $25,412 $20,366 $16,663 $49,749 $51,494 $54,068 Amkor share 30.0% 30.0% 60.0% 65.7% 65.7% 80.0% Amkor earnings contribution $7,624 $6,110 $9,998 $32,685 $33,831 $43,255 Amkor Shares 248, , , , , ,321 EPS The impact of the consolidation is for an expansion of sales by about US$1 bn. J-Devices does have GMs more similar to the 13% GM of Amkor's wirebond business as it mostly focuses on traditional automotive and industrial products with lower pin count and using a mature packaging technology. The business should be a positive cash cow operation, although with still moderately positive operating margins and some areas to cross-sell customer bases and improve efficiencies. With Amkor already having some equity income in J-Devices and now at 66% ownership, the profit impact should be pretty modest, although sales and market share (+3% back-end industry share) will see a boost with the incremental US$1 bn revenue. Exhibit 20: J-Devices consolidation in 2016 adds sales but a limited impact on net profit Amkor sales F2013 F2014 F2015E F2016E '16 ex J-Devices YoY Amkr Sales $2,956,450 $3,129,440 $2,981,736 $4,202,734 $3,185, % Gross Profit $554,513 $627,822 $501,658 $701,079 $568,787 GM % 18.8% 20.1% 16.8% 16.7% 17.9% 1.0% Operating Expense $404,228 $404,744 $407,145 $485,479 $425,278 Opex / Sales 13.7% 12.9% 13.7% 11.6% 13.4% Pretax Income $138,666 $223,078 $94,513 $215,600 $143, % Pretax margin 4.7% 7.1% 3.2% 5.1% 4.5% 1.3% Tax $22,646 $43,980 $27,967 $64,680 $46,657 Tax Rate 16.3% 19.7% 29.6% 30.0% 32.5% Equity in J-Devices $5,637 $31,654 $19,804 -$54,068 Minority interest -$2,361 -$3,501 -$3,139 -$19,370 -$19,371 Net income $119,296 $207,251 $83,212 $131,550 $96, % Shares 226, , , , ,321 EPS % Reducing equipment capex in 2015 Amkor cut its 2015 total capex guidance from US$650 mn to US$550 mn, with its core capex being down from US$450 mn to US$400 mn down 38% YoY from US$650 mn in The US$550 mn total capex already includes a fixed amount of US$150 mn investment for its Korea K5 factory that remains unchanged. The company noted that most of the reductions will be from expansion capex, with flexibility for a further US$40 mn cut, if demand further disappoints into 4Q15. Majority of the reduction will be from advanced packaging due to a slowdown in mobile, but it will also trim budget from mainstream Amkor is cutting its equipment capex from US$450 mn to US$400 mn. US$150 mn for K5 unchanged (AMKR.OQ) 9

10 E 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15E 28 July 2015 applications. The equipment mix is still allocated about 25-30% to test, 55% for facilities and 20% for other building/packaging, roughly unchanged from the 2014 spending mix. The K5 shell and spending for two clean room modules would be US$350 mn US$150 mn in 2015 and another US$200 mn next year. While K5 will provide tooling for 2.5D/3D, advanced flip chip, wafer bumping, test and R&D, we caution that the high investment and capacity expansion might not warrant good loading in an environment