AMKOR AND TOSHIBA FORM JOINT VENTURE ; FIRST MAJOR ASSEMBLY AND TEST FOUNDRY IN JAPAN|
28 August, 2000
Amkor Technology, Inc.
TOKYO and CHANDLER, ARIZ., Aug. 28, 2000 -- Amkor Technology (Nasdaq - AMKR) and Toshiba Corporation's Semiconductor Company today announced that the two companies have signed a non-binding memorandum of understanding to establish a joint venture assembly and test operation located at Iwate Toshiba Electronics Co., LTD, in Kitakami, Japan.
For Amkor, the joint venture affirms its positions as the worldwide leader in contract semiconductor assembly and test with a strategic entrance into the Japanese market. For Toshiba, the alliance with Amkor will provide reduced capital requirements to meet its diversifying packaging needs, advanced packaging technology and lower costs.
The joint venture will be formed from Iwate Toshiba's assembly and test operations, and will include manufacturing operations at two independent subcontract assembly houses. These subcontractors will operate with equipment and materials consigned to them by the joint venture. Amkor will hold 60 percent ownership of the joint venture and manage the joint venture operations, including its relationship with the independent subcontractors.
The Iwate Toshiba wafer fab will be the initial customer when the joint venture begins before the end of 2000. Sales to the joint venture are expected to be more than $300 million annually. The joint venture is set to operate for three years, after which it is anticipated that Amkor will buy-out Toshiba's interest for a predetermined amount.
Amkor will market the services of the joint venture to all semiconductor manufacturers who need local assembly and test in Japan. Until now, Japan's integrated device manufacturers (IDMs) have used relatively little outsourcing for the country's $7.5 billion annual assembly and test requirements, relying primarily on their own internal, domestic operations.
Through this joint venture, Amkor will be immediately positioned as the preeminent contract provider of assembly and test services in Japan.
"This is a landmark move for Amkor and for the contract packaging industry," said John Boruch, president and chief operating officer of Amkor. "We have been associated with Toshiba for many years, providing packaging and test services and working closely as a partner to develop leading-edge packages for Toshiba's semiconductor products."
Toshiba ranks second in Japan and third in the world in 1999 semiconductor revenues, according to a study released by IC Insights.
"This joint venture is a vote of confidence in Amkor as the world's foremost provider of contract packaging services from one of the world's leading and most demanding producers of semiconductors,"Boruch said. "And it provides Amkor with an excellent platform to expand all of our business relationships in Japan, both with domestic supply and our offshore operations."
"Toshiba Semiconductor Company has enhanced its competitiveness through an extensive restructuring program, " said Yasuo Morimoto, president and chief executive officer of Toshiba's Semiconductor Company. "This joint venture with Amkor allows us to accelerate our strategy of focusing on design, process and wafer fabrication. We also expect the joint venture to draw on Amkor's marketing strength to expand its business and to become one of the leading backend plants in the world. The program makes a positive and welcome contribution to reinforcing our overall position in the semiconductor business."
Amkor will augment the technology and manufacturing capability available at the joint venture operations to offer leading-edge packaging and test solutions in the Japanese market. Advanced ball grid array, chip scale, and flip chip packages along with "system in package" multi-chip modules will be prioritized to meet the needs of the rapidly growing and evolving Japanese mobile communications market and other sectors.
"In addition to the new technology and lower costs that this alliance with Amkor will bring to Toshiba, the growth afforded by sales outside Toshiba also will provide enhanced opportunities for the people who are now in the assembly and test operations of Iwate Toshiba," Morimoto said.
Upon establishment of the joint venture, Toshiba will contract certain of those employees now working in the Iwate assembly and test operations to the joint venture. At the end of the three-year joint venture period, the workforce will be offered employment with Amkor on equivalent terms, including various incentive compensation programs.
The ultimate formation and structure of the joint venture is still subject to the negotiation and execution of definitive agreements as well as any necessary corporate and regulatory approvals.
About Amkor Technology
Amkor Technology, Inc. is the world's largest provider of contract microelectronics manufacturing solutions. The company offers semiconductor companies and electronics OEMs a complete set of microelectronic design and manufacturing services, including deep sub-micron wafer fabrication; wafer probe, wafer mapping, characterization and reliability testing; IC packaging design and assembly; multi-chip module design and assembly; and final testing. More information on Amkor is available from the company's SEC filings and on Amkor's web site: http://www.amkor.com.
Toshiba Corporation is a leader in information and communications systems, electronic components, consumer products, and power systems. The company's integration of these wide-ranging capabilities assures its position as a leading company in semiconductor, LCD and other electronic devices. Toshiba has 191,000 employees worldwide and annual sales of over $50 (US) billion. Visit Toshiba's website at http://www.toshiba.co.jp
This news release may contain forward-looking statements that involve risk and uncertainty that could cause actual results to differ from anticipated results. Further information on risk factors that could affect the outcome of events set forth in these statements and that would affect the company's operating results and financial condition is detailed in the company's filing with the Securities and Exchange Commission, including the Report on Form 10-K for the fiscal year ended December 31, 1999.
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