of sluggish demand. Amkor's Shanghai fab is the second largest fab and has the most advanced technologies, including wafer-level and multi-die packaging. Amkor will increase capex to expand its China factory to support local fabless companies Qualcomm and Toshiba's China business. Despite lower capex, depreciation will still come in around the same level at US$115 mn quarterly run rate in COGs or US$125 mn per quarter in cash flow, translating into about US$500 mn in 2015, in line with its prior guidance. Due to the need to spend US$200 mn on the K5 facility build-out in 2016, FCF may remain slightly negative again in Exhibit 21: Back-end capex is coming down 21% excluding fab investments in 2015 Capex (US$mn) 2014 w/ fab '14 YoY (%) 2014 ex-fab '14 YoY (%) '14 Rev % 2015 w/ fab '15 YoY (%) 2015 ex-fab '15 YoY (%) ASE $1,055 58% $1,055 58% 43% $790-25% $800-24% SPIL $643 28% $453-10% 99% $431-33% $431-5% Amkor $681 20% $643 13% 51% $550-19% $400-38% STATS $535 5% $356-30% -4% $316-41% $316-11% Powertech $ % $ % 28% $283 0% $283 0% King Yuan $230 39% $230 39% 73% $150-35% $150-35% Total Top 6 $3,428 26% $3,021 11% 43% $2,520-26% $2,381-21% YoY (%) 26% 11% -26% -21% The broader back-end sector is turning more conservative on capital investments in 2015 to respond to the weaker demand. Capital spending is tracking down 26% YoY, including fab investments, and down 21% YoY excluding the building shells. Following Amkor's cuts, we also could see ASE and SPIL trim capex this week. Capex/sales for the top four suppliers is now at 17% in 2015, based on the revised guidance, down from the 21-24% levels of Exhibit 22: Back-end capital spending down in 2015 Sales & Capex (US$ mn) $15,000 $13,500 $12,000 $10,500 $9,000 $7,500 $6,000 $4,500 $3,000 $1,500 Capex/Sales (%) 40% 36% 32% 28% 24% 20% 16% 12% 8% 4% 0% Exhibit 23: Capex coming down as growth decelerates US$ mn Capex $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 Capex/Sales 40% 36% 32% 28% 24% 20% 16% 12% 8% 4% 0% Sales Capex Capex/Sales Amkor SPIL SiP Stats Capex/Sales 2Q15 backend bookings weaken more than expected Consistent with the lower capex, industry group SEMI reported that June backend equipment bookings were down 13% MoM to only US$185 mn, below last year which continued growing through June to US$298 mn, a peak that is 19% above this year's level. 2Q15 bookings only grew 12% QoQ to US$640 mn, off a low base, down 23% YoY and at the low end of the seasonal for US$600 mn-1.1 bn from 2010 to Bookings peaked much lower this year as slowing backend capex is a prelude to companies projecting a muted outlook for results this week. The last weak year was 2013, with inventory dollar only at US$583 mn but had a strong snapback of +69% QoQ. Book-to-bill also weakened, with back-end falling from 1.03 to (AMKR.OQ) 10

11 Jan-01 Aug-01 Mar-02 Oct-02 May-03 Dec-03 Jul-04 Feb-05 Sep-05 Apr-06 Nov-06 Jun-07 Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 Apr-13 Nov-13 Jan-15 Aug July 2015 Exhibit 24: Backend bookings sluggish down 13% MoM in June Current Month Jun-15 May-15 MoM Current bookings $185 $ % Exhibit 25: Amkor stock troughs after bookings peak Stock Price Equipment Bookings (US$ mn) Bookings vs. Hi/Lo/Avg Current Hi/Lo/Avg +/- Bookings vs. last trough $185 $ % Bookings vs. last peak $185 $ % Bookings vs. post crisis avg $185 $ % BE Bookings AMKR Stock Source: SEMI, Credit Suisse estimates Semi stocks reacting to weak earnings Figure 26: Companies reporting to date guided C3Q15 below expectations Source: SEMI, Credit Suisse estimates US$ mn 2Q15 Sales Results 3Q15 sales Guidance US$ mn Inventory US$ (mn) Inventory Days Company 2Q Actual 2Q Guide 2Q Street QoQ (%) Beat (%) 3Q Midpt 3Q Old Street QoQ (%) Beat vs. Cons (%) Company 1Q15 2Q15 QoQ (%) 1Q15 2Q15 2Q15 QoQ 2Q14 YoY Altera % 1% NA 441 NA NA Altera % AMD % -1% 1,000 1,053 6% -5% AMD % Mellanox % 3% % 3% Mellanox % Xilinx % -1% % -9% Xilinx % QCOM (QCT) 3,853 4,187 3,963-13% -3% 3,082 4,317-20% -29% QCOM (QCT) 1,861 1,583-15% Fabless 5,921 6,308 6,038-10% -1.9% 4,777 6,551-19% -27.1% Fabless 2,987 2,845-5% QoQ (%) -10.5% -4.6% -8.7% -19.3% 10.6% QoQ Chg. (%) -4.8% Texas Inst. 3,232 3,250 3,258 3% -1% 3,280 3,466 1% -5% Texas Inst. 1,844 1,885 2% Cypress % 1% % 0% Cypress % Freescale 1,198 1,180 1,184 2% 1% 1,135 1,124-5% 1% Freescale % STM 1,760 1,765 1,766 3% 0% 1,804 1,805 2% 0% STM 1,193 1,242 4% Fabless + IDM 12,602 12,991 12,733-2% -1.0% 11,501 13,453-9% -14.5% Fabless + IDM 7,162 7,012-2% QoQ (%) -1.9% 1.1% -0.9% -8.7% 6.7% QoQ Chg. (%) -2.1% SanDisk 1,237 1,188 1,196-7% 3% 1,400 1,408 13% -1% SanDisk % Fairchild % -4% % -5% Fairchild % Maxim % -1% % -6% Maxim % Linear Tech % -2% % -13% Linear Tech % Semis (ex INTC) 15,157 15,523 15,277-2% -0.8% 14,174 16,241-6% -12.7% Semis (ex INTC) 8,541 8, % QoQ (%) -2.1% 0.3% -1.3% -6.5% 7.2% QoQ Chg. (%) -0.8% Intel 13,195 13,200 13,043 3% 1% 14,300 14,084 8% 2% Intel 4,418 4,818 9% Total Semis 28,352 28,723 28,320 0% 0% 28,474 30,325 0% -6.1% Total Semis 12,959 13,288 3% QoQ (%) 0.3% 1.6% 0.2% 0.4% 7.0% QoQ Chg. (%) 2.5% Source: Company data, Credit Suisse research, Bloomberg consensus The semiconductor stocks overseas are being impacted by lower September guidance for a number of broad-based chip companies reporting in the past week, including MXIM, Freescale, Linear, Qualcomm, AMD, Xilinx, and Fairchild. We previewed caution into the results season and expect weak guidance moving through results this week. Fabless + IDMs reporting to date are guiding 3Q15 at -9% QoQ sales, significantly below expectations for +7% QoQ. Semis ex-intc are guiding -7% QoQ, below the street's +7% QoQ. Notably, QCOM guided the chip division -20% QoQ, Xilinx -4% QoQ, Freescale -5%, MXIM -3%, and Linear tech -10% QoQ. On inventory, chip companies reporting to date still have +2 days QoQ and +16 days YoY. On a yearly basis, inventory level is elevated, echoing our view for an extended inventory correction through the year end to keep 2H15 growth moderate. (AMKR.OQ) 11

12 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Sep-14 Dec-14 Mar-15 Jun-15 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Sep-14 Dec-14 Mar-15 Jun-15 Inventory ( in $ mn) Inventory Days Receivable ( in $ mn) Days Sales Outstanding 28 July 2015 Balance sheet leveraged although debt refinancing lessens the interest burden Exhibit 27: Amkor balance sheet relatively unchanged in June US$ mn, unless otherwise stated Balance Sheet Mar-15 Jun-15 Q/Q % Summary Actual Actual Change Cash & Equivalents $494.2 $ % Total Debt $1,525.7 $1, % Net Cash -$1, $1, % Net Cash/Share -$4.32 -$ % A/R $433.1 $ % DSO % Inventory $227.6 $ % Inventory Days % SH Equity (BV) $1,145.0 $1, % Book Value / Share $4.82 $ % TBV / Share $4.82 $ % Amkor's balance sheet was slightly improved but still leveraged in 2Q15, with net debt increasing from US$1,032 mn to US$1,048 mn and from -US$4.3 per share to -US$4.4 per share. Working capital increased for both receivables and inventory and had stable book value at around US$4.93/share. The stock after hours was to 0.8x P/B, a discount to its Taiwan peers at 1.3x P/B although ROE is also lower at 7% vs 13% for the Taiwan back-end. The company still carries US$1.5 bn of debt on its balance sheet but is working to reduce its interest burden by extinguishing the high-rate debt in 2Q15 at a discount to par value the company expects to save US$17 mn in annual interest expense and have a US$18-19 mn quarterly run rate post the redemption. Amkor's balance sheet remains leveraged Exhibit 28: Inventory days down QoQ in 2Q15 Exhibit 29: Receivable days up in 2Q15 Inventory Inventory Days Receivables Days Sales Outstanding $ $ $ $ $ $400 $ $ $ $ $ Cutting estimates to reflect the weaker outlook The Asian semi suppliers are seeing more muted growth in 2H15 due to the higher fabless inventory and slowdown in smartphones and consumer tech (PCs/tablets/TVs), with each end-market slightly below expectations YTD. On the softer 2H15 outlook, we trim 2015/16E EPS from US.62/0.70 to US.35/0.55. Reducing 2016E sales to -4.7% YoY from flat YoY (AMKR.OQ) 12

13 Sep-05 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 May-12 Oct-12 Mar-13 Aug-13 Jan-14 Nov-14 Apr-15 Sep-15 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep July 2015 Exhibit 30: Revising down 2015 and 2016 estimates AMKR Actual CS CS Old Cons CS CS Old Cons Total Revenue $3,129.4 $2,981.7 $3,118.7 $4,042.0 $4,202.7 $4,439.4 $4,006.5 % Q/Q chng F2014 F2015E F2016E % Y/Y chng 5.9% -4.7% -0.3% 29.8% 40.9% 42.3% -0.9% Total GM* 20.1% 16.8% 19.0% 19.5% 16.7% 17.5% 21.3% R&D Expense* $76.9 $79.4 $73.0 $106.2 $97.2 SG&A Expense* $254.5 $235.9 $254.9 $307.3 $334.6 Operating Exp.* $331.4 $315.2 $327.9 $413.5 $431.8 Operating Mgin* 9.5% 6.3% 8.5% 8.8% 6.8% 7.8% 10.2% Net Income* $207.3 $83.2 $147.0 $189.0 $131.5 $167.0 $225.3 Net Margin* 6.6% 2.8% 4.7% 4.7% 3.1% 3.8% 5.6% EPS* Fully diluted shares , Bloomberg consensus Valuation approaching support levels After the recent correction on the weak consumer tech outlook and another 9% pullback after hours, Amkor's valuation is reasonable with the stock trading at the low end of its long-term range. Amkor is now trading at 3.3x/2.6x 2015/16E EV/EBITDA, vs the postcrisis range of 2.5x-5.0x and EV/sales of 0.8x/0.6x for 2015/16 versus its post-crisis range of 0.5x-1.2x. Amkor is also at a discount to peers averaging 4.1x EV/EBITDA and 1.2x EV/sales. Exhibit 31: AMKR EV/EBITDA now at lower levels EV/EBITDA Exhibit 32: AMKR EV/Sales at lower levels EV/Sales multiple EV/EBITDA EV/Sales Amkor is also at a discount on P/B, trading at 0.8x/0.7x 2015/16E P/B, the bottom of its post-crisis range and below the group average of 1.3x P/B. While Amkor's ROE used to be at par with its competitors, it is now at 7%, below the average of 13% although Amkor is the first to report 2Q15 results and guide for 2H15, and we anticipate some weakness across other backend companies as well taking down the group average ROE. Exhibit 33: Amkor valuation reasonable vs peers Price Mkt Cap EV/Sales (x) EV/EBITDA (x) P/E Multiple (x) P/B Multiple (x) ROE Company Ticker 7/28/2015 (US$mn) Select backend peers Amkor AMKR $4.25 $1, ASE 2311.TW $35.75 $8, SPIL 2325.TW $37.25 $3, Chipbond 6147.TWO $42.20 $ ChipMOS 8150.TW $32.20 $ Powertech 6239.TW $52.90 $1, Median Mean (AMKR.OQ) 13

14 Exhibit 34: Amkor P/B now at a trough at only 0.8x US$ AMKR historical PB band x 2.0x Exhibit 35: Amkor P/B down slated for a rebound US$ AMKR historical PB-ROE chart % 28% 21% 5 1.2x 0.8x % 7% 0 Apr/09 Oct/09 Apr/10 Oct/10 Apr/11 Oct/11 Apr/12 Oct/12 Apr/13 Oct/13 Apr/14 Oct/14 Apr/15 0 Oct/16 Jul/16 Apr/16 Jan/16 Oct/15 Jul/15 Apr/15 Jan/15 Oct/14 Jul/14 Apr/14 Jan/14 Oct/13 Jul/13 Apr/13 Jan/13 Oct/12 Jul/12 Apr/12 Jan/12 Oct/11 Jul/11 Apr/11 Jan/11 0% Amkor is still trading at a discount to its peers due to a more leveraged balance sheet and lower operating margins. The company's current balance sheet has high debt/equity at 127% vs SPIL's only 39% and ASE 63%. Exhibit 36: 2Q15 back-end balance sheet comparison Compares ASE SPIL Amkor Stats (NT$mn/US$mn) Cash and investments 57,399 37, Total debt 93,656 29,061 1,491 1,169 Net cash -36,257 8,729-1, Net cash/share (NT$) Accounts receivable 43,009 17, Days sales outstanding Inventory 47,605 4, Inventory days Accounts payable days Cash conversion days Debt / Equity 63% 39% 127% 124% Shareholders' equity 148,329 75,035 1, Exhibit 37: Back-end valuation comparison Compares ASE SPIL Amkor Stats 2015E BVPS P/B Ratio E EPS P/E Ratio n.m. 2015E EBITDA 1, EV/EBITDA E Sales 5,325 2,860 2,760 1,487 EV/Sales Enterprise Value 10,072 3,383 2,216 1,461 Market cap 8,857 3,676 1, Sharecount 7,868 3, ,202 Stock price: $35.75 $37.25 $ US$ conversion: $29.83 $29.83 $1.00 $1.35 (AMKR.OQ) 14

15 Exhibit 38: Amkor income statement summary (3-months ending) Mar-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 1QA 2QA 3QA 4QA 1QA 2QA 3QE 4QE F2012 F2013 F2014 F2015E F2016E Total Sales $696,044 $767,459 $812,824 $853,113 $742,875 $736,722 $725,671 $776,468 $2,759,846 $2,956,450 $3,129,440 $2,981,736 $4,202,734 QoQ / YoY change -7.8% 10.3% 5.9% 5.0% -12.9% -0.8% -1.5% 7.0% -0.6% 7.1% 5.9% -4.7% 40.9% Total COGS $567,224 $616,745 $659,607 $658,042 $607,928 $621,624 $617,062 $633,464 $2,287,975 $2,401,937 $2,501,618 $2,480,078 $3,501,655 Gross Profit $128,820 $150,714 $153,217 $195,071 $134,947 $115,098 $108,609 $143,004 $471,871 $554,513 $627,822 $501,658 $701,079 % GM 18.5% 19.6% 18.8% 22.9% 18.2% 15.6% 15.0% 18.4% 17.1% 18.8% 20.1% 16.8% 16.7% incr GM 36.3% 30.7% 5.5% 103.9% 54.5% 322.6% 58.7% 67.7% SG&A $62,424 $67,674 $61,600 $62,800 $62,942 $56,435 $57,959 $58,538 $217,000 $247,779 $254,498 $235,874 $307,256 % Sales 9.0% 8.8% 7.6% 7.4% 8.5% 7.7% 8.0% 7.5% 7.9% 8.4% 8.1% 7.9% 7.3% R&D $21,045 $22,079 $16,437 $17,303 $18,026 $20,020 $20,561 $20,766 $54,118 $64,625 $76,864 $79,373 $106,222 % Sales 3.0% 2.9% 2.0% 2.0% 2.4% 2.7% 2.8% 2.7% 2.0% 2.2% 2.5% 2.7% 2.5% Opex $83,469 $89,753 $78,037 $80,103 $80,968 $76,455 $78,519 $79,304 $271,118 $312,404 $331,362 $315,247 $413,479 Amort of GW Op Income $45,351 $60,961 $75,180 $114,968 $53,979 $38,643 $30,089 $63,700 $200,753 $242,109 $296,460 $186,411 $287,600 OpM % 6.5% 7.9% 9.2% 13.5% 7.3% 5.2% 4.1% 8.2% 7.3% 8.2% 9.5% 6.3% 6.8% Interest Expense -$24,964 -$23,779 -$25,023 -$24,159 -$25,019 -$24,087 -$18,500 -$18,500 -$96,198 -$102,745 -$97,925 -$86,106 -$74,000 FX gain/loss -$2,670 $1,841 Other Income -$36 $5,699 $9,626 $9,254 $498 -$7,290 $500 $500 $5,800 $9,080 $24,543 -$5,792 $2,000 Interest, Net -$25,000 -$18,080 -$15,397 -$14,905 -$24,521 -$31,377 -$18,000 -$18,000 -$93,068 -$91,824 -$73,382 -$91,898 -$72,000 One-Time Charge -$11,619 Pretax Income $20,351 $42,881 $59,783 $100,063 $29,458 $7,266 $12,089 $45,700 $107,685 $138,666 $223,078 $94,513 $215,600 % Sales 2.9% 5.6% 7.4% 11.7% 4.0% 1.0% 1.7% 5.9% 3.9% 4.7% 7.1% 3.2% 5.1% Tax $4,929 $12,511 $14,985 $11,555 $5,999 $4,631 $3,627 $13,710 $19,001 $22,646 $43,980 $27,967 $64,680 % Tax Rate 24.2% 29.2% 25.1% 11.5% 20.4% 63.7% 30.0% 30.0% 17.6% 16.3% 19.7% 29.6% 30.0% Equity in J-Devices JV $5,761 $20,036 $3,372 $2,485 $6,238 $7,566 $3,000 $3,000 $5,637 $31,654 $19,804 Minority Interest -$550 -$885 -$1,073 -$993 -$916 -$623 -$800 -$800 $1,169 -$2,361 -$3,501 -$3,139 -$19,370 Net Income $20,633 $49,521 $47,097 $90,000 $28,781 $9,578 $10,663 $34,190 $89,853 $119,296 $207,251 $83,212 $131,550 % Sales 3.0% 6.5% 5.8% 10.5% 3.9% 1.3% 1.5% 4.4% 3.3% 4.0% 6.6% 2.8% 3.1% EPS EPS (excl. option exp) Primary Shares EPS fully taxed (25%) Primary Shares 216, , , , , , , , , , , , ,840 Fully Diluted Shares 235, , , , , , , , , , , , ,321 EBIT $45,351 $60,961 $75,180 $114,968 $53,979 $38,643 $30,089 $63,700 $200,753 $242,109 $296,460 $186,411 $287,600 EBIT Margin % 3.0% 2.9% 2.0% 2.0% 2.4% 2.7% 2.8% 2.7% 7.3% 8.2% 9.5% 6.3% 6.8% EBITDA $153,689 $173,012 $194,880 $239,585 $178,366 $162,972 $156,418 $190,029 $571,232 $652,455 $761,166 $687,785 $886,916 EBITDA Margin % 22.1% 22.5% 24.0% 28.1% 24.0% 22.1% 21.6% 24.5% 20.7% 22.1% 24.3% 23.1% 21.1% Capex -$95,999 -$134,393 -$211,916 -$238,812 -$106,149 -$88,211 -$126,992 -$228,648 -$533,425 -$566,256 -$681,120 -$550,000 -$600,000 Depreciation $108,338 $112,051 $119,700 $124,617 $124,387 $124,329 $126,329 $126,329 $370,479 $410,346 $464,706 $501,374 $599,316 FCF (OCF-Capex) $36,407 -$14,491 -$72,549 -$29,936 $59,839 -$27,717 $16,131 -$96,762 -$130,971 -$82,958 -$80,569 -$48,508 -$193,441 FCF/Share (AMKR.OQ) 15

16 Exhibit 39: Amkor balance sheet (3-months ending) Mar-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 1QA 2QA 3QA 4QA 1QA 2QA 3QE 4QE F2012 F2013 F2014 F2015E F2016E Assets Cash $628.6 $525.9 $485.6 $449.9 $494.2 $442.3 $458.4 $361.7 $454.4 $610.4 $449.9 $361.7 $330.4 Restricted Cash $2.7 $2.7 $2.7 $2.7 $2.7 $2.7 $2.7 $2.7.0 $2.7 $2.7 $2.7 $2.7 Receivables, net $406.8 $455.8 $483.3 $469.7 $433.1 $438.5 $431.9 $462.2 $390.0 $385.5 $469.7 $462.2 $650.4 Inventory $197.3 $205.7 $229.6 $223.4 $227.6 $220.0 $218.4 $224.2 $227.4 $200.4 $223.4 $224.2 $318.9 Quick Assets $1,035.4 $981.8 $968.9 $919.6 $927.3 $880.8 $890.3 $823.8 $844.4 $996.0 $919.6 $823.8 $980.8 Other Current Assets $45.4 $57.8 $69.2 $52.3 $48.4 $48.9 $48.9 $48.9 $56.5 $33.3 $52.3 $48.9 $48.9 Current Assets $1,280.8 $1,247.9 $1,270.4 $1,197.9 $1,206.0 $1,152.4 $1,160.3 $1,099.6 $1,128.4 $1,232.4 $1,197.9 $1,099.6 $1,351.3 Fixed Assets $2,033.4 $2,153.8 $2,258.9 $2,206.5 $2,167.8 $2,229.0 $2,229.7 $2,332.0 $1,820.0 $2,006.6 $2,206.5 $2,332.0 $2,332.7 Investments $114.1 $134.7 $128.4 $117.7 $138.2 $140.4 $140.4 $ $105.2 $117.7 $140.4 $140.4 Total Other Assets $75.1 $72.9 $102.2 $113.2 $121.9 $122.4 $122.4 $122.4 $75.1 $83.1 $113.2 $122.4 $122.4 Due from Affiliates Goodwill Acquired Intangibles, Net $4.8 $ Restricted Cash $2.2 $2.2 $2.2 $2.1 $2.2 $2.3 $2.3 $2.3 $2.3 $2.2 $2.1 $2.3 $2.3 Deferred Taxes Other $72.9 $72.9 $100.0 $111.1 $119.8 $120.1 $120.1 $120.1 $68.1 $77.7 $111.1 $120.1 $120.1 Total Assets $3,503.3 $3,609.4 $3,759.9 $3,635.4 $3,633.9 $3,644.2 $3,652.8 $3,694.4 $3,023.5 $3,427.3 $3,635.4 $3,694.4 $3,946.9 Liabilities Accounts Payable $416.8 $555.8 $626.6 $436.6 $398.8 $280.7 $278.6 $286.0 $439.7 $365.3 $436.6 $286.0 $406.9 ST Borrowings $66.4 $10.0 $10.0 $5.0 $ $61.4 $ Tot Other Curr Liab $258.6 $252.0 $292.6 $259.0 $272.6 $436.7 $436.7 $436.7 $197.8 $264.3 $259.0 $436.7 $436.7 Current Liabilities $741.7 $817.9 $929.2 $700.6 $701.4 $717.4 $715.3 $722.7 $637.5 $690.9 $700.6 $722.7 $843.6 Long-Term Debt $1,586.3 $1,451.1 $1,526.0 $1,525.8 $1,495.7 $1,490.5 $1,490.5 $1,490.5 $1,545.0 $1,591.4 $1,525.8 $1,490.5 $1,490.5 Pension obligatoins $168.0 $159.9 $158.8 $152.7 $153.0 $158.0 $158.0 $158.0 $139.4 $165.1 $152.7 $158.0 $158.0 Other non-current liabilites $16.0 $14.4 $14.9 $125.4 $120.2 $109.1 $109.1 $109.1 $21.4 $15.0 $125.4 $109.1 $109.1 Minority Interest $ $16.2 $16.2 $ $14.7 $16.2 $16.2 Shareholders' Equity $979.6 $1,091.1 $1,117.4 $1,116.2 $1,145.0 $1,169.2 $1,179.9 $1,214.0 $687.0 $953.7 $1,116.2 $1,214.0 $1,345.6 Total Liabilities and SE $3,503.3 $3,609.4 $3,759.9 $3,635.4 $3,633.9 $3,644.2 $3,652.8 $3,694.4 $3,023.5 $3,427.3 $3,635.4 $3,694.4 $3,946.9 check ok ok ok ok ok ok ok ok Sales & Income Total Revenues $696.0 $767.5 $812.8 $853.1 $742.9 $736.7 $725.7 $776.5 $2,759.8 $2,956.5 $3,129.4 $2,981.7 $4,202.7 Cost of Goods Sold $567.2 $616.7 $659.6 $658.0 $607.9 $621.6 $617.1 $633.5 $2,288.0 $2,401.9 $2,501.6 $2,480.1 $3,501.7 Operating Income $45.4 $61.0 $75.2 $115.0 $54.0 $38.6 $30.1 $63.7 $200.8 $242.1 $296.5 $186.4 $287.6 NOPAT $40.4 $48.5 $60.2 $103.4 $48.0 $34.0 $26.5 $50.0 $181.8 $219.5 $252.5 $158.4 $222.9 Interest Expense $25.0 $23.8 $25.0 $24.2 $25.0 $24.1 $18.5 $18.5 $96.2 $102.7 $97.9 $86.1 $74.0 Depreciation Pretax Income $20.4 $42.9 $59.8 $100.1 $29.5 $7.3 $12.1 $45.7 $107.7 $138.7 $223.1 $94.5 $215.6 Net Income $20.6 $49.5 $47.1 $90.0 $28.8 $9.6 $10.7 $34.2 $89.9 $119.3 $207.3 $83.2 $131.5 Shares Out Cash Flow Delta W/C -$ $42.9 -$35.8 -$ $162.1 Capital Expenditures -$96.0 -$ $ $ $ $88.2 -$ $228.6 $350.0 $354.0 $354.0 $354.0 $354.0 Invested Capital $2,133.1 $2,265.6 $2,345.1 $2,484.9 $2,438.3 $2,484.5 $2,479.1 $2,610.0 $1,931.6 $2,125.9 $2,484.9 $2,610.0 $2,772.8 EBITDA $153.7 $173.0 $194.9 $239.6 $178.4 $163.0 $156.4 $190.0 $571.2 $652.5 $761.2 $687.8 $886.9 EBITDA/share $2.6 $2.9 $3.3 $4.0 $3.0 $2.7 $2.6 $3.2 $2.9 $2.9 $3.2 $2.9 $3.7 EBIT $153.7 $173.0 $194.9 $239.6 $178.4 $163.0 $156.4 $190.0 $571.2 $652.5 $761.2 $687.8 $886.9 Interest Expense $25.0 $23.8 $25.0 $24.2 $25.0 $24.1 $18.5 $18.5 $96.2 $102.7 $97.9 $86.1 $74.0 Tax Expense $4.9 $12.5 $15.0 $11.6 $6.0 $4.6 $3.6 $13.7 $19.0 $22.6 $44.0 $28.0 $64.7 Net Debt $1,024.0 $935.2 $1,050.4 $1,080.9 $1,031.5 $1,048.2 $1,032.1 $1,128.9 $1,090.6 $1,042.3 $1,080.9 $1,128.9 $1,160.1 Non Operating Assets $114.1 $134.7 $128.4 $117.7 $138.2 $140.4 $140.4 $140.4 $4.8 $108.4 $117.7 $140.4 $140.4 Liquidity Current Ratio Quick Ratio Cash/Current Liab Leverage Debt/Capital Times Int. Earned Management COGS/Inventory Sales/Receivables Sales/Fixed Assets Sales/Capital Receivable Days Out Invty Days-on-Hand Days Payable Profitability Return on Assets 2.4% 5.5% 5.0% 9.9% 3.2% 1.1% 1.2% 3.7% 3.0% 3.5% 5.7% 2.3% 3.3% Return on Net Assets 2.9% 6.4% 5.8% 11.3% 3.7% 1.2% 1.3% 4.1% 3.5% 4.2% 6.5% 2.5% 3.6% RONA Adj'd 1.8% 5.6% 5.0% 10.6% 2.9% 0.5% 0.6% 3.6% 3.3% 4.0% 6.3% 2.4% 3.5% Return on Capital 3.2% 7.8% 7.1% 13.6% 4.4% 1.4% 1.6% 5.1% 4.0% 4.7% 7.8% 3.1% 4.6% Return on Invested Capital 7.6% 8.6% 10.3% 16.6% 7.9% 5.5% 4.3% 7.7% 9.4% 10.3% 10.2% 6.1% 8.0% Return on Equity 8.4% 18.2% 16.9% 32.3% 10.1% 3.3% 3.6% 11.3% 13.1% 12.5% 18.6% 6.9% 9.8% Per-Share Data Book Value/Share $4.16 $4.61 $4.70 $4.71 $4.82 $4.93 $4.97 $5.12 $3.44 $4.22 $4.71 $5.11 $5.67 Tangible BV/Share $4.16 $4.61 $4.70 $4.71 $4.82 $4.93 $4.97 $5.12 $3.44 $4.22 $4.71 $5.11 $5.67 Cash Flow/Share Net Cash/Share ($4.33) ($3.93) ($4.40) ($4.54) ($4.32) ($4.40) ($4.33) ($4.74) Earnings/Share Net Cash -$1, $ $1, $1, $1, $1, $1,123.9 (AMKR.OQ) 